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US DOJ announces seizure of $3.36B in cryptocurrency

TechCrunch logo TechCrunch 11/7/2022 Jacquelyn Melinek

The U.S. Department of Justice on Monday announced that law enforcement seized $3.36 billion of bitcoin from a man who “unlawfully obtained” over 50,000 bitcoin from darkweb market Silk Road over a decade ago.

The U.S. Attorney for the Southern District of New York said that James Zhong of Gainesville, Georgia, pleaded guilty on November 4 to committing wire fraud in September 2012. The charge carries a maximum sentence of 20 years in prison.

The plea came almost a year after law enforcement seized 50,676.17851897 bitcoin, then valued at over $3.36 billion, from Zhong’s home, the statement said. Officials found the bitcoin in an underground floor safe and on a single-board computer that was hidden under blankets in a popcorn tin placed in a bathroom closet.

Law enforcement also recovered $661,900 in cash, 25 Casascius coins of bitcoin (valued at about 174 bitcoin), an additional 11.116 bitcoin, and a handful of silver- and gold-colored bars.

The whereabouts of this massive amount of bitcoin was a mystery for almost 10 years, U.S. Attorney Damian WIlliams said in the release.

It was the largest cryptocurrency seizure in the history of the U.S. DOJ at the time, and today remains the department’s second-largest financial seizure, it stated.

Silk Road was an online black market that was launched in 2011 by the then-anonymous “Dread Pirate Roberts” (later uncovered as Ross Ulbricht). It was notoriously known for money laundering activities and for buying and selling illegal drugs with bitcoin. In under two years, the Silk Road was shut down by the U.S. governmen,t and by 2015, Ulbricht was unanimously convicted by a jury and sentenced to life in prison.

“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,” Williams said.

US DOJ announces seizure of $3.36B in cryptocurrency by Jacquelyn Melinek originally published on TechCrunch

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