The U.S. Department of Justice seized about $3.36 billion in stolen bitcoin in November last year from the residence of crypto entrepreneur James Zhong, the U.S. attorney for the Southern District of New York, Damian Williams said on Monday.
According to a report, U.S. authorities seized about 50,676 bitcoin after a search of Zhong’s house in Gainesville, Georgia on Nov. 9, 2021, in the Department’s second largest financial seizure to date. This follows the $3.6 billion in allegedly stolen cryptocurrency linked to the 2016 hack of the cryptocurrency exchange, Bitfinex.
“For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery,” said U.S. Attorney Damian Williams.
Zhong pleaded guilty on Friday to one count of wire fraud, which carries a maximum sentence of 20 years in prison.
According to authorities, Zhong used a “sophisticated scheme” to steal the bitcoin from the Silk Road marketplace, a dark web forum used for purchasing illicit products. Silk Road was launched in 2011, closed two years later and its founder, Ross William Ulbricht, is now serving a life sentence in prison.
According to public records Zhong was the president and CEO of a self-created company, JZ Capital LLC, which he registered in Georgia in 2014.
According to a Chainalysis report, $1.9 billion worth of cryptocurrency had been stolen in hacks of services through July 2022, compared with just under $1.2 billion at the same point in 2021.