On this Monday, the U.S Department of Justice (DOJ) announced that they have successfully seized $3.36 Billion worth of Bitcoin which is the result of the unannounced raid. This raid was done in 2021 on the James Zhong residence.
James Zhong has pleaded guilty to wire fraud done in 2013 and a sentenced to Jail for a maximum time duration of 20 years. He will be sentenced on 22 February. According to the DOJ in this raid in total 50, 676 Bitcoin were seized which was of a value of $3.36 Billion (right now its value will be$1.05 billion because of the bear market).
Agents also found $661,900 in cash, 25 Casascius coins (actual bitcoin), 11.1160005300044 more bitcoin, four one-ounce silver-colored bars, three one-ounce gold-colored bars, four 10-ounce silver-colored bars, and one gold colored coin during the same raid. This raid was done on the house of Zong in Gainesville, Georgia, on Nov. 9, 2021.
This raid wasn’t the only raid with such a huge crypto amount, before this we get to see $3.6 Billion worth of crypto raids in February of this year which was of the hack that happened in 2016 on a cryptocurrency exchange called Bitfinex.
Authorities gave the details of the incident which told that the Zhong stole this money from an illegal silk road marketplace which was used for illicit purposes of buying and selling drugs with cryptocurrency. This platform was launched in 2011 and the Federal Bureau of Investigation shut it down 2 years later in 2013. The founder of the silk road marketplace, William Ulbricht, is given life imprisonment.
According to U.S. Attorney Damian Williams during the press release
“For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery.”
In this case, the Southern District of New York commented that “Zhong took advantage of the marketplace’s vulnerabilities to execute the hack.”
During the press release, the authorities informed that they even found the computer that was hidden deep under the pile of blankets in a popcorn tint in the bathroom closet which has all the stolen crypto.
Who is James Zhong, and how he stole these Bitcoins?
Zhong is known as the CEO of the company JZ Capital LLC which is registered in Georgia in 2014 in the public records. And his LinkedIn profile of Zhong tells that the company is about investment and venture capital. The profile further mentions that James is a “large early bitcoin investor with extensive knowledge of its inner workings” and his experience in software development in the computer programming language.
Zhong is known to be living a luxurious lifestyle as his social media includes pictures of him on yachts or at high-profile football games.
Zhong utilized a “sophisticated strategy,” according to Special Agent in Charge Tyler Hatcher of the Internal Revenue Service’s Criminal Investigation, to steal the bitcoin from Silk Road. According to the press release, Zhong set up nine phony accounts on Silk Road in September 2012 and funded each one with 200–2,000 bitcoin. The marketplace’s withdrawal-processing system was duped into releasing almost 50,000 bitcoin into his accounts after he immediately started over 140 transactions. The Bitcoin was subsequently moved by Zhong into a number of his own controllable wallet accounts.
Other crypto-related hacks
In 2022 only more than $2 Billion money is lost through these crypto scams and even the big platforms like Binance faced the situation of such scams where they faced a $570 million hack in October 2022.
In March 2022 the Ronin Network also went through a hack where they lost around $600 Million in March 2022. Such scams like this happened earlier as well where in 2021 $1 Billion worth of crypto was hacked by hackers.
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