Silk Road Hacker Received Only One Year Jail For Theft Of More Than 50,000 BTC

Key Points:

• The US Attorney for the Southern District of New York revealed that James Zhong was sentenced to one year in prison for wire fraud in the 50,000 BTC Silk Road robbery.
• Zhong stole the BTC in 2012 and managed to keep his crime hidden for around ten years before facing accusations.
• In November 2021, US officials confiscated Zhong’s BTC assets from his Georgia residence.

The US Attorney’s Office for the Southern District of New York announced the sentence of a man who pleaded guilty to wire fraud charges in 2012 in connection with illegally acquired Bitcoin from the Silk Road.

The US Justice Department said on April 14 that James Zhong was sentenced to one year and one day in prison for crimes connected to the execution of a conspiracy to steal more than 51,680 Bitcoin. Zhong entered a guilty plea to the charges in November 2022 and is awaiting a sentence.

U.S. Attorney Damian Williams stated:

“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.”

In December 2012, while withdrawing money from Silk Road, a prominent drug-trafficking website in the underground, James Zhong discovered a software fault.

This website is renowned as the Amazon of the underground because it allows users to sell a variety of commodities, including narcotics. Silk Road is recognized as a haven for unlawful transactions because of its high degree of secrecy and security.

Zhong was just 22 years old when he went to Silk Road to acquire cocaine. Zhong observed that the web enables users to withdraw double the number of Bitcoins that they have put in after unintentionally double pressing the withdraw button.

According to court papers presented by federal prosecutors, Zhong frequently established new accounts after identifying the vulnerability and stole 50,000 Bitcoins worth around $600,000 within hours.

According to Williams, Zhong stole the BTC in 2012 and hid his wrongdoing for around ten years before facing prosecution. In November 2021, US police confiscated Zhong’s Bitcoin assets from his Georgia home, discovering the majority of the cryptocurrency in a floor safe and a computer is hidden in a popcorn tin. At the time, the coins were valued around $3.4 billion.

According to the Internal Revenue Service (IRS), the United States has confiscated more than $10 billion in cryptocurrencies in the last two years alone via successful prosecutions based on tracing currency transactions. Instead of serving subpoenas on banks or financial organizations, investigators may now examine the blockchain and trace the journey of Bitcoin.

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Harold

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