IRS Seizes $3.36B in Bitcoin from Silk Road Thief
In a significant bitcoin price seizure, the IRS Criminal Investigations (IRS-CI) has confiscated 50,676 bitcoin, currently valued at $3.36 billion, from James Zhong. Zhong was recently sentenced to prison for his role in the wire fraud, which involved exploiting a flaw in the Silk Road's bitcoin withdrawal system.
Zhong's illicit activities date back to September 2012 when he stole 50,000 bitcoin from the darknet market Silk Road. He exploited a flaw in the platform's withdrawal mechanism to carry out the theft. Following his guilty plea in April 2023, Zhong was sentenced to just over a year in prison for his role in the wire fraud.
In November 2021, law enforcement seized 50,491 bitcoin from Zhong's residence. Additionally, Zhong voluntarily surrendered an extra 861 bitcoin in March and May 2022. The seized bitcoin was consolidated into two wallets, with 40,000 in one and 10,000 in the other. Zhong also attempted to launder the funds through a mixing service between December 2020 and January 2021.
During the bitcoin price usd hard fork in 2017, Zhong gained an additional 50,000 Bitcoin Cash, bringing his total illicit holdings to 53,500 bitcoin.
The seizure of Zhong's bitcoin, valued at $3.36 billion, is one of the largest cryptocurrency concepts seizures in history. Zhong's sentencing follows the arrest of Silk Road's founder, Ross Ulbricht, on October 1, 2013. The case serves as a reminder of the potential consequences of exploiting vulnerabilities in crypto systems and engaging in illicit activities.
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