By Luc Cohen
NEWYORK -The US is looking for the forfeiture of greater than $1 billion in Bitcoin stolen from the Silk Street on-line market, federal prosecutors in Manhattan stated on Monday.
Within the second largest seizure in U.S. Division of Justice historical past, Inner Income Service (IRS) brokers obtained the 50,000 Bitcoin throughout a November 2021 search of the defendant James Zhong’s dwelling in Gainesville, Georgia.
Zhong, 32, on Friday pleaded responsible to wire fraud for tricking Silk Street’s processing system into releasing the funds to his accounts in 2012.
By the point it was seized, the Bitcoin was value greater than $3 billion. It has since misplaced about two-thirds of its worth.
Among the stolen Bitcoin was discovered on a pc in a popcorn tin saved in a toilet closet, IRS particular agent Trevor McAleenan stated in an affidavit.
“For nearly 10 years, the whereabouts of this large chunk of lacking Bitcoin had ballooned into an over $3.3 billion thriller,” U.S. Legal professional Damian Williams in Manhattan stated in an announcement. “We received’t cease following the cash … even to a circuit board within the backside of a popcorn tin.”
The U.S. authorities seized Silk Street in 2013, describing the underground web site as an enormous unlawful drug and money-laundering market.
Silk Street creator Ross Ulbricht was convicted in 2015 of seven counts of enabling unlawful drug gross sales through bitcoin. He was sentenced to life in jail, and misplaced an enchantment in 2017.
Zhong may face 27 to 33 months in jail underneath really useful federal tips at his Feb. 22, 2023 sentencing earlier than U.S. District Decide Paul Gardephe, although prosecutors can search an extended sentence.
The defendant additionally agreed to forfeit his stake in an actual property firm, plus $661,900 and different gadgets.
His lawyer Michael Bachner stated Zhong has returned “nearly” all the bitcoin.
“Mr. Zhong is extraordinarily remorseful for his conduct that occurred over 10 years in the past when he was simply 22,” Bachner stated in an announcement.
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