According to the court documents:
Individual-1 earned 50,000 Bitcoin Cash (“BCH Crime Proceeds”) in addition to the 50,000 Silk Road BTC. Individual-1 then exchanged all of the BCH Crime Proceeds for further Bitcoin, totalling about 3,500 BTC, using an international cryptocurrency exchange.
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During the search, authorities also found Individual-1’s laptop, which included detailed ledgers detailing bitcoin transactions of assets configured in 40,000 and 10,000 blocks.
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Individual-1’s attorney handed 825.38833159 BTC to the government on or about March 25, 2022.
That corresponds to the following address:
https://bitinfocharts.com/bitcoin/address/bc1qmxjefnuy06v345v6vhwpwt05dztztmx4g3y7wp
The 40k BTC injected into that address is easily traceable back to the address in Loaded’s signed mail.
CANDID ADVICE
It’s a little silly to connect a whale address to social networking.
As expected, the article is deceptive. They did not “seize” bitcoin in the same way that they did not hack the couple who stole from Bitfinex. The man probably handed over the keys in exchange for some goodwill judgement.
Interesting. I’m curious if Bitcoin would be different today if he had been a major block supporter.
Dude had been hiding out in Gainsville, Georgia for ten years with billions of dollars in stolen bitcoin.
LOL, diamond hands
Oh, he was certainly spending a lot… It’s just difficult to spend $3 billion on cocaine and hookers. Law Enforcement Seized Over 50,676 Bitcoin Hidden in Devices in Defendant JAMES ZHONG’s Home in November 2021; ZHONG Has Now Pled Guilty to Unlawfully Obtaining the Bitcoin From the Silk Road Dark Web in 2012.
For a brief moment, I mistook you for the tldr bot. Thank you for being a good human.
It appears that the United States government will have a Bitcoin reserve in some form or another. The FBI is already one of the largest Bitcoin investors.
And who was it that “seized” the $3.36 billion? Obviously, the government, and they will almost surely abuse it. I believe we know, but we are expected to overlook that minor fact.
A fascinating read. It took them ten years to capture him. But they eventually got him. It will also take some time for Do kwon to be arrested and convicted.
James Zhong pled guilty to wire fraud after stealing over 50,000 Bitcoin from the Silk Road dark web marketplace in 2012. The US government took more than $3.3 billion in Bitcoin from him. The government is attempting to forfeit a total of 51,680.32473733 Bitcoin.
This summary was generated automatically by a machine and is not intended to replace reading the original article. DYOR, as always.
I can imagine the Bitcoin mascot collapsing and foaming at the lips.
What always impresses me about incidents like this is how little effort they make to disguise the stolen bitcoin.
Okay, you figured out how to steal bitcoin, well done (the hard part).
But then you hide the secret keys in a floor safe (on your property) and on the bottom of a popcorn tin???
There appears to be no encryption as well.
Also, why are you still in the United States? What happens after you do something like this? You’d want to flee to a country with no extradition pact with the US. Especially after they demolished the Silk Road. At that point, you know they have all of the server files.
On November 20, 2021, they grabbed his $50,000 bitcoin. That was the peak of the bull market. Coincidence? Or not?
Most likely a coincidence. Even if they wanted to sell the confiscated goods, I’m sure there would be a lot of paperwork to go through. We would not have heard about this news if that document had not been filed. The fact that this piece is being published now rather than in November shows that it could not have had an impact on markets because no one knew it happened at the time.
On another note…giving away 50,000 BTC under federal control would be one of the most short-sighted decisions in US history.
This indicates that they discovered a sheet of paper with a seed on it in the evidence room. How else are we going to maintain our seed phrases, eh? I hope the money is recovered.
As in the past, they will auction it for less than the market price. Auction at a lower price than the market price since bitcoin is not fungible and these coins are contaminated.
Bitcoin’s primary issue is its lack of privacy and fungibility.
Fed packing some bags, fam, we’re going to have a major bull run in 2024. But how is that possible? However, crypto cannot be monitored, correct? right? I thought the blockchain was completely invisible! /s
The chain analysis. Yes, it can be monitored, and all for one count of wire fraud. Not too shabby.
Let’s hope he still has some hidden BTC stored away.
Are you curious how bitcoin prices will react to this? Are those bitcoins ever going to be re-issued? Would the Feds have gone after this individual if the price of Bitcoin had not risen?
Serious question: do they put the BTC in a cold storage wallet and then trash it? When cash is seized, they frequently destroy it.
I’m confused; is it a felony to steal from criminals through an illicit market place?
“According to US Attorney Damian Williams, “James Zhong committed wire fraud more than a decade ago when he stole about 50,000 Bitcoin from Silk Road.” For nearly 10 years, the location of this large amount of missing Bitcoin had ballooned into a $3.3 billion mystery. Law enforcement was able to discover and retrieve this huge hoard of crime proceeds thanks to cutting-edge cryptocurrency tracing and good old-fashioned detective work. This case demonstrates that we will not stop looking for money, no matter how well it is hidden, even if it is on a circuit board at the bottom of a popcorn tin.”
Instead, my man should have used tornado cash. Based on an article. The guy basically gave it away. You have a better life if your friend’s name is Monero.
The federal government is one of the major holders of bitcoin. The beauty of cryptocurrency is that we select what is valid currency through widespread adoption. Once a large player controls a large portion of the market, we may gradually pull the rug out from under them by switching to another currency. Dogecoin is the future as bitcoin becomes increasingly tainted.
