In a nutshell: On November 9, 2021, law enforcement seized 50,676.17851897 Bitcoins from the Gainesville, Georgia, dwelling of James Zhong. The haul modified into once valued at spherical $3.36 billion at time of the seizure (which sincere took scheme to be correct spherical Bitcoin’s all-time high). On the time, it modified into once the greatest cryptocurrency seizure in the history of the DOJ and remains the department’s 2d greatest financial seizure ever.
The US Department of Justice on Monday introduced a conviction in a case involving the seizure of $3.36 billion charge of Bitcoin.
According to authorities, Zhong unlawfully obtained the Bitcoins from used darkish web market Silk Toll road capacity inspire in 2012. He allegedly created nine Silk Toll road accounts (“fraud accounts”) designed to hide his identity then introduced about over 140 transactions in fast succession to trick the placement’s withdrawal-processing system into releasing the Bitcoins from its charge system into his accounts. Zhong then reportedly transferred the coins to assorted accounts in an effort to obfuscate the provision and conceal his identity.
The Justice Department distinguished Zhong did not checklist any merchandise or provider in the marketplace on Silk Toll road, nor did he eliminate any merchandise or provider. Instead, he would fund his fraud accounts with an initial deposit of between 200 and a pair of,000 Bitcoins then fleet finish a series of withdrawals. This allowed him to withdraw consistently more Bitcoins than he initially deposited.
In one transaction that took scheme on September 19, 2012, Zhong allegedly deposited 500 Bitcoins into a Silk Toll road wallet after which executed five withdrawals of 500 coins every – all within one 2d – which resulted in a regain gain of 2,000 Bitcoins. In one other cited example, Zhong made a single deposit and over 50 Bitcoin withdrawals.
During the November 9 seizure, authorities stumbled on Bitcoins in an underground ground safe and on a single-board computer hidden beneath blankets in a popcorn tin kept in a toilet closet at Zhong’s dwelling. Bigger than half a million in money modified into once also recovered in addition to diverse amounts of precious metals. Zhong later surrendered more than 1,000 extra Bitcoins to the authorities.
Zhong pled guilty to 1 count of wire fraud, which carries a most penalty of 20 years in penal complex. He’s scheduled to be sentenced on February 22, 2023.
Image credit: Ekaterina Bolovtsova, Alesia Kozik