US investigators find the billion’s worth of Bitcoin from the Silk Road hack in one of the largest seizures in history. Long prison sentence threatened.
The US Department of Justice announced that in November last year it seized $3.36 billion worth of bitcoin stolen from the illegal darknet trading platform Silk Road.
The 50,676 Bitcoin were found on various devices in the home of a hacker named James Zhong. They were hidden in a safe on the floor and even in a popcorn can. This was reported by the British BBC on Monday. According to the report, Zhong pleaded guilty to hacking funds from the notorious Silk Road marketplace in 2012. The following year, in 2013, the FBI shut down the drug trafficking platform on the Tor network. Silk Road reportedly had around a million registered members. The service was operated as a so-called hidden service in the Tor network. These hidden services are designed to keep the real IP addresses of the server secret.
In late 2014, part of Silk Road’s balance went under the hammer – nearly 30,000 bitcoins with a market value of $13 million at the time. In total, the investigators confiscated more than 144,000 bitcoins on the Silk Road operator’s private computers.
Second largest confiscation in the history
The confiscation in a police raid on Zhong’s home in the US state of Georgia last year, which has now been announced by the US Department of Justice, is the second largest in history, according to the US authorities. At the time, the bitcoin price was soaring – and the bitcoins confiscated were worth more than $3.3 billion. At the current rate, they would only be a third of their value today.
Officers involved in the raid said they found the crypto assets in the home on hard drives and other storage devices in a floor safe and on a tiny computer hidden in a popcorn tin in a bathroom cabinet. According to police, Zhong was able to steal Silk Road’s funds by exploiting a vulnerability in the site’s payment system, dubbed the “Amazon of the dark web.” In September 2012, he set up multiple accounts on the trading platform and deposited a small amount of bitcoin into his digital wallets. He then found a way to quickly withdraw far larger amounts without raising suspicion.
Silk Road was a dark web marketplace that operated from around 2011 to 2013. Criminal transactions of all kinds were conducted via the platform. It was used by drug dealers and other illegal sellers to deal in drugs, credit card data, or Trojans, among other things. In 2015, Silk Road founder Ross Ulbricht, who is said to have been active under the nickname “Dread Pirate Roberts”, was unanimously sentenced by a jury to twice life imprisonment.
Zhong pleaded guilty to hacking the Silk Road site on November 4. He faces up to 20 years in prison. Meanwhile, the investigative authorities are celebrating their success.
“For almost a decade, the whereabouts of this vast amount of Bitcoin had escalated to a $3.3 billion+ mystery. Using the latest cryptocurrency detection technology and good old-fashioned policing, law enforcement has been able to locate and recover this impressive fortune Investigating US Attorney Damian Williams said in a statement from the US Department of Justice on Monday. “This case shows that we won’t stop following the money, no matter how cleverly it’s hidden, even on a circuit board at the bottom of a popcorn can.”