Feds Announce Silk Street Cryptocurrency Haul #Feds #Announce #Silk #Road #Cryptocurrency #Haul


Cryptocurrency Fraud
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Cybercrime
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Fraud Administration & Cybercrime

A Real Estate Developer Stole 50,000 Bitcoins from the Darkish Internet Emporium a Ten years Back

Feds Announce Silk Road Cryptocurrency Haul

A Georgia residence developer who, a decade back, stole about 50,000 Bitcoin from cybercrime dim web website Silk Highway pled responsible Friday to wire fraud, top federal prosecutors Monday to request the cryptocurrency’s formal seizure from convicted Silk Highway proprietor Ross Ulbricht, aka the “Dread Pirate Roberts.”

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Court docket filings exhibit James “Jimmy” Zhong, 32, in 2012 exploited a flaw in the Silk Street cryptocurrency wallet triggered by fast, millisecond withdrawals. He stole about $577,000 well worth of cryptocurrency, dependent on a desk of historical Bitcoin benefit. Right after splitting up the stolen resources in a bid to obfuscate their origin, Zhong stored the Bitcoin on equipment saved in an underground flooring protected and a “one-board pc” held inside of a popcorn tin in a bathroom closet underneath a pile of blankets.

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At least that is where by an IRS criminal agent located them through a Nov. 9 2021 raid on Zhong’s Ganisville, Ga., residence that also turned up more than 50 % a million dollars in income, evidently treasured metals and 25 bodily Bitcoin tokens identified as Casascius cash worthy of somewhere around 174 Bitcoin. At the time of the federal raid, the recovered stolen cryptocurrency was value $3.36 billion, which the Department of Justice claims was then the greatest federal seizure of cryptocurrency and stays the next greatest economic seizure, at any time. The recovered cryptocurrency is now well worth roughly $1 billion.

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Zhong took a plea offer requiring him to forfeit the stolen bitcoin, the money and the contents of his protected, as nicely as his 80 per cent stake in RE&D development, a Memphis, Tenn., actual estate problem which is been fighting a creditors’ lawsuit in federal bankruptcy court considering that September. Zhong faces up to 20 several years in jail soon after pleading guilty plea to 1 rely of wire fraud.

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The FBI arrested Ulbricht in 2013 in a San Francisco public library when he was logged on to the Silk Road unlawful market emporium from his notebook as the technique administrator, employing his assumed identify of Dread Pirate Roberts. Due to the fact founding the website in 2011, Ulbricht paid roughly $650,000 in murder-for-use schemes, even though none of the five supposed victims in fact died as a consequence.

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Soon after his arrest, Ulbricht turned down a plea sentence offer of a minimum 10 12 months sentence. Pursuing a jury trail ensuing in a 7 felony conviction, Ulbricht is now serving a double daily life sentence without having the risk of parole in a higher-security prison in Tucson, Ariz. A federal choose in June turned down Ulbricht’s endeavor to vacate the sentence on constitutional grounds.

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Federal prosecutors a standing forfeiture get from Ulbricht implies the cryptocurrency recovered from Zhong is now federal assets.

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Zhong was in a position to steal the Bitcoin soon after finding that he could trigger Silk Road’s payment processing method into paying out excess quantities by creating an account and then generating withdrawals in just the same second. That way a deposit of 500 Bitcoin could result in a 2500 Bitcoin haul.

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Around the program of a few days, he made about nine person accounts and made 140 transactions.

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U.S. Legal professional Damian Williams for the Southern District of New York attributed Zhong’s capture to “state-of-the-artwork cryptocurrency tracing and very good previous-fashioned police work.”

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A federal choose release Zhong Friday on bail of $310,000.



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