As introduced by the U.S. Legal professional’s workplace for the Southern District of New York, a defendant who pleaded responsible to wire fraud costs associated to “unlawfully obtained” Bitcoin (BTC) from the Silk Street market has been lastly been sentenced. The 32-year-old James Zhong stole greater than 50,000 BTC from the notorious drug-trafficking website again in 2012 when BTC was price round $12.
Second Highest Bitcoin Heist
In response to stories, Zhong was capable of disguise his theft for about ten years earlier than being apprehended. Nevertheless, in November 2021, American officers raided Zhong’s house in Georgia and seized all Bitcoin property, discovering nearly all of the digital foreign money in a flooring secure and a pc hidden inside a popcorn tin. On the time, the worth of the cryptocurrencies was round $3.4 billion, making it the second-largest monetary seizure in US historical past.
Within the U.S. Legal professional’s sentencing memo for Silk Street Bitcoin stealer James Zhong: investigators seized felony proceeds from “a single-board pc that was submerged beneath blankets in a popcorn tin saved in a rest room closet.” (Sentencing is right now at 3 pm). pic.twitter.com/7aamQryQ6B
— Rachel Scharf (@rscharf_) April 14, 2023
The prosecutors declare that Zhong spent practically $16 million of the revenues on investments in actual property, luxurious resorts, lavish pubs, nightclubs, and in proudly owning a fleet of Lamborghinis. Contemplating right now’s Bitcoin price, the confiscated asset is now estimated to be round $1.56 billion.
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Exploiting Silk Street’s Flaw
Zhong reportedly took benefit of an inherent flaw in Silk Street’s pockets characteristic which ultimately led him to multiplying his Bitcoin stack. The U.S. Division of Justice notes that in a single occasion, Zhong transferred 500 bitcoins right into a pockets and inside 5 seconds made 5 fast withdrawals. By doing so, he exploited a weak spot in Silk Street’s system, which resulted in his preliminary funding turning into 2,500 Bitcoins.
Moreover, Zhong loved the hard fork cut up that occurred in 2017 between Bitcoin and Bitcoin Cash (BCH), have been he acquired and equal quantity of 50K BCH as properly. Other than the 50K Bitcoins, the legislation enforcement have been additionally capable of seize practically $662,000 in money, 25 Casascius cash and steel cash which represented bodily Bitcoins however in actuality contained non-public keys to achieve entry to the actual digital foreign money.
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