US Government Seizes Bitcoin Worth $3.4 Billion From Silk Road Scammer

The US Department of Justice announced on Monday that law enforcement seized $3.36 billion worth of bitcoins from a man who had “obtained illegally“more than 50,000 bitcoins on the Silk Road darkweb market over a decade ago.

The U.S. Attorney for the Southern District of New York says James Zhong, of Gainesville, Georgia, pleaded guilty on Nov. 4 to committing wire fraud in September 2012. That charge carries a maximum sentence of 20 years from prison.

The plea came nearly a year after law enforcement seized 50,676.17851897 bitcoins, then valued at more than $3.36 billion, from James Zhong’s home, the statement said. Authorities found the bitcoins in an underground safe and on a single board computer hidden under blankets in a popcorn box placed in a bathroom closet.

Law enforcement also recovered $661,900 in cash, 25 Casascius coins of bitcoin (worth approximately 174 bitcoins), an additional 11,116 bitcoins, and a handful of silver and gold bars.

The whereabouts of this huge amount of bitcoins had been a mystery for nearly 10 years, US Attorney Damian Williams said in the statement.

It was the largest cryptocurrency seizure in the history of the United States Department of Justice at the time, and it remains the department’s second-largest financial seizure today, the statement said. .

Silk Road was an online black market that was launched in 2011 by the “Dread Pirate Roberts” then anonymous (later discovered as Ross Ulbricht). He was notoriously known for his money laundering activities and for buying and selling illegal drugs with bitcoins. Within two years, Silk Road was shut down by the US government, and in 2015 Ulbricht was unanimously found guilty by a jury and sentenced to life in prison.

This case shows we won’t stop following the money, no matter how cleverly hidden, even to a circuit board in the bottom of a popcorn box.“said Mr. Williams.

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