Silk Road Hacker Who Stole Over $3B In Bitcoin Gets Court Verdict After 11 Years

Eleven years after committing the crime and more than two years after authorities seized over 51,000 stolen Bitcoin, the U.S. Department of Justice (DOJ) announced the sentencing of James Zhong, the alleged Silk Road hacker who once possessed around $3 billion worth of crypto assets.

In the court verdict announced by United States District Judge Paul G. Gardephe, Zhong, the 32-year-old alleged hacker of the internet marketplace Silk Road, was sentenced to "one year and one day in prison for committing wire fraud in September 2012 when he unlawfully obtained approximately 50,000 Bitcoin from the Silk Road," the DOJ's press release read.

"The Government has obtained final orders of forfeiture for, among other items, 51,680.32473733 Bitcoin, valued at over $3.4 billion at the time of seizure and over $1.57 billion today," according to the announcement made last week.

Zhong allegedly stole the money from Silk Road by creating several fraudulent accounts that hid his identity. He then supposedly used these accounts to deceive the dark web marketplace's withdrawal system into releasing the Bitcoin to him when he triggered multiple withdrawal requests in rapid-fire succession.

With the help of a mixer, a foreign crypto exchange platform and an "impressive array of technological tools to frustrate tracing efforts," Zhong moved the stolen Bitcoin into several accounts in an attempt to avoid detection.

A decade later, authorities got a search warrant for the hacker's house in Georgia where they seized 50,491 Bitcoin, $661,900 in cash, 25 Casascius coins (physical BTC coins), which contained a private key to a Bitcoin wallet and precious metals like silver bars and gold coins. The Bitcoin were recovered in a "single board computer," in an underground floor safe and in a Cheetos popcorn tin can.

Zhong also voluntarily surrendered several Bitcoin, which according to the DOJ reached a total of 1,004 BTC since March 2022.

"Thanks to the relentless and skillful efforts of law enforcement in following the money, the federal government uncovered Zhong's scheme and obtained final orders of forfeiture for over 51,680 Bitcoin," said Damian Williams, the United States Attorney for the Southern District of New York.

"Cyber-criminals should heed this message: we will follow the money and hold you accountable, no matter how sophisticated your scheme and no matter how long it takes," the government lawyer added.

Zhong had pleaded guilty to one count of wire fraud before Judge Gardephe in the past.

In March, on-chain analytics firm Peckshield discovered that more than $1 billion worth of Bitcoin seized from the Silk Road heist was moved from U.S. government-linked wallets to several new wallet addresses, including the U.S.-based exchange Coinbase.