Feds Seize $3.36B in Historic Crypto Bust Found Inside Georgia Home Hidden in Popcorn Tin
It is the Department of Justice’s second-largest financial seizure to date.
Federal authorities have seized $3.36 billion in a historic cryptocurrency bust in connection with the Silk Road Dark Web Fraud, the U.S. Attorneys Office of the Southern District of New York announced this week.
The Department of Justice announced Monday it seized about $3.36 billion in stolen bitcoin during a previously unannounced 2021 raid on the Georgia residence of James Zhong.
Zhong pleaded guilty Friday to one count of wire fraud, which carries a maximum sentence of 20 years in prison, the U.S Attorneys Office announced in a press release.
Zhong had unlawfully obtained 50,676 Bitcoin, then valued at over $3.36 billion, from the Silk Road dark web internet marketplace, authorities say.
Silk Road launched in 2011, but the FBI shut it down in 2013 and its founder, Ross William Ulbricht, is now serving a life sentence in prison since 2015 on an unrelated case, CNBC reported.
Authorities said they discovered the Bitcoin in Zhong’s Gainesville, Georgia, home during a search of his house in Nov. 9, 2021.
The Bitcoin was found in a circuit board hidden inside a popcorn tin, U.S. Attorney Damian Williams said in a press release.
“James Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from Silk Road. For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery,” Williams said. “Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds. This case shows that we won’t stop following the money, no matter how expertly hidden, even to a circuit board in the bottom of a popcorn tin.”
Authorities say Zhong was able to steal the funds from Silk Road by exploiting a flaw in the website's payment system, BBC reported.
In September 2012, he set up several accounts on Silk Road and deposited a small amount of Bitcoin into his digital wallets and then found a way to withdraw far larger amounts rapidly so as not to raise suspicion, BBC reported.
It is the Department of Justice’s second-largest financial seizure to date, following its seizure of $3.6 billion in allegedly stolen cryptocurrency linked to the 2016 hack of the crypto exchange Bitfinex, which the DOJ announced in February, CNBC reported.
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