Real estate developer James Zhong pleaded guilty Nov. 4 to committing wire fraud after stealing Bitcoin, once worth $3.4 billion from the Silk Road marketplace, a decade ago, according to federal prosecutors in Manhattan.
They said Zhong Illegally obtained 50,000 Bitcoin from the Silk Road, a dark web internet marketplace in September 2012. Investigators discovered the Bitcoin after a raid on Zhong’s home in Georgia in November 2021, when Bitcoin was worth $60,000 (it is now about $21 000 worth).
“For nearly ten years, the whereabouts of this massive chunk of missing Bitcoin ballooned into a more than $3.3 billion mystery,” U.S. Attorney Damian Williams for the Southern District of New York said in a statement. “Thanks to state-of-the-art cryptocurrency detection and good old-fashioned police work, law enforcement has tracked down and recovered this impressive cache of crime proceeds.”
In the largest financial seizure in the history of the US Department of Justice, it seized $3.6 billion worth of stolen Bitcoin during a 2016 hack of crypto exchange Bitfinex.
In September 2012, Zhong created fake Silk Road accounts to hide his identity and hacked the platform to transfer Bitcoin to those accounts, according to the U.S. Attorney’s Office. Zhong then transferred the Bitcoin to accounts he controlled.
Silk Road was an online marketplace known for trading cryptocurrencies and drugs. Its founder Ross Ulbricht was sentenced to life in prison in 2015.
The Justice Department said it seized approximately 53,500 Bitcoin found in an underground floor vault, on a single-board computer stored under blankets in a popcorn tin in a bathroom cabinet, plus substantial real estate, cash and gold GC00,
and silver SI00,
Zhong pleaded guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. He did not immediately respond to a request for comment.