US DOJ Announces Seizure of USD 3.36 Billion in Cryptocurrency
The United States Department of Justice has claimed a historic cryptocurrency seizure of USD 3.36 billion. The man who stole over 50,000 bitcoins from the Silk Road marketplace has pleaded guilty. According to the US Department of Justice, "the seizure was then the largest cryptocurrency seizure" in the history of the DOJ and "remains the department’s second-largest financial seizure ever."
Silk Road Marketplace Hacker Pleads Guilty
The US Department of Justice (DOJ) announced on Monday
that James Zhong pleaded guilty on Friday "to committing wire fraud in
September 2012 when he unlawfully obtained over 50,000 bitcoins from the Silk
Road dark web internet marketplace. The Justice Department announced a
"historic USD 3.36 billion cryptocurrency seizure" in connection to
the case.
The DOJ explained that law enforcement officers searched Zhong’s house in Gainesville, Georgia, on November 9, 2021, and
"seized approximately 50,676.17851897 bitcoin, then valued at over USD
3.36 billion." Elaborating:
"This seizure was then the largest cryptocurrency seizure
in the history of the US Department of Justice, and today it remains the
department’s second-largest financial seizure ever."
Zhong also had about 3,500 more bitcoins after exchanging into BTC over 50,000
bitcoin cash (BCH), which he received following the bitcoin blockchain
hard fork in August 2017. He used an overseas cryptocurrency exchange for the
conversion.
Besides the BTC seized at
his house, Zhong began "voluntarily surrendering to the government
additional bitcoin" beginning in March this year, the DOJ has revealed. "In total, Zhong voluntarily surrendered
1,004.14621836 additional bitcoin." The government is seeking the forfeiture of
"approximately 51,680.32473733 bitcoin," the DOJ noted.
Scheme to Defraud Silk Road Marketplace
James Zhong executed a scheme to defraud the Silk Road
marketplace of its money and property in September 2012, the DOJ said, adding
that he "was able to withdraw many times more bitcoin out of Silk Road
than he had deposited in the first instance." The Justice Department
detailed that on Sept. 19, 2012:
"Zhong deposited 500 bitcoins into a Silk Road wallet. Less
than five seconds after making the initial deposit, Zhong executed five
withdrawals of 500 bitcoin in rapid succession, resulting in a net gain of
2,000 bitcoin."
On Monday, the US government filed an Amended Preliminary Order
of Forfeiture in the United States v. Ross Ulbricht case, "seeking to
forfeit approximately 51,351.89785803 bitcoin traceable to Silk Road, valued at
approximately USD 3,388,817,011.90 at the time of seizure." Silk Road’s
founder, Ross Ulbricht, was convicted in 2015 and is currently serving a double
life sentence plus 40 years without parole.
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