This is the largest seizure of cryptocurrencies in the country's history, the result of a fraudulent scheme that operated 10 years ago on the dark web
A United States prosecutor seized a billion dollars in stolen bitcoins (REUTERS)
The United States government requested the seizure of a billion dollars into bitcoins that had been stolen in 2012 from the Silk Road cryptocurrency sales page. This site, which operated in the deep web , was the victim of fraud for a total of 50,000 bitcoins -which at that time were valued at 3,360 million dollars. Since then, the cryptocurrency has lost nearly two-thirds of its value.
The fact was made known through a statement released by the US Attorney's Office for the Southern District of New York and follows the guilty plea for crypto theft on November 4 by James Zhong, 32, before Judge Paul G. Gardephe.
On November 9, 2021, after years of investigation by the American police, the agents found in Zhong's house in Georgia, the cryptocurrencies resulting from the Silk Road fraud. More precisely, during the raid in Gainesville, officers found 50 491.06251844 Bitcoin of the approximately 53,500 total in an underground safe and a single board computer that was submerged under blankets in a can of popcorn stored in a bathroom cabinet.
In addition, police recovered$661,900 in cash, 25 Casascius coins (physical bitcoin) with an approximate value of 174 Bitcoin, Additional 11.1160005300044 Bitcoins and four one ounce silver bars, three one ounce gold bars, four one ounce silver 10 bars< /b> and a gold colored coin.
During 2012, James Zhong stole more than 50,000 BTC from the Silk Road cryptocurrency sales page (REUTERS)
Zhong also voluntarily handed over an additional 1,004.14621836 Bitcoinsince March of this year, which are added to the total seized in 2021.
In the statement, federal prosecutor Damian Williams explained that “for almost ten years, the whereabouts of this huge chunk of missing Bitcoin had remained a mystery of more than 3.3 billion dollars. Thanks to state-of-the-art cryptocurrency tracking and good old-fashioned police work, law enforcement located and recovered this impressive stash of proceeds of crime. This case shows that we will not stop following money, no matter how cleverly hidden, even down to a circuit board in the bottom of a popcorn can.”
Zhong had mounted a sophisticated online scheme that allowed him to run the scam on Silk Road Marketplace. Although the defendant had not sold or acquired anything through this platform, he had about nine accounts -all with the minimum and essential information-.
During September 2012, Zhong's modus operandi was to trigger more than 140 transactions in rapid succession, which allowed him to cheat the withdrawal processing system and thus make more money than he had originally invested. For example, the prosecution detailed that on the 19th of the month the man deposited 500 bitcoins in his account and, less than five seconds later, he requested to withdraw the same amount five consecutive times. As a result, he withdrew his initial 500 BTC plus 2,000 with which he cheated the system.
Zhong had set up a sophisticated online scheme that allowed him to run the scam on the Silk Road Marketplace (ifep.com/Scyther)
Subsequently, as explained by IRS-CI Special Agent in Charge Tyler Hatcher, “he attempted to hide his loot through a series of complex transactions while hiding behind the mystery of the 'dark web'.”
The accused now faces a sentence that will be announced on February 22nd and that could leave him up to 20 years behind bars. On the other hand, currently, the prosecution seized Zhong's 80% stake in RE&D Investments LLC.
The Silk Road Dark Market
This website was famous on the deep web and used to be frequented by drug dealers and illegal traders looking for a platform to distribute drugs and all kinds of illicit goods.
< /p>Seizure of the Silk Road site before it was suspended for trading illicit goods
The page was blocked in 2013 by the US authorities after a series of investigations in which they concluded that it was a platform for illegal exchanges. Two years later, in 2015, its founder Ross Ulbricht, was sentenced by a jury to life in prison.
(With information from EFE)