By Richard Hines
Over $3.36 billion in cryptocurrency was seized from a hacker in a recent seizure. James Zhong was arrested and pleaded guilty to stealing funds from the Silk Road Marketplace, an illegal marketplace for trading illegal goods. He, on the other hand, hacked into the system by tricking it and withdrawing 50,000 bitcoins.
$3.36 Billion Seized From Hacker James Zhong
The United States Department of Justice recently seized $3.36 billion in bitcoin from a man named James Zhong. This seizure occurred when Zhong’s apartment was raided without warning.
Zhong pleaded guilty in court to criminal cryptocurrency activity after committing wire fraud. He committed this fraud ten years ago by stealing bitcoin assets from the now-defunct Silk Road Marketplace.
Zhong gained access to and stole these funds by hacking Silk Road’s withdrawal processing system.
According to federal authorities, Zhong stole the bitcoins from the Silk Road marketplace, where illegal goods are traded in cryptocurrency. Zhong took advantage of a flaw in the marketplace systems to hack and steal funds.
He carried out this hack by creating multiple accounts on this platform and storing between 200 and 2000 bitcoins. He then made multiple withdrawals all at once, tricking the marketplace into releasing more than allowed, a total of 50,000 bitcoins.
The hacker was identified as “Loader,” according to a discussion forum and Bitmex Research. Not only did he commit bitcoin laundering, but he was also caught trying to set up a sham bet with Bitcoin Cash advocate Roger Ver.
Arrest And Sentence
During the events leading up to his arrest, Zhong led a flamboyant lifestyle. This was confirmed by lavish lifestyles and pictures on yachts and planes, which he sponsored with money he laundered.
This is recorded as the second-largest crypto seizure ever recorded on the United States Radar.
The Federal Bureau of Investigation (FBI) shut down the business in 2013 after the laundering that took place on the Silk marketplace in 2012.
The founder of Silk Marketplace received two sentences of life in prison plus 40 years.
A 69,369 Bitcoin seizure was made from the Silk Marketplace while it was still operational in 2020. This is the largest seizure in cryptocurrency history.
The US government now has $4.5 billion in bitcoin in its possession. However, the US government does not have complete control over these tokens because it must first prove its case in court before being granted complete control over the tokens.