U.S. government seizes $3.4 billion worth of bitcoins from Silk Road crook

The U.S. Department of Justice announced Monday that law enforcement seized $3.36 billion in bitcoins from a man who had “illegally obtained“More than 50,000 bitcoins on the darkweb Silk Road market more than ten years ago.

The U.S. Attorney for the Southern District of New York said James Zhong, of Gainesville, Georgia, pleaded guilty on Nov. 4 to committing wire fraud in September 2012. The charge carries a maximum sentence of 20 years in prison.

The plea came nearly a year after law enforcement seized 50,676.17851897 bitcoins, then valued at more than $3.36 billion, from James Zhong’s home, according to the release. Authorities found the bitcoins in an underground safe and on a single-board computer hidden under blankets in a popcorn box in a bathroom closet.

Law enforcement also recovered $661,900 in cash, 25 Casascius bitcoin coins (worth about 174 bitcoins), an additional 11.116 bitcoins and a handful of silver and gold bars.

The whereabouts of this huge amount of bitcoins had been a mystery for nearly 10 years, U.S. Attorney Damian Williams said in the statement.

At the time, it was the largest crypto-currency seizure in the history of the U.S. Department of Justice, and it remains the department’s second-largest financial seizure today, the release said.

Silk Road was an online black market that was launched in 2011 by the “Dread Pirate Roberts” then anonymous (later discovered as Ross Ulbricht). He was notorious for his money laundering activities and for buying and selling illegal drugs with bitcoins. Within two years, Silk Road was shut down by the U.S. government, and in 2015, Ulbricht was unanimously convicted by a jury and sentenced to life in prison.

“This case shows that we won’t stop following the money, no matter how cleverly hidden, even to a circuit board at the bottom of a popcorn box“, said Mr. Williams.