The U.S. Department of Justice revealed on Monday that in 2021 it seized US$3.36 billion worth of stolen Bitcoin from Georgia real estate developer James Zhong.
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- Zhong was arrested in a 2021 raid at his Gainesville, Georgia home and pleaded guilty on Friday to one count of wire fraud for stealing roughly 50,000 in Bitcoin from the Silk Road marketplace.
- In September 2012, Zhong stole the Bitcoin by creating nine fraudulent accounts on the marketplace, each with 200 and 2,000 Bitcoin, according to the Department of Justice press release. He then reportedly tricked the marketplace’s withdrawal-processing system to obtain 50,000 Bitcoin by rapidly triggering 140 transactions.
- Silk Road was launched in 2011 as a dark web forum specializing in the trade of drugs and other illicit goods, as well as cryptocurrency. It was shut down by the FBI in 2013.
- Zhong described himself in his LinkedIn profile as a “large early Bitcoin investor with extensive knowledge of its inner workings” and that he is an experienced computer programmer.
- This marks the second-largest seizure of cryptocurrency, after the US$3.6 billion of stolen crypto linked to the 2016 Bitfinex hacking, according to CNBC.
- Zhong’s trial follows a sharp uptick in cryptocurrency hacks, with US$1.9 billion worth of crypto being stolen in service hackings for the year to July 2022, compared to US$1.2 billion for the same period of 2021, according to a Chainalysis report.
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