Man jailed after being caught with $3.4 billion in stolen Bitcoin

• A man convicted of stealing around 50,000 Bitcoin was sentenced to one year in prison on Friday.
• When it was seized, the Bitcoin was worth over $3.4 billion.
• Prosecutors said the cryptocurrency was stolen from Silk Road’s dark web market.

A man who stored billions of dollars worth of stolen cryptocurrency in an underground safe — and a Cheetos popcorn box — was sentenced Friday to a year and a day in prison.

According to federal prosecutors, James Zhong (32) stole more than 50,000 Bitcoins from Silk Road, a marketplace on the so-called “dark web” where users can buy everything from pornography to illegal drugs. The founder, Ross Ulbricht, was sentenced in 2015 to life in prison without the possibility of parole after he was convicted of, among other things, drug trafficking, money laundering and hacking.

Zhong was able to steal from the market by creating multiple accounts and tricking Silk Road into releasing Bitcoin to his accounts; according to the Ministry of Justice. He never actually bought or sold anything on the site, according to a DOJ statement.

“Back in 2012, James Zhong committed wire fraud by stealing 50,000 Bitcoin from Silk Road, and for the next 10 years he managed to hide what he had done and how he obtained the wealth,” US Attorney Damian Williams said in the statement.

But in November 2021, US authorities obtained a search warrant to search his home in Gainesville, Georgia. There, investigators found more than 50,000 Bitcoins, distributed in “an underground safe and on a single desk computer that was submerged under blankets in a popcorn box stored in a bathroom cabinet.” Authorities also recovered more than $660,000 in cash, as well as silver and gold bullion, at Zhong’s home.

At the time the Bitcoin was seized, it was valued at $3.4 billion and today is still worth more than $1.5 billion, according to the DOJ.

A photo shared by the department shows that the crypto box originally contained Cheetos brand popcorn in both Flamin’ Hot and Cheddar flavors. According to media reports, the box and its promise of “2 favorites together” was available exclusively at Walmart during the 2020 holiday season.

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