Want to discover the TRUTH about the dark web drug bazaar Silk Road? I am a journalist and the author of two books about the Silk Road, the first of which chronicles its rise as it occurred. I travelled throughout the world to see Silk Road’s top four lieutenants in person and interviewed numerous users.
You may have seen the film, which was entertaining, but the true story of Silk Road contains more twists and turns than any film could hope to depict.
I first discovered Silk Road in 2011, and soon began to spend a portion of every day there, writing about it for Australian newspapers in early 2012 and commencing a book on it later that year.
Silk Road, my debut novel, was accepted by my publisher while Silk Road was still going strong. Ulbricht was apprehended just as I was finishing it, so it had to become a “rise and fall” thing. However, that was revealed well before the trial, when so much was unknown.
Following the trial, I travelled around the world to visit the Silk Road’s top four lieutenants in person: one in Australia, one in Bangkok Central Prison, one fighting extradition in Ireland, and one under house arrest in the United States.
As a result, “The Darkest Web” looks not only into the reality behind Silk Road’s emergence and fall, but also into other portions of the Dark Web that are considerably more evil.
What do you think about the morality of dark nett markets like Silk Road?
In general, I believe that darknet markets provide a safer manner of purchasing pharmaceuticals for individuals who will use them anyway. Moving online eliminates the need to meet dealers in person, removing the potential of violence, and customers are more likely to get what they paid for than if they buy from a friend-of-a-friend or in a nightclub, according to rating and feedback systems.
It becomes confusing when darknetmarkets go into additional areas. Most large markets also sell fraud merchandise, personal information, hacking tools, and other similar items. Some even sell firearms. That becomes an issue.
Silk Road had a policy of not selling anything “with the intent to hurt or deceive another individual.” Some markets adhere to this principle, but many are simply there to generate money.
Yes, for a while I was a casual darkweb market user in order to obtain MMJ in a restricted state. I’m now in a legal position. It was convenient, and I learnt a little about crypto currency and cryptography as a result of the transaction. I set it aside for a while with some bitcoin in a wallet, and it quickly quadrupled. For me, it’s a win/win/win situation.
Selling, buying, or having guns is also not a concern, even if it is outlawed in some areas. What people do with the firearms is what might be harmful. Furthermore, the ship has sailed, 3D printed guns operate today and have for a few years, thus it is no longer relevant.
Cool but terribly short-sighted: the buyer’s convenience and protection is ALSO the seller’s convenience and protection, which maintains their authority.
The ease with which a distribution chain can be disrupted aids law enforcement and, perhaps, prevents more deaths by disrupting power and exposing the network than “consumer safety.”
In reality, I believe that the “consumer safety” story is a ruse intended to justify cartel normalisation.
If you followed the reasoning of “They’ll buy drugs anyway” to every crime, there would be far fewer rules and far more individuals would have a free pass to exploitation and unfairness.
Saying that anonymous communication channels would not permit crime if everything was lawful is simply illogical.
Excellent question! Too few people enquire about Variety Jones/Mongoose!
In fact, I go into considerable depth about it in The Darkest Web. It’s difficult to say for sure. Mongoose’s regular tendency was to exaggerate and make up a lot of things. When I visited him in prison in Bangkok, he said Diamond was genuine. There is clear proof of another unidentified rogue agent who extorted money from Silk Road.
The recent loss of $2 billion in bitcoin to the US government by someone only identified as “Individual X” has added to the intrigue. Could it be the enigmatic “Diamond”?
Do you believe the benefits of the dark web outweigh the drawbacks?
Face to face, do the folks behind some of the more infamous sections appear to be ordinary people?
I’m a huge privacy champion and a drug law reform enthusiast, so I support the Tor project, the EFF, and others in the sector. It is not the dark web itself that is terrible; rather, it is some of the people who use it. To be against the dark web is to be against the internet. It’s only a tool.
It’s funny since all of Silk Road’s senior lieutenants (Variety Jones, Inigo, Libertas, and SSBD) were exactly as I imagined them. Variety Jones/Mongoose, in particular, embodied his online image perfectly.
Lux, the owner of Hurt2theCore, the most horrible dark web site ever, was the one who surprised everyone. I blogged about my encounter with the monster here. TL;DR He was basically a child.
What is the most recent update on Ross Ulbricht’s prison sentence? Is he still able to file appeals? If that’s the case, how likely do you think he’ll get a lower sentence?
Ross has exhausted all legal options. He and his family were hoping for a pardon from Trump (who was said to be seriously contemplating it), but that didn’t happen.
Ross’s only hope today is a presidential pardon or major legislative changes.
I’d always heard that the Silk Road was primarily used for drug transactions; was there any other significant products often purchased?
Should I start with your first book or move on to the second?
Proceed to the second. It is more current.
Though the first one delves deeply into Silk Road as it occurred, it was published prior to the trial and a lot of other information we now have.
You mentioned on Twitter that Variety Jones and Shabang came in with the purpose of destroying Silk Road, but DPR persuaded VJ to change his mind. And all of this was said in some sort of confession from s?
Can you provide a link to that confession? I’d like to read everything.
Because Bitcoin (BTC) is not as secure as previously imagined, many markets are shifting to Monero (XMR).
Do you believe XMR will be completely anonymous?
Bitcoin is *exactly* as secure as early cryptographers predicted. Early darknet market adopters took a more basic approach, claiming that “it’s completely anonymous,” which it was never. However, chain analysis has greatly improved, making it much easier to follow bitcoin if you have an anchor point.
Monero is a privacy coin that should give better safety, although nothing is “100% anonymous.”