Today, the US Ministry of Justice announced the conviction to James Zhun, a mysterious hacker who stole 50,000 bitcoins with Silk Road darkennettplex. On November 4, Zhong found himself guilty of crimes related to money laundering and using a bug in the system for withdrawing funds from Silk Road, which allowed the attacker to withdraw hundreds of times more bitcoins than he had on the balance sheet.
The Ministry of Justice’s statement tells in detail about the seizure of 51,351.9 bitcoins from Zhun, the cost of which at the time of the operation of law enforcement agencies (November 2021) was more than $ 3.3 billion.
Law enforcement officers managed to find out that James Zhong was one of the members of the Silk Road darkennet lane, which worked from 2011 to 2013. According to the hacker himself, in September 2012 he stole 50,000 bitcoins with Silk Road, using the bug in the system for withdrawing funds.
Zhong replenished nine different accounts with an amount of 200 to 2,000 bitcoins, and then quickly spent 140 transactions for the removal of funds. Thus, the attacker forced the system forced the system to give him 50,000 bitcoins, which were then transferred to various wallets so that the crime was extremely difficult to detect.
In addition, in 2017, the attacker received 50,000 Bitcoin Cash tokens, which were later converted into 3,500 ordinary bitcoins.
As the prosecutor Damian Williams said, this huge piece of stolen cryptocurrencies in ten years turned into a riddle at a price of more than $ 3.3 billion. But thanks to modern methods of tracking cryptocurrencies and excellent police work, law enforcement agencies managed to find this impressive cache with a dishonestly earned cryptocurrency.
The Ministry of Justice’s statement explains that the search in the House of Zhong occurred on November 9, 2021, then law enforcement officers found the following in the attacker’s house:
50 491 bitcoins hidden in a safe in the underground and on a single-pay computer hidden in a tin from under the popcorn, which Zhong wrapped in a blanket and put in a cabinet in the bathroom;
11,12 bitcoins;
$ 661 900 in cash;
25 Casascius coins (physical bitcoin);
Four silver ingots weighing 28.35 grams;
Four silver ingots weighing 283.5 grams;
Three gold ingots weighing 28.35 grams;
One gold coin.
In addition to the above, the cybercriminal confiscated all property, including real estate investments, as well as additional digital assets not related to criminal proceedings.
In March 2022, the hacker voluntarily handed over to the authorities another 825.4 bitcoin, and in May 2022 – another 35.5 bitcoin.
The announcement of the sentence Zhong was scheduled for February 22, 2023. The maximum period that he threatens is 20 years in prison.