DoJ seizes 50,676 Bitcoins from Silk Road Hacker James Zhong
After a decade of intense investigation, Silk Road hacker James Zhong has pleaded guilty to defrauding the then-famous darknet marketplace Silk Road. As a result, the United States federal government has obtained security keys belonging to 50,676 Bitcoins, currently worth approximately $999 million at prices of around $19,723. The announcement was a major breakthrough for US law enforcement, which has been studying block by block until the seizure.
United States Attorney Damian Williams said: “… This case shows that we will not stop following the money, no matter how skillfully it is hidden, even to a circuit board in the bottom of a popcorn box.”
Interestingly, Zhong was awarded an equal estimate of Bitcoin Cash after the August 2017 hard fork.
“ZHONG then exchanged through a foreign cryptocurrency exchange the entire BCH Crime Proceeds for additional Bitcoin, amounting to approximately 3,500 Bitcoin of additional crime proceeds,” the DoJ noted.
Take a closer look at Silk Road and the Bitcoin Market
Silk Road was the darkest website between 2011 and 2013. A sting operation that included international law enforcement agencies captured the site’s founder Ross Ulbricht, who was jailed in the United States for life in prison. However, the move has been contested by Ulbricht’s family and friends, who believe he was unfairly represented.
“Our entire family loves Ross and misses him terribly. Ross’s brutal, inflexible sentence has caused unimaginable suffering and grief to each and every one of us,” Gale LaCava, aunt, said in a mercy letter
Zhong and Ulbricht can now have a chat behind bars. ZHONG allegedly carried out a scheme to defraud Silk Road of the money and property by creating a series of approximately nine Silk Road accounts.
According to the DoJ, Zhong intended to hide his identity through sophisticated crypto transactions. Also, Tornado Cash, among other cryptocurrency mixers, existed freely in the United States.
While the announcement has been classified as one of the largest seizures by US law enforcement, the Bitcoin price has retreated over 5 percent today. Furthermore, there is newly created selling pressure since the United States government will soon auction its Bitcoin holdings.
In addition to the Bitcoin holdings, the US government has seized ZHONG’s 80 percent stake in RE&D Investments, LLC, a Memphis-based company with significant real estate holdings. Other items included precious metals such as gold and silver bars and
