You are here
Home > News > U.S. Justice Department seizes USD 1 billion in stolen Silk Road Bitcoin

U.S. Justice Department seizes USD 1 billion in stolen Silk Road Bitcoin

The United States is seeking the forfeiture of more than USD 1 billion in Bitcoin stolen from the Silk Road online marketplace, federal prosecutors in Manhattan said on Monday.

In the second largest seizure in U.S. Department of Justice history, Internal Revenue Service (IRS) agents obtained 50,000 Bitcoin during a November 2021 search of the defendant James Zhong’s home in Gainesville, Georgia.

Zhong, 32, on Friday, pleaded guilty to wire fraud for tricking Silk Road’s processing system into releasing the funds to his accounts in 2012.

By the time it was seized, the Bitcoin was worth more than USD 3 billion. It has since lost about two-thirds of its value.

Some of the stolen Bitcoin was found on a computer in a popcorn tin stored in a bathroom closet, IRS special agent Trevor McAleenan said in an affidavit.

“For almost 10 years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over USD 3.3 billion mystery,” US Attorney Damian Williams in Manhattan said in a statement. “We won’t stop following the money … even to a circuit board in the bottom of a popcorn tin.”

The US government seized Silk Road in 2013, describing the underground website as a massive illegal drug and money-laundering marketplace.

Silk Road creator Ross Ulbricht was convicted in 2015 of seven counts of enabling illegal drug sales via bitcoin. He was sentenced to life in prison and lost an appeal in 2017.

Zhong could face 27 to 33 months in prison under recommended federal guidelines at his February 22, 2023 sentencing before U.S. District Judge Paul Gardephe, though prosecutors can seek a longer sentence.

The defendant also agreed to forfeit his stake in a real estate company, plus USD 661,900 and other items.

His lawyer Michael Bachner said Zhong has returned “virtually” all of the bitcoin.

“Mr Zhong is extremely remorseful for his conduct that occurred over 10 years ago when he was just 22,” Bachner said in a statement.


Warning: Invalid argument supplied for foreach() in /var/www/warsawpoint/data/www/warsawpoint.com/wp-content/themes/accesspress-mag/content-single.php on line 69

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Top