Over $3.36 billion worth of Bitcoin (BTC) has been confiscated by the United States (US) Department of Justice (DOF). The assets had been missing for over ten years when a hacker compromised the Silk-Road platform. The case has been under the jurisdiction of the US DOF since 2020.
The confiscation was termed “Historic Conviction” by some Crypto analysts, Decrypt reported. It is the most extensive cryptocurrency confiscation since the inception of blockchain and its technologies. Damian Williams and Tyler Hatcher presided over the legal pronouncement passed against the hacker.
What Led to the Confiscation?
James Zhong, a cyberpunk who hijacked 51,680.3247 Bitcoins from the Silk-Road Platform, has been prosecuted today. He admitted to being responsible for the wire fraud committed via a dark web platform. He succeeded in carting away some BTCs and ETH, but they were all stored in a secret wallet.
US Attorney Damian Williams asserted, “From 2012, the destination of these bulks of missing BTC was unknown. The value of the assets has increased to 3.36 billion dollars. The BTC Owners are unknown; therefore, the state confiscates it till further notice”.
Silk-Road served as a platform where customers acquired drugs unidentified from 2011 to 2013. Also, the platform aided the distribution of illegal products, materials, and ammunition in the United States. The firm’s CEO, Ross Ulbricht, was charged and convicted of life imprisonment in 2015.
How The United States DOF Discovered Silk-Road Fraudulent Activities
The US DOJ used technological tools to discover and retrieve this colossal stash of assets. The agency also incorporated cutting-edge crypto tools to trace previous transactions on Silk-Road wallets address. Williams asserted, “The case demonstrates that the US DOJ can continue to pursue the retrieval of legal tenders.”
Investigation revealed that Zhong perpetrated a thriving wire fraud operation in 2012. He created over nine bogus accounts, coincidentally initiating the Silk-Road withdrawal function. He processed over 140 transactions continuously, but the BTC was transferred to numerous cold wallets.
In addition, DOJ discovered that the hacker utilized Silk-Road to deposit 200-2000 BTC anywhere. However, he hoped to hijack more BTC through sequences of withdrawals from the system. The US IRS-CI seized over 50,491 BTCs on November 9, 2021.
Zhong admitted to the wire fraud charge, which attracted 20 years of imprisonment and other punishments. In addition, the 51,680.33 BTC discovered has been confiscated by the United States DOJ.