Bitcoin theft: U.S. seeks forfeiture of more than $1B



The United States is in search of the forfeiture of more than US$1 billion in Bitcoin stolen from the Silk Road on-line market, federal prosecutors in Manhattan stated on Monday.

In the second largest seizure in U.S. Department of Justice historical past, Internal Revenue Service (IRS) brokers obtained the 50,000 Bitcoin throughout a November 2021 search of the defendant James Zhong’s dwelling in Gainesville, Georgia.

Zhong, 32, on Friday pleaded responsible to wire fraud for tricking Silk Road’s processing system into releasing the funds to his accounts in 2012.

By the time it was seized, the Bitcoin was price more than $3 billion. It has since misplaced about two-thirds of its worth.

Some of the stolen Bitcoin was discovered on a pc in a popcorn tin saved in a toilet closet, IRS particular agent Trevor McAleenan stated in an affidavit.

“For nearly 10 years, the whereabouts of this huge chunk of lacking Bitcoin had ballooned into an over $3.3 billion thriller,” U.S. Attorney Damian Williams in Manhattan stated in a press release. “We will not cease following the cash … even to a circuit board within the backside of a popcorn tin.”

The U.S. authorities seized Silk Road in 2013, describing the underground web site as an enormous unlawful drug and money-laundering market.

Silk Road creator Ross Ulbricht was convicted in 2015 of seven counts of enabling unlawful drug gross sales by way of bitcoin. He was sentenced to life in jail, and misplaced an enchantment in 2017.

Zhong might face 27 to 33 months in jail underneath really helpful federal tips at his Feb. 22, 2023 sentencing earlier than U.S. District Judge Paul Gardephe, although prosecutors can search an extended sentence.

The defendant additionally agreed to forfeit his stake in an actual property firm, plus $661,900 and different gadgets.

His lawyer Michael Bachner stated Zhong has returned “nearly” all of the bitcoin.

“Mr. Zhong is extraordinarily remorseful for his conduct that occurred over 10 years in the past when he was simply 22,” Bachner stated in a press release.

Reporting by Luc Cohen in New York; modifying by Barbara Lewis and Bill Berkrot


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