Over 50K BTC from Silk Highway value formally seized by DOJ after 10 12 months investigation

The U.S. Legal professional has introduced that the Division of Justice has formally seized Bitcoin valued at $3.36 billion on the time of appropriation in reference to the 2012 Silk Highway fraud. The seized Bitcoin is valued at $1.05 billion as of press time.

A press launch issued on Nov. 7 said that “Over 50,676 Bitcoin Hidden in Gadgets in Defendant JAMES ZHONG’s Dwelling” has been taken into custody following Zhong’s conviction at trial on Nov. 4. The Bitcoin seizure marks not simply the biggest crypto haul within the historical past of the U.S. Division of Justice however the DOJ’s most important monetary seizure ever.

The information comes alongside the revelation that Zhong pleaded responsible to fees of fraud on Nov. 4 “to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 Bitcoin from the Silk Highway darkish net web market.”

U.S. Legal professional Damian Williams mentioned:

“James Zhong dedicated wire fraud over a decade in the past when he stole roughly 50,000 Bitcoin from Silk Highway.  For nearly ten years, the whereabouts of this large chunk of lacking Bitcoin had ballooned into an over $3.3 billion thriller.  Due to state-of-the-art cryptocurrency tracing and good old school police work, legislation enforcement positioned and recovered this spectacular cache of crime proceeds.”

Williams confirmed that a number of the Bitcoin was hidden in a “circuit board within the backside of a popcorn tin,” in response to the discharge indicating that Zhong had hidden the crypto in such a way.

The U.S. Authorities sometimes sells off seized crypto in batches which means that over 50,000 BTC could hit the market within the coming weeks and months. It’s unknown whether or not the most recent cache of Bitcoin shall be auctioned off, however it is not uncommon observe throughout the U.S. authorized system to take action.

The case in opposition to Zhong said that he created a number of accounts on the Silk Highway market earlier than “triggering over 140 transactions in speedy succession with a purpose to trick Silk Highway’s withdrawal processing system into releasing roughly 50,000 Bitcoin.”

Zhong later acquired the identical quantity in Bitcoin Money following the Bitcoin arduous fork in 2017, which he additionally transformed into Bitcoin.

Following Zhong’s responsible plea on Nov. 4, the decide “entered a Consent Preliminary Order of Forfeiture as to Particular Property and Substitute Property/Cash Judgment forfeiting ZHONG’s curiosity in” the Bitcoin together with different belongings.

IRS brokers recovered over 50,000 Bitcoin in November 2021 from Zhong’s Georgia residence. Zhong additionally handed over extra Bitcoin up till June of this 12 months. The preliminary Bitcoin was recovered from an underground protected and a single-board pc inside a popcorn tin.

Zhong is going through as much as 20 years in jail for the crime.

Up to date Nov. 7, 6.37 pm to amend the valuation of the seized Bitcoin to present costs versus these reported by the DOJ.