Bitcoin Thief On Dark Web, James Zhong Sentenced To One Year In Prison

Bitcoin, the world's largest cryptocurrency by market cap. (Photo; Doc. Unsplash)

JAKARTA - A court file reveals that the United States government plans to sell 41.000 bitcoin (BTC) seized this year, and has managed to sell 9.861.1707894 BTC on March 14, 2023. This was revealed after James Zhong was sentenced to one year in prison by District Judge Paul G. Gardephe, as announced by the New York Department of Justice.

Zhong had used a devious scheme to steal from Silk Road DNM, by creating nine Silk Road accounts and triggering 140 transactions that tricked the DNM withdrawal system into releasing 50.000 BTC to addresses under his control.

Interestingly, Zhong never used Silk Road for its intended purpose, and the fake accounts were created solely to launch attacks. Investigators estimate that it would take around 200 to 2.000 BTC to get a net total of over 50.000 BTC.

Additionally, a few years later, Zhong earned 50.000 bitcoin cash (BCH) when Bitcoin was forked in August 2017, and he exchanged all of that BCH using an overseas crypto exchange for 3.500 BTC after the fork. The funds were found at Zhong's home in Gainesville, Georgia, in a downstairs safe that was submerged under a blanket and a can of Cheetos popcorn.

Federal authorities seized some 51.351.89785803 bitcoins on three separate occasions, as well as some precious metals and $661.900 in cash. In addition, officials took Zhong's 80 percent stake in RE&D Investments, a Memphis company that owns a number of real estate properties.

Zhong, who is 32 years old, has pleaded guilty to wire fraud charges, and in addition to involving the New York Department of Justice, the case also implicates the Internal Revenue Service (IRS), the Western Cyber ​​Crime Unit of the Los Angeles Field Office, and the Athens-Clarke County Police Department.