The Justice Department said Monday it seized $3.4 billion worth of bitcoin stolen in the 2012 hack of the Silk Road dark web marketplace.
The DOJ said it recovered more than 50,676 bitcoin from the home of James Zhong who pleaded guilty to wire fraud charges following what the agency described as the largest cryptocurrency seizure in its history.
The DOJ recovered the stolen bitcoin in a November 2021 search of Zhong’s home in Gainesville, Georgia. The department said agents found the keys to the tokens in an underground floor safe and on a “single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet.”
Zhong “executed a sophisticated scheme designed to steal bitcoin from the notorious Silk Road Marketplace” and “attempted to hide his spoils through a series of complex transactions,” Tyler Hatcher, a special agent with the IRS criminal investigation team, said in a statement.
Silk Road was a notorious online marketplace used by drug cartels and other criminal organizations that used cryptocurrencies, mainly bitcoin, for illicit transactions. The marketplace was effectively shut down by federal authorities in 2015.
The DOJ said Zhong managed to steal bitcoin from the marketplace by creating about nine fraud accounts and “triggering over 140 transactions in rapid succession in order to trick Silk Road’s withdrawal-processing system.” He then transferred the stolen bitcoin to separate addresses under his control.
The DOJ said agents recovered other items from Zhong’s home, including $661,900 in cash, 25 Casascius coins, also known as physical bitcoins with roughly 174 bitcoin in value, and four one-ounce silver-colored bars and one gold-colored coin.