The U.S. Department of Justice (DOJ) has seized 50,000 Bitcoin from the hacker who stole from the infamous dark web marketplace, Silk Road. It is the second-largest seizure ever in the government’s history.
On Nov. 7, the DOJ announced it had convicted hacker James Zhong for wire fraud he committed at Silk Road over a decade ago.
Zhong defrauded Silk Road – the now-defunct dark web marketplace that operated from 2011 to 2013. In September 2012, Zhong manipulated Silk Road’s withdrawal processing system into depositing 50,000 BTC to external wallets he controlled.
Federal authorities seized 50,676 Bitcoin from Zhong’s residence in Georgia last November. At the time, the value of the coins amounted to $3.36 billion and marked the “largest cryptocurrency seizure” in the DOJ’s history. Today, the value of the seized Bitcoin is worth around $1.04 billion.
DOJ said enforcement agencies uncovered the cryptocurrency from Zhong’s underground floor safe and a single-board computer “submerged under blankets in a popcorn tin stored in a bathroom closet.”
The DOJ also found that Zhong owned an extra 50,000 Bitcoin Cash (BCH) after Bitcoin’s hard fork in 2017. He later exchanged the entirety of his BCH holdings for 3,500 more BTC.
“This case shows that we won’t stop following the money, no matter how expertly hidden, even to a circuit board in the bottom of a popcorn tin,” said U.S. Attorney Damian Williams in a statement.
Zhong pleaded guilty to the charges on Nov. 4 before a District Judge in New York. The maximum sentence associated with his crime is 20 years in prison.
Silk Road founder Ross Ulbricht is serving his 10th year in prison under a double life sentence without parole for running the website.