Nov. 2021 seizure was valued at staggering $3.36 billion at the time [300 words].
What: James Zhong, of Gainesville, Georgia on Nov. 4th, 2022, pleaded guilty to illegally obtaining 50,000 Bitcoin from the Silk Road dark web marketplace in 2012. He faces upto 20 years in prison.
Zhong’s plea before federal court in the Southern District of New York, followed a Nov. 2021 search of his home when law enforcement seized some 50,676 Bitcoin. The cryptocurrency, then valued at a staggering $3.36 billion, was found hidden in an underground floor safe, and on a computer buried under blankets in a popcorn container stored in a bathroom closet. The seizure is the DOJ’s second largest financial seizure ever.
In addition to the Bitcoin, the government is also seeking to confiscate Zhong’s 80% interest in RE&D Investments, LLC a Memphis-based company with substantial real-estate holdings; nearly $662,000 in cash seized from Zhong’s home” and other items.
Silk Road operated from 2011 to 2013. It was a marketplace that criminals used to peddle drugs, counterfeit prescription medicines and pirated good. In 2015 a jury convicted Silk Road founder Ross Ulbricht on multiple criminal charges. He was sentenced to life in prison and is currently serving his sentence in a Tucson penitentiary.
How Zhong stole from Silk Road: Zhong’s tactic for stealing was to open accounts at Silk Road, make initial deposits of between 200 and 2,000 Bitcoins into it and then quickly execute a series of withdrawals. For example, in one instance he deposited 500 Bitcoin into a Silk Road wallet and t less than five second later, he executed five withdrawals of 500 Bitcoin—all within one second—to make a net gain of 2000 Bitcoin.
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