A Georgia resident has been sentenced to one year in prison following a $3.4 billion Bitcoin heist, the US Attorney’s Office for the Southern District of New York announced April 14.
Zhong stole billions in BTC in 2012
Authorities said James Zhong first committed wire fraud against Silk Road in 2012.
Through that action, Zhong stole over 51,680 BTC from the darknet marketplace. That amount was worth $3.4 billion in 2012 and is worth $1.57 billion today.
Zhong initially created several Silk Road accounts and funded those accounts with a smaller amount of Bitcoin. He then quickly executed over 140 transactions to force the system to release Bitcoin in his accounts.
Zhong then transferred the stolen Bitcoin to various addresses to hide his ownership of the funds. He also used Bitcoin mixers to make tracking attempts difficult.
He did not use the Silk Road market to buy or sell items during the attack.
Later, Zhong benefited from the Bitcoin Cash hard fork in 2017, which provided him with additional funds. He exchanged all the Bitcoin Cash for Bitcoin.
Zhong hid earnings for more than 10 years
Zhong concealed his actions for more than a decade, and police did not recover most of the stolen Bitcoin until they raided Zhong’s residence in November 2021.
Zhong hid his winnings in a safe in the floor and in a single-board computer hidden under the blankets and in a can of Cheetos popcorn. Law enforcement officers also recovered various other items of value, including cash, precious metals, and physical bitcoins from Casascius.
Zhong began delivering undiscovered Bitcoin in March 2022.
The case is just one of many recent cryptocurrency-related actions by the Department of Justice. The agency has handled cases involving a variety of scams, another Silk Road case, a Bitfinex theft, and individuals linked to the OneCoin scam.
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