Last year, the US Department of Justice seized $3.36 billion worth of Bitcoin stolen from a darknet website by a hacker. The thief, James Zhong, hid a stash of 50,676 Bitcoins in a popcorn tin secured in an underfloor safe.
Raiding His House
The police raided his house in Georgia sometime in 2021 and found the stash. Afterward, Zhong admitted to hacking the infamous Silk Road marketplace dark site in 2012 and pled guilty to the allegations.
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Hiding In Plain Sight
Zhong littered the Bitcoin on several hard drives, a small computer in a popcorn tin, and other storage devices. He placed the safe underneath a floorboard in his bathroom to throw people off its trail.
Bypassing The System
When asked how he bypassed the Silk Road marketplace system in 2012, Zhong said he exploited a flaw in its payment system.
Zhong’s Method
The hacker set up multiple accounts with small amounts of Bitcoins then withdrew large sums from them before he could raise suspicion.
Home To Illegal Dealers
Exploiting the marketplace came easy because the darknet protected unscrupulous users from drug dealers to black market traders. There wasn’t fear of the authorities getting involved.
Silk Road Ran For Three Years
The police got a step closer to catching Zhong in 2013 after shutting down the darknet – it ran for three years from 2011 – 2013.
Shutting Down Silk Road
In 2015, a court convicted Silk Road marketplace’s founder, Ross Ulbricht and sentenced him to life in prison. The next step was recovering funds lost on the dark web.
The Money Tripled In Value
After a ten-year search for the culprit using cryptocurrency tracing, the police finally got Zhong. In those years, the $1.1 billion coins tripled in value to $3.36 billion.
Entering A Guilty Plea
It took the police about eight years after shutting down Silk Road to catch Zhong, and when they did, they kept the raid quiet. On November 4, 2022, the hacker pled guilty to several counts of internet fraud and awaited sentencing.
Facing Up To 20 Years
Since he pled guilty, Zhong faces a potential 20-year sentencing as the maximum possible for his crime.
Second Largest Raid
The raid and retrieval is the second largest in U.S. History and came at an opportune time. Bitcoin peaked in 2021 bringing the stolen coins’ value to $1.1 billion.
Authorities Won’t Rest
The authorities want criminals like Zhong to know they’ll never rest no matter how long it takes to bring them to book.
The Bitfinex Hack Case
Last February, a few months after catching Zhong, the authorities made another massive seizure of $4 billion worth of Bitcoin from the 2016 Bitfinex hack case.
The DOJ Would Always Follow The Money
The Prosecutor for the DOJ told CNN ,
