A Georgia resident has been sentenced to a year in prison after a $3.4 billion Bitcoin theft, the U.S. Attorney’s office in the Southern District of New York said on April 14.
Zhong stole billions in BTC in 2012
Authorities said James Zhong first committed wire fraud against Silk Road in 2012.
Through this action, Zhong stole over 51,680 BTC from the dark web marketplace. This amount was $3.4 billion in 2012 and is currently worth $1.57 billion.
Zhong initially created several Silk Road accounts and funded those accounts with a smaller amount of Bitcoin. He then quickly performed over 140 transactions to force the system to release bitcoin on his accounts.
Zhong then transferred the stolen bitcoins to multiple addresses to hide his ownership of the funds. He also used bitcoin mixers to prevent tracking attempts.
He did not use the Silk Road Marketplace to buy or sell items during the attack.
Zhong later benefited from the Bitcoin Cash hard fork in 2017, which provided him with additional funds. He exchanged all Bitcoin Cash for Bitcoin.
Zhong hidden proceeds for more than 10 years
Zhong has kept quiet about his actions for over a decade, and law enforcement only recovered most of the stolen bitcoins during a November 2021 search of Zhong’s home.
Zhong hid his proceeds in a floor safe and in a single-board computer hidden under blankets and in a Cheetos popcorn can. Law enforcement officers also seized various other valuables, including cash, precious metals, and physical bitcoins from Casascius.
Zhong began handing over undiscovered bitcoins in March 2022.
The case is just one of many recent cryptocurrency-related actions by the DOJ. The agency has handled cases related to various scams, another Silk Road case, a Bitfinex theft, and people linked to the OneCoin scam.
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