Home » News » US Department of Justice confiscates bitcoins stolen 10 years ago worth $3.36B

US Department of Justice confiscates bitcoins stolen 10 years ago worth $3.36B

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US Department of Justice confiscates bitcoins stolen 10 years ago worth $3.36B-GadgetAny
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The U.S. Department of Justice announced on Monday that it had found over $3.36 billion worth of stolen bitcoin in a raid on James Zhong’s house in 2021 that had previously gone unreported, according to a report by CNBC.

Zhong, who was charged with stealing Bitcoin from different cryptocurrency exchanges, entered a guilty plea to one count of wire fraud on Friday. A conviction carries a potential sentence of 20 years in prison.

The seizure of 3.6 billion in allegedly stolen cryptocurrency linked to the 2016 hack of the cryptocurrency exchange Bitfinex, which the DOJ disclosed in February, is the DOJ’s greatest financial confiscation to date.

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Authorities assert that Zhong stole bitcoin from the Silk Road dark web market, where it was used to buy and sell illegal products like heroin.

The Federal Bureau of Investigation closed down Silk Road, which had been operating since 2011, in 2013. Its creator, Ross William Ulbricht, is presently serving a life sentence in prison.

U.S. Attorney Damian Williams claims that over the period of around ten years, the locations of this significant amount of lost Bitcoin have turned into a $3.3 billion puzzle. According to the Southern District of New York, Zhong used the market’s vulnerabilities to carry out the attack.

Bitcoin

Zhong stole bitcoin from Silk Road using a “sophisticated method,” according to Special Agent in Charge Tyler Hatcher of the Internal Revenue Service’s Criminal Investigation.

In September 2012, Zhong created nine fictitious accounts on Silk Road, funding each one with 200–2,000 bitcoin, according to the DOJ press release.

He instantly began over 140 transactions, tricking the marketplace’s withdrawal processing mechanism into releasing approximately 50,000 bitcoin into his accounts. Zhong then sent the bitcoin to a number of his wallet addresses.

Thanks to blockchain analysis and diligent police work, law enforcement, and blockchain analytics experts were able to recover more than 50,000 bitcoin from Zhong.

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Jozeph P

By Jozeph P

Journalism explorer, tech Enthusiast. Love to read and write.

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