US nails R59-billion Silk Road Bitcoin thief

The US Department of Justice (DoJ) has convicted a hacker who stole 50,000 Bitcoin — valued at $3.3 billion (R59 billion) at the time — from the “Silk Road” marketplace on the dark web, Bleeping Computer reports.

James Shong pleaded guilty to money laundering charges on 4 November 2022 and will hear his sentence on 22 February 2023. The maximum penalty is 20 years imprisonment.

The DoJ confirmed that authorities seized 51,351.9 Bitcoin in November 2021.

“For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery,” US attorney Damian Williams said.

Zhong was a member of the now-inoperative “Silk Road” marketplace on the dark web, from which he stole 50,000 Bitcoin by exploiting a bug in its transaction system.

He exploited a delay in the market’s transaction system that let him withdraw his own escrow multiple times.

Bitcoin split into Bitcoin Cash and Bitcoin SV in 2017, and Zhong received an additional 50,000 Bitcoin Cash which he converted to 3,500 Bitcoin.

The DoJ’s announcement revealed more details about the seizure, such as what was found in Zhong’s residence. This includes:

  • 50,491 Bitcoin hidden in two locations — hidden in an underground floor safe and on a single-board computer hidden in a popcorn tin in a bathroom cupboard;
  • 11.12 Bitcoin;
  • $661,900 in cash;
  • 25 Casascius coins worth 174 Bitcoin;
  • Four one-ounce silver bars;
  • Four ten-ounce silver bars;
  • Three one-ounce gold bars; and
  • One gold coin.

Zhong voluntarily handed an additional 825.4 Bitcoin over to authorities in March 2022, followed by another 35.5 Bitcoin in May.

Now read: We bought a loaf of bread from Pick n Pay with Bitcoin — and it just worked

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US nails R59-billion Silk Road Bitcoin thief