The United States (U.S.) Department of Justice (DoJ) has charged James Zhong for stealing 50,000 Bitcoin or $1.57 billion at press time ($3.4 billion at the time) via the Silk Road dark web. The United States Attorney for the Southern District of New York, Damian Williams, announced that James Zhong has been sentenced to a year and one day in prison on wire fraud charges levied in September 2012.
Notably, Zhong is alleged to have unlawfully amassed around 50,000 Bitcoin (BTC) from the Silk Road dark web internet marketplace. The sentence in question is imposed by United States District Judge Paul G. Gardephe. Further, under the auspices of investigating Zhong’s case, the Government has gained the necessary “final orders of forfeiture for, among other items, 51,680.32473733 Bitcoin.”
U.S. Attorney Damian Williams said James Zhong not only committed but also concealed his ill deeds. Zhong, via a decentralized Bitcoin mixer, tried hiding the traces of his acts.
Back in 2012, James Zhong committed wire fraud by stealing 50,000 Bitcoin from Silk Road, and for the next 10 years, he managed to conceal what he had done and how he obtained his fortune.
Zhong used a decentralized Bitcoin mixer, an overseas cryptocurrency exchange, and an impressive array of technological tools to frustrate tracing efforts. But thanks to the relentless and skillful efforts of law enforcement in following the money, the federal government uncovered Zhong’s scheme and obtained final orders of forfeiture for over 51,680 Bitcoin.
Cyber-criminals should heed this message: we will follow the money and hold you accountable, no matter how sophisticated your scheme and no matter how long it takes.
The investigation initiated by the U.S. DoJ revealed that Zhong created “approximately nine Silk Road accounts (the “Fraud Accounts”), to trigger “over 140 transactions in rapid succession. Zhong is said to have done so to confuse “Silk Road’s withdrawal-processing system” to release “50,000 Bitcoin from its Bitcoin-based payment system into ZHONG’s accounts.”