Department of Justice reveals massive $3.36B crypto seizure – Fox Business

Department of Justice reveals massive $3.36B crypto seizure – Fox Business

Blockchain Crypto Market Technology
November 8, 2022 by Coinvasity
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Bitcoin Foundation Chairman Brock Pierce discusses the cryptocurrency market, its influence on politics and provides an outlook of the market on “Cavuto: Coast to Coast.”
The Department of Justice (DOJ) on Monday announced a massive seizure of bitcoin stolen from the now-shuttered Silk Road online marketplace and the conviction of the person who the agency said took the cryptocurrency.
Roughly a year ago, authorities took possession of about $3.36 billion worth of stolen bitcoin, marking the DOJ’s "second largest financial seizure ever," according to a release from the agency. The more than 50,600 bitcoin had been unlawfully obtained years ago by James Zhong, who the DOJ said pleaded guilty Friday to a wire fraud charge.
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According to the DOJ, Zhong committed the wire fraud in September 2012, when he tricked Silk Road’s withdrawal-processing system into releasing the bitcoin into nine accounts he had set up on the illicit marketplace. He tricked the system by making initial deposits of bitcoin and then executing withdrawals "in rapid succession," the agency said.
Bitcoins are seen in this illustration picture taken Sept. 27, 2017. (Reuters/Dado Ruvic/Illustration / Reuters Photos)
The Department of Justice (DOJ) on Monday, Nov. 7, 2022, announced a massive seizure of bitcoin stolen from the now-shuttered Silk Road online marketplace. (Chesnot/Getty Images / Getty Images)
He subsequently moved the bitcoin into various different addresses in an effort to "prevent detection, conceal his identity and ownership, and obfuscate the Bitcoin’s source," the DOJ release said.
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Years later, in November 2021, Internal Revenue Service, Criminal Investigation agents recovered nearly 50,500 bitcoin of the total "crime proceeds" from an "underground floor safe" and a "single-board computer" hidden in a popcorn tin inside a bathroom closet in his Georgia home, according to the DOJ release.
Bitcoin was trading above $42,300 early Monday morning, Nov. 7, 2022, as the cryptocurrency market was down overall. (iStock / iStock)
"For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery," U.S. Attorney Damian Williams said in a statement. "Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds."
Zhong’s sentencing is slated to take place Feb. 22. He faces up to 20 years of imprisonment for the single wire fraud count, the DOJ said.
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