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U.S. lays claim to $1 billion in stolen Silk Road Bitcoin

Skylar Shaw

Nov 08, 2022 16:31

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Federal prosecutors in Manhattan said on Monday that the US is requesting the seizure of more than $1 billion in Bitcoin that was seized from the Silk Road internet bazaar.


Internal Revenue Service (IRS) officials found the 50,000 Bitcoin during a search of the defendant James Zhong's Gainesville, Georgia, residence in November 2021, making it the second-largest seizure in US Department of Justice history.


For fooling Silk Road's processing system into disbursing the payments to his accounts in 2012, Zhong, 32, pleaded guilty to wire fraud on Friday.


The Bitcoin was worth more than $3 billion when it was confiscated. Since then, it has lost around two thirds of its worth.


According to an affidavit signed by IRS special agent Trevor McAleenan, some of the stolen Bitcoin was discovered on a computer inside a popcorn container kept in a bathroom closet.


According to U.S. Attorney Damian Williams in Manhattan, "for almost ten years, the whereabouts of this large chunk of missing Bitcoin had inflated into an over $3.3 billion mystery." "We won't give up looking for the money... even to a circuit board in a popcorn tin's base.


In 2013, the U.S. government shut down Silk Road, citing it as a sizable marketplace for illegal drugs and money laundering.


Ross Ulbricht, the man of Silk Road, was found guilty on seven charges of facilitating the sale of illegal drugs using bitcoin in 2015. He was given a life sentence and lost his 2017 appeal.


At his sentencing on February 22, 2023 before U.S. District Judge Paul Gardephe, Zhong might receive a sentence of 27 to 33 months in prison, although the prosecution may ask for a longer term.


In addition, the defendant consented to give up $661,900 in addition to other assets and his share of a real estate business.


According to Michael Bachner, his attorney, Zhong has "nearly" returned every bitcoin.


In a statement, Bachner stated that Zhong was "very sorry" for his actions, which took place more than 10 years ago when he was only 22.

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