- The Department of Justice of the united states reported Monday that authorities seized $3.36 billion worth of bitcoin from a man.
- The man illegally obtained more than 50,000 bitcoins on the dark web marketplace Silk Road more than a decade ago.
James Zhong of Gainesville, Georgia, pleaded guilty on November 4 to wire transfer fraud in September 2012. The maximum penalty for violation is 20 years in prison.
New York attorney Damien Williams said:
“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 cutting-edge cryptocurrency tracking and good old-fashioned police. Law enforcement uncovered and recovered this impressive cache of criminal proceeds.
Added IRS Agent Hatcher:
“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 was a notorious part of the dark web that operated for almost two years. According to the Justice Department, the controversial network was used to launder money and provide illegal services from 2011 to 2013.
The U.S. government later closed the Silk Road, and in 2015 a jury found Ulbricht guilty of all charges and sentenced him 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,”
Since Zhong carried out the robbery, crypto-related crime has become less and less and easier to track down.
Kim Grauer, head of research at blockchain data company Chainalysis, said he spoke to PYMNTS about the matter in August. He started the year with 300 million cryptocurrency users, but few are involved in criminal activity.
“We can quantify it,” she said. “Of all the transactions identified in Chainalysis, she says less than 1% are related to criminal activity,” she said.
This equates to 3% to 5% of the U.S. dollar used for criminal purposes worldwide. But this is a wrong number, she said, arguing that it is much easier to see what is happening on her public blockchain, which records every transaction immutably and instantly.
“The transparency of this dataset allows us to see how much crime is happening in real-time,” said Grauer.” Every transaction made on the blockchain is available forever. It is always there.
What To Know About Cryptocurrency and Scams
Scammers may send emails or U.S. mail to your home that embarrasses or compromise your photos, videos, or personal information. They then threaten to go public if you do not pay them in cryptocurrency. This is extortion, a criminal extortion attempt. Please report it to the FBI immediately.
Report fraud and other suspicious activity involving cryptocurrency to;
- FTC at ReportFraud.ftc.gov
- Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint
- U.S. Securities and Exchange Commission (SEC) (sec.gov/tcrInternet Crime Complaint Center (IC3) ( ic3.gov/Home/FileComplaint)