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Feds seize $3.36B Bitcoin stolen in crypto scam

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The US Feds announced Monday that it had seized approximately $3.36 billion worth of Bitcoin stolen during an unannounced 2021 raid on James Zhong's home.

Zhong pled guilty on Friday to one count of wire fraud, with a maximum prison sentence of 20 years.

According to the Feds, on November 9, 2021, US authorities seized approximately 50,676 Bitcoin, valued at more than $3.36 billion, from Zhong during a search of his house in Gainesville, Georgia. It is the Feds' second-largest financial seizure to date, following its February announcement of $3.6 billion in allegedly stolen cryptocurrency linked to the 2016 hack of the crypto exchange Bitfinex.

The raid was part of an investigation led by the United States Attorney's Office in Manhattan into the whereabouts of thousands of missing coins linked to Silk Road founder Ross Ulbricht.

Bitcoin was trading more than $60,000 at the time of seizure, boosting the worth of the loot for investigators by billions of dollars. The digital currency is currently worth around $21,000. As per current data, the seizure is worth just 1 billion dollars.

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How much Bitcoin, other crypto and cash was stolen?

Zhong began his criminal behaviour in 2012 when he defrauded Silk Road, a website known for trading drugs and cryptocurrencies, out of more than 53,000 Bitcoin. According to court documents, he set up a series of Silk Road accounts to mask his identity. He carried out 140 transactions quickly to trick the platform into releasing Bitcoin into those accounts. Zhong then transferred the digital currency into other accounts under his control.

Prosecutors claim that 50,000 Bitcoin were found in an underground safe and a single-board computer in a popcorn tin beneath a pile of blankets in Zhong's bathroom cabinet. He has since surrendered over 1,000 more coins and agreed to assist prosecutors in accessing the remaining coins and providing technical assistance.

Zhong agreed to sign over his 80% business ownership to the government as part of his plea deal for the Silk Road fraud. According to the forfeiture order, prosecutors also seized 25 Casascius coins worth 174 Bitcoin and $661,900 in cash. On Friday, Zhong was set free after posting a $310,000 bond.

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Author: Priya Kumari

Author: Priya Kumari

Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.

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