Feds Announce Silk Road Cryptocurrency Haul

[ad_1] <div id="generic-article"> <a target="_blank" href="https://www.govinfosecurity.com/cryptocurrency-fraud-c-574" id="asset_topic_1_1" rel="noopener">Cryptocurrency Fraud</a> , <a target="_blank" href="https://www.govinfosecurity.com/cybercrime-c-416" id="asset_topic_1_2" rel="noopener">Cybercrime</a> , <a target="_blank" href="https://www.govinfosecurity.com/fraud-management-cybercrime-c-409" id="asset_topic_1_3" rel="noopener">Fraud Management & Cybercrime</a>

A Actual Property Developer Stole 50,000 Bitcoins from the Darkish Net Emporium a Decade In the past <a target="_blank" class="author-link" href="https://www.govinfosecurity.com/authors/david-perera-i-5119" rel="noopener">David Perera</a> (<a target="_blank" href="https://www.twitter.com/@daveperera" rel="noopener">@daveperera</a>) • November 7, 2022 <a target="_blank" href="https://www.bankinfosecurity.com/feds-announce-silk-road-cryptocurrency-haul-a-20431#disqus_thread" rel="noopener">

A Georgia property developer who, a decade ago, stole about 50,000 Bitcoin from cybercrime dark web site Silk Road pled guilty Friday to wire fraud, leading federal prosecutors Monday to request the cryptocurrency's formal seizure from convicted Silk Road proprietor Ross Ulbricht, aka the "Dread Pirate Roberts." See Also: <a target="_blank" href="https://www.govinfosecurity.com/webinars/ondemand-api-protection-strategy-protecting-your-apis-w-4323" rel="noopener">OnDemand | API Protection – The Strategy of Protecting Your APIs</a> Court docket filings <a target="_blank" href="https://dd80b675424c132b90b3-e48385e382d2e5d17821a5e1d8e4c86b.ssl.cf1.rackcdn.com/external/ecf-394-5agent-affidavit.pdf" rel="noopener">show</a> James "Jimmy" Zhong, 32, in 2012 exploited a flaw within the Silk Street cryptocurrency pockets triggered by speedy, millisecond withdrawals. He stole about $577,000 price of cryptocurrency, based mostly on a <a target="_blank" href="https://www.statmuse.com/money/ask/price+of+bitcoin+in+2012" rel="noopener">table</a> of historic Bitcoin worth. After splitting up the stolen funds in a bid to obfuscate their origin, Zhong stored the Bitcoin on units saved in an underground ground protected and a "single-board pc" stored inside a popcorn tin in a toilet closet beneath a pile of blankets.  At the very least that is the place an IRS legal agent discovered them throughout a Nov. 9 2021 raid on Zhong's Ganisville, Ga., home that additionally turned up greater than half 1,000,000 {dollars} in money, apparently valuable metals and 25 bodily Bitcoin tokens often known as Casascius cash price roughly 174 Bitcoin. On the time of the federal raid, the recovered stolen cryptocurrency was price $3.36 billion, which the Division of Justice <a target="_blank" href="https://www.justice.gov/usao-sdny/pr/us-attorney-announces-historic-336-billion-cryptocurrency-seizure-and-conviction" rel="noopener">says</a> was then the most important federal seizure of cryptocurrency and stays the second largest monetary seizure, ever. The recovered cryptocurrency is now price roughly $1 billion.  Zhong took a <a target="_blank" href="https://dd80b675424c132b90b3-e48385e382d2e5d17821a5e1d8e4c86b.ssl.cf1.rackcdn.com/external/us-v-zhong-plea-agreement.pdf" rel="noopener">plea deal</a> requiring him to forfeit the stolen bitcoin, the money and the contents of his protected, in addition to his 80 % stake in RE&D improvement, a Memphis, Tenn., actual property concern that is been combating a collectors' lawsuit in federal chapter court docket since September. Zhong faces as much as 20 years in jail after pleading responsible plea to at least one depend of wire fraud. The FBI arrested Ulbricht in 2013 in a San Francisco public library whereas he was logged onto the Silk Street unlawful market emporium from his laptop computer because the system administrator, utilizing his assumed identify of Dread Pirate Roberts. Since founding the web site in 2011, Ulbricht paid roughly $650,000 in murder-for-hire schemes, though not one of the 5 meant victims really died in consequence. After his arrest, Ulbricht turned down a plea sentence provide of a minimal 10 yr sentence. Following a jury path leading to a seven felony conviction, Ulbricht is now serving a double life sentence with out the potential for parole in a high-security jail in Tucson, Ariz. A federal choose in June <a target="_blank" href="https://dd80b675424c132b90b3-e48385e382d2e5d17821a5e1d8e4c86b.ssl.cf1.rackcdn.com/external/sdny-1468-orderjune92022.pdf" rel="noopener">turned down</a> Ulbricht's try and vacate the sentence on constitutional grounds.  Federal prosecutors a standing forfeiture order in opposition to Ulbricht means the cryptocurrency recovered from Zhong is now federal property.  Zhong was capable of steal the Bitcoin after discovering that he might set off Silk Street's cost processing system into paying out extra quantities by creating an account after which making withdrawals throughout the similar second. That means a deposit of 500 Bitcoin might lead to a 2500 Bitcoin haul.  Over the course of some days, he created about 9 consumer accounts and made 140 transactions.  U.S. Lawyer Damian Williams for the Southern District of New York attributed Zhong's seize to "state-of-the-art cryptocurrency tracing and good old style police work."  A federal choose launch Zhong Friday on bail of $310,000.

</div><script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> [ad_2] <a href="https://news.google.com/__i/rss/rd/articles/CBMiU2h0dHBzOi8vd3d3LmdvdmluZm9zZWN1cml0eS5jb20vZmVkcy1hbm5vdW5jZS1zaWxrLXJvYWQtY3J5cHRvY3VycmVuY3ktaGF1bC1hLTIwNDMx0gEA?oc=5">Source link </a>