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US DOJ catches hacker who stole 50,000 BTC from Silk Road

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  • 2 min read

The United States Department of Justice has officially announced the conviction of James Zhong, a hacker who stole more than 50,000 Bitcoins from the Silk Road, an illicit marketplace on the Dark Web. 

Zhong exploited a withdrawal processing flaw in the marketplace that allowed him to withdraw more Bitcoin than he had actually deposited on the marketplace. The bug consisted of a flaw in the marketplace’s transaction system that allowed a user to withdraw their escrow multiple times. 

He funded nine different accounts with an initial deposit of 200 to 2,000 Bitcoin and then triggered 140 withdrawals successively to get more of the cryptocurrency back than he had actually deposited back in September 2012, as per his own confession. 

The 50,000 Bitcoin received from this was then sent to various wallets to hide the money’s trail. Zhong received another 50,000 Bitcoin cash in 2017 following Bitcoin’s split into Bitcoin Cash and Bitcoin SV. 

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Overall, the Department of Justice seized the following items from Zhong’s residence on November 9, 2021:

  • 50,491 Bitcoin hidden in an underground safe on a single-board computer further hidden under blankets in a popcorn can inside a bathroom closet. 
  • 11.1160005300044 additional Bitcoin
  • $661,900 cash in US currency
  • 25 Casascius coins (physical Bitcoin) valued at 174 Bitcoin
  • Four 1-ounce silver bars
  • Four 10-ounce silver bars
  • Three 1-ounce gold bars
  • One gold coin

Additionally, Zhong voluntarily forfeited 23.7112850, 115.02532155 and 4.57427222 Bitcoin to the department on April 27, April 28 and June 8 2022 respectively. His 80% interest in RE&D Investments, a Memphis-based company with substantial real estate holdings was also seized. 

Overall, on Monday the DOJ put the total count of forfeiture at approximately 51,351.89785803 Bitcoin traceable to Silk Road, valued at approximately $3,388,817,011.90 at the time of seizure.

As for Zhong, he has pled guilty to one count of wire fraud carrying a maximum sentence of 20 years in prison. He’s due to be sentenced by a judge on February 22, 2023. 

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Yadullah Abidi

Yadullah Abidi

Yadullah is a Computer Science graduate who writes/edits/shoots/codes all things cybersecurity, gaming, and tech hardware. When he's not, he streams himself racing virtual cars. He's been writing and reporting on tech and cybersecurity with websites like Candid.Technology and MakeUseOf since 2018. You can contact him here: