As introduced by the U.S. Attorney’s workplace for the Southern District of New York, a defendant who pleaded responsible to wire fraud prices associated to “unlawfully obtained” Bitcoin (BTC) from the Silk Road market has been lastly been sentenced. The 32-year-old James Zhong stole greater than 50,000 BTC from the notorious drug-trafficking website again in 2012 when BTC was value round $12.
Second Highest Bitcoin Heist
According to reviews, Zhong was capable of conceal his theft for about ten years earlier than being apprehended. However, in November 2021, American officers raided Zhong’s residence in Georgia and seized all Bitcoin belongings, discovering the vast majority of the digital foreign money in a ground secure and a pc hidden inside a popcorn tin. At the time, the worth of the cryptocurrencies was round $3.4 billion, making it the second-largest monetary seizure in US historical past.
In the U.S. Attorney’s sentencing memo for Silk Road Bitcoin stealer James Zhong: investigators seized prison proceeds from “a single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet.” (Sentencing is at the moment at 3 pm). pic.twitter.com/7aamQryQ6B
— Rachel Scharf (@rscharf_) April 14, 2023
The prosecutors declare that Zhong spent practically $16 million of the revenues on investments in actual property, luxurious lodges, lavish pubs, nightclubs, and in proudly owning a fleet of Lamborghinis. Considering at the moment’s Bitcoin price, the confiscated asset is now estimated to be round $1.56 billion.
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Exploiting Silk Road’s Flaw
Zhong reportedly took benefit of an inherent flaw in Silk Road’s pockets function which finally led him to multiplying his Bitcoin stack. The U.S. Department of Justice notes that in a single occasion, Zhong transferred 500 bitcoins right into a pockets and inside 5 seconds made 5 fast withdrawals. By doing so, he exploited a weak spot in Silk Road’s system, which resulted in his preliminary funding turning into 2,500 Bitcoins.
Additionally, Zhong loved the hard fork break up that occurred in 2017 between Bitcoin and Bitcoin Cash (BCH), have been he acquired and equal quantity of 50K BCH as properly. Apart from the 50K Bitcoins, the regulation enforcement have been additionally capable of seize practically $662,000 in money, 25 Casascius cash and metallic cash which represented bodily Bitcoins however in actuality contained personal keys to achieve entry to the true digital foreign money.
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