Georgia man pleads guilty to stealing bitcoin worth $3.4 billion

  • The Southern District of New York revealed on Monday that real estate developer James Zhong pleaded guilty to stealing over 50,000 bitcoin from the dark web marketplace Silk Road about a decade ago.
  • Zhong, who is now facing a 20-year prison sentence, reportedly used nine anonymous accounts to trigger quick transactions on Silk Road to deceive its withdrawal-processing system into transfering bitcoin into his accounts.
  • The Justice Department recovered devices storing the cryptocurrency from Zhong’s home in November when it was worth $68,000 per coin, totalling $3.4 billion.
  • The recovered crypto is purportedly the second largest that the government has seized following the $3.6 billion recovered in February from a couple who reportedly hacked the virtual currency exchange Bitfinex in 2016.
  • "For almost ten years, the whereabouts of this massive chunk of missing bitcoin had ballooned into an over $3.3 billion mystery," Damian Williams, the U.S. Attorney for the Southern District of New York, was quoted as saying.

A real estate developer has pleaded guilty to stealing over 50,000 bitcoin from the dark web marketplace Silk Road about a decade ago.

On Monday, the Southern District of New York revealed in a statement that the Justice Department recovered $3.4 billion worth of the cryptocurrency last year from the alleged perpetrator, identified as James Zhong. 

Court documents revealed that Zhong, 32, confessed on Friday to committing wire fraud in September 2012 after illegally obtaining the digital currency. At the time, a single bitcoin was worth approximately $13.50.

Federal agents found the bitcoin on devices concealed in an underground floor safe in Zhong’s residence in Gainesville, Georgia, during a raid in November last year when the cryptocurrency was worth $68,000 per coin. The digital money was reportedly stored on a single-board computer hidden inside a popcorn tin and tucked under blankets inside a bathroom closet.

The recovered crypto is purportedly the second largest that the government has seized following the $3.6 billion recovered in February from a couple who reportedly hacked the virtual currency exchange Bitfinex in 2016.

Damian Williams, the U.S. Attorney for the Southern District of New York, attributed the operation’s success to “state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement.”

“For almost ten years, the whereabouts of this massive chunk of missing bitcoin had ballooned into an over $3.3 billion mystery,” Williams was quoted as saying.

Zhong, who is now facing a 20-year prison sentence, reportedly used nine anonymous accounts to trigger quick transactions on Silk Road to deceive its withdrawal-processing system into transferring bitcoin into his accounts.

Speaking on Zhong’s behalf, lawyer Michael Bachner said Zhong is “extremely remorseful for his conduct that occurred over 10 years ago when he was just 22 years old.” 

“Given the increase in bitcoin value over the past decade, the value of the bitcoin he returned exponentially exceeded the value of the bitcoin he took,” Bachner said.

Featured Image via MichaelWuensch

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