Criminal Zhong Pleads Guilty To Stealing 50,000 Bitcoin From Silk Road

James Zhong pleaded guilty to illegally obtaining 50,000 Bitcoins via the Silk Road Dark Web in 2012 and has been sentenced to prison for 20 years.

Nov. 7, 2022
Criminal Zhong Pleads Guilty To Stealing 50,000 Bitcoin From Silk Road

According to the U.S. Justice Department officially released a press release on November 7th, James Zhong pleaded guilty to illegally obtaining those bitcoin via the Silk Road Dark Web in 2012 and has been sentenced to prison.

Zhong’s home was raided by police enforcement in November 2021, and more than 50,676 bitcoin were found hidden in devices inside. On Friday, November 4th, 2022, in front of United States District Judge Paul G. Gardephe, he entered a guilty plea.

According to the press statement, investigators searched ZHONG’s Gainesville, Georgia, house on November 9th, 2021, and found roughly 50,676.17851897 Bitcoin, which was then worth about $3.36 billion and it is worth $1.04 billion now.

Zhong made between 200 and 2000 BTC deposits into each of his Silk Road accounts. Within seconds following the deposits, he made a series of quick withdrawals. He then transferred this money from Silk Road and combined it into two significant sums.

Nevertheless, Zhong got 50,000 BCH when the Bitcoin blockchain hard-forked in 2017 to create Bitcoin Cash. He used international exchanges to convert BCH to Bitcoin. His Bitcoin holdings after this conversion, referred to as the “Crime Proceeds,” increased to 53,500 BTC.

In an underground safe and a computer board, they discovered the wallet keys for 50,591 of the 53,500 BTC. More than $600,000 in cash, 25 real Bitcoins, and a number of precious metals were also seized. Later, Zhong gave up another 1,004 Bitcoins freely.

However, the maximum term for him is 20 years in jail. Congress has set the maximum sentence that might be imposed in this case; it is presented here just for informative purposes; the court will decide how to sentence the prisoner. In addition, on February 22nd, 2023, Judge Gardephe is slated to sentence ZHONG.

US Attorney Damian Williams said in the press release: 

Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds. 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.

The Silk Road An illegal Marketplace For Bitcoin

The illegal Silk Road, a marketplace that largely took bitcoin as payment, was located on the darknet between 2011 and 2013. Once the website’s owner, Ross Ulbricht, was captured, it was shut down. Ulbricht is presently incarcerated for 40 years with no possibility of parole while also serving a double life sentence.

According to a November 2021 announcement from the US Marshals Service (USMS), Ross Ulbricht, the alleged owner of the Silk Road, would have 50,000 bitcoins worth around $20 million put up for auction.

The USMS said in the statement that this sealed bid auction is for a part of the bitcoins found in wallet files stored on specific computer hardware owned by Ross William Ulbricht that was confiscated on or around October 24th, 2013.

The sale of 50,000 bitcoins for $20 million in 2014 was the first of numerous lots of confiscated currency that US marshals auctioned off. A few months before, a 30,000-coin auction was held.

Related Reading | Ethereum Upcoming Hard Fork Will Allow Staked ETH Withdrawals In March 2023

Ammar Raza

Associate editor
Skilled in crafting compelling content, with a deep enthusiasm for blockchain technology. I offer precise and easily comprehensible perspectives on cryptocurrencies, decentralized finance, and the ever-evolving landscape. Count on me as a reliable resource to remain informed about the latest advancements in the world of crypto.