The Department of Justice seized $3.36 billion in cryptocurrency today in what is a historic conviction. The U.S. executive department announced that James Zhong has pled guilty to fraud in connection to the Silk Road black marketplace.
It was revealed today that New York Attorney Damian Williams has led the seizure of over 50,000 Bitcoin in connection with the Silk Road dark web fraud. This was additionally executed alongside Tyler Hatcher, a Special Agent in Charge of the IRS Criminal Investigation LA office.
Silk Road Fraud Case Leads to Historic Seizure
A search warrant issued against James Zhong’s Georgia home led law enforcement to 51,676. 17851897 Bitcoin. The massive seizure was valued at over $3.36 Billion and is the largest cryptocurrency seizure in U.S. history. Additionally, it was the second-largest financial seizure ever.
Damian Williams stated, “James Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from Silk Road. For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery.”
“Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work,” Williams continued, “law enforcement located and recovered this impressive cache of crime proceeds.”
IRS Agent Hatcher added, “Mr. Zhong executed a sophisticated scheme designed to steal Bitcoin from the notorious Silk Road Marketplace. Once he was successful in his heist, he attempted to hide his spoils through a series of complex transactions which he hoped would be enhanced as he hid behind the mystery of the ‘darknet.'”
The Silk Road is a notorious corner of the dark web that was in operation for about two years. Moreover, according to the Department of Justice, from 2011 to 2013 the platform was utilized for illegal drugs, illegal services, and to launder funds.
The DOJ added that Zhong would utilize the Silk Road to deposit anywhere between 200 to 2,000 Bitcoin. Subsequently, through a series of withdrawals, Zhong would hope to defraud even more Bitcoin than he deposited.
Zhong has pled guilty to wire fraud, which carries a maximum sentence of 20 years in prison.