The US Department of Justice has confiscated almost $1 billion worth of bitcoin (BTC) from a guy who illegally obtained over 50,000 bitcoins from the Silk Road bazaar on the dark web in 2012.
James Zhong pled guilty in court to wire fraud on November 4 and will be sentenced in February.
According to Damian Williams, US attorney for the southern district of New York, the location of the stolen 50,000 BTC remained unclear for more than a decade.
Zhong conducted a meticulous plan to steal bitcoin from the Silk Road Market, one of the earliest darknet sites. Silk Road functioned as a Tor hidden service, a privacy technology that enables anonymous web browsing.
Tyler Hatcher, an Internal Revenue Service (IRS) criminal investigator, stated that following the theft, Zhong attempted to conceal his loot via a series of sophisticated transactions.
However, this did not stop law enforcement from pursuing the bitcoin path. In November 2021, after getting a search order for Zhong’s apartment, investigators discovered the missing bitcoins in “an underground floor safe” and on a single-board computer in a bathroom cupboard. The computer was beneath blankets in a popcorn tin housed in a bathroom closet.
At the time of confiscation, the bitcoins were worth around $3.4 billion. Additionally, officials discovered roughly $662,000.
A New York couple was indicted in February for stealing around 120,000 BTC, most of which were recovered by law police.
In November 2020, another seizure tied to Silk Road netted the authorities 70,000 BTC.
The US government now has more bitcoins than Microstrategy, Block.one, and Mt. Gox cryptocurrency exchange.
The Treasury Executive Office for Asset Forfeiture is expected to oversee forfeited assets since it controls the Treasury Forfeiture Fund (TFF) – an account where non-tax forfeitures are placed.
Historically, confiscated assets have been sold at auction to multiple bidders. Notably, venture entrepreneur Tim Draper acquired 30,000 bitcoins for an unspecified value in 2014.
