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The person who stole over 50,000 bitcoins from the Silk Street market has pleaded responsible. In keeping with the U.S. Division of Justice, “the seizure was then the biggest cryptocurrency seizure” within the historical past of the DOJ and “stays the division’s second-largest monetary seizure ever.”
Silk Street Exploiter Pleads Responsible
The U.S. Division of Justice (DOJ) announced Monday that James Zhong pleaded responsible on Friday “to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 bitcoin from the Silk Street darkish internet web market.” The Justice Division additionally introduced a “historic $3.36 billion cryptocurrency seizure” in connection to the case.
The DOJ defined that regulation enforcement performed a search at Zhong’s home in Gainesville, Georgia, on Nov. 9, 2021, and “seized roughly 50,676.17851897 bitcoin, then valued at over $3.36 billion,” elaborating:
This seizure was then the biggest cryptocurrency seizure within the historical past of the U.S. Division of Justice and at present stays the division’s second-largest monetary seizure ever.
Zhong additionally had about 3,500 extra bitcoins from exchanging into BTC over 50,000 bitcoin money (BCH) which he obtained following the bitcoin blockchain laborious fork in August 2017. He used an abroad cryptocurrency trade for the conversion.
In addition to the BTC seized at his home, Zhong started “voluntarily surrendering to the federal government further bitcoin” starting in March this yr, the DOJ revealed, including that “In complete, Zhong voluntarily surrendered 1,004.14621836 further bitcoin.”
The federal government is looking for the forfeiture of “roughly 51,680.32473733 bitcoin,” the DOJ famous. On the time of writing, BTC is buying and selling at $20,641.28, so the quantity sought by the federal government is about $1.07 billion.
Zhong’s Scheme to Defraud Silk Street Market
Zhong executed a scheme to defraud the Silk Street market of its cash and property in September 2012, the DOJ mentioned, including that he “was capable of withdraw many instances extra bitcoin out of Silk Street than he had deposited within the first occasion.” For instance, the Justice Division detailed that on Sept. 19, 2012:
Zhong deposited 500 bitcoin right into a Silk Street pockets. Lower than 5 seconds after making the preliminary deposit, Zhong executed 5 withdrawals of 500 bitcoin in fast succession — i.e., inside the identical second — leading to a internet acquire of two,000 bitcoin.
On Monday, the U.S. authorities filed an Amended Preliminary Order of Forfeiture in the USA v. Ross Ulbricht case “looking for to forfeit roughly 51,351.89785803 bitcoin traceable to Silk Street, valued at roughly $3,388,817,011.90 on the time of seizure.” Silk Street’s founder, Ross Ulbricht, was convicted in 2015 and is at present serving a double life sentence, plus 40 years with out parole.
U.S. District Decide Paul Gardephe additionally entered a Consent Preliminary Order of Forfeiture on Friday for 154.4268793000044 BTC, $661,900 in money, 25 Casascius cash (bodily bitcoin) value about 174 BTC, varied metals, and Zhong’s 80% curiosity in Memphis-based RE&D Investments LLC. The metals seized consisted of “4 one-ounce silver-colored bars, three one-ounce gold-colored bars, 4 10-ounce silver-colored bars, and one gold-colored coin,” the Justice Division highlighted.
Following the DOJ’s announcement, some individuals on social media started noticing that certainly one of Zhong’s BTC addresses revealed in a court docket doc matches one posted by Bitcointalk person “Loaded.” Bitmex Analysis tweeted: “In March 2017, Bitcointalk person ‘Loaded’ signed a message from an deal with with 40,000 bitcoin, asking to do a 1 to 1 swap for ‘Bitcoin Limitless’ with Roger Ver. It now seems these funds have been seized by the U.S. authorities.”
Commenting on Loaded’s Bitcointalk put up, Bitcoin.com founder Ver, said: “As I recall, he by no means replied to my DMs about making the wager.”
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