According to statements made by federal prosecutors on Monday, the United States government is seeking the forfeiture of more than one billion dollars’ worth of bitcoin that was stolen from the Silk Road online marketplace.
During a search of the residence of the defendant James Zhong in Gainesville, Georgia, in November 2021, investigators from the Internal Revenue Service found and seized 50,000 bitcoin, making it the second largest seizure in the history of the Department of Justice.
Zhong, who is 32 years old, entered a guilty plea to the charge of wire fraud on Friday. He admitted manipulating the processing system of Silk Road to transfer money to his accounts in 2012. The value of the bitcoin was above $3 billion at the time it was seized. Since then, its value has dropped by around two thirds. Some of the stolen bitcoin was located on a computer in a popcorn tin concealed in a bathroom closet.
In 2013, the United States government took control of the dark web marketplace known as Silk Road, which it described as a major marketplace for the sale of illegal drugs and the laundering of money.
In 2015, the court found Ross Ulbricht, the creator of Silk Road, guilty of seven counts of enabling the sale of illicit drugs using bitcoin. He was sentenced to life in prison. Ulbricht appealed the verdict, but the appeal was rejected in 2017.
At Zhong’s sentencing on February 22, 2023, before US District Judge Paul Gardephe, he may be facing anywhere from 27 to 33 months in prison.
Zhong’s sentencing is scheduled to take place before US District Judge Paul Gardephe on February 22, 2023. According to established federal guidelines, Zhong might be sentenced to between 27 and 33 months in prison. However, prosecutors may ask for a longer term.
In addition, the defendant agreed to give up his share in a real estate company, as well as $661,900 and a few other things.