Man Sentenced to Prison for Stealing Bitcoin from Silk Road

The United States Attorney’s Office for the Southern District of New York has announced the sentencing of James Zhong, an individual who pleaded guilty to wire fraud charges connected to unlawfully obtained Bitcoin from the Silk Road marketplace in 2012. Zhong was sentenced to one year and one day in prison for charges related to executing a scheme to steal more than 51,680 Bitcoin.

According to U.S. Attorney Damian Williams, 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. Zhong managed to conceal his crime for roughly 10 years before facing charges, but U.S. authorities were able to seize the Bitcoin holdings from his home in the state of Georgia in November 2021. The bulk of the crypto was found in a floor safe and a computer concealed in a popcorn tin. The coins were worth roughly $3.4 billion at the time.

The Silk Road marketplace, defunct for roughly 10 years, allowed users to buy and sell illicit goods such as weapons and stolen credit card information, drawing the attention of U.S. authorities. The creator of the platform, Ross Ulbricht, was arrested in 2013 and is currently serving two life sentences without the possibility of parole.

Cybercrime has become a growing problem in recent years, with the rise of digital currencies such as Bitcoin providing new opportunities for criminals to commit fraud and theft. Silk Road was one of the most high-profile cases of illegal activity using Bitcoin, and the U.S. government has made it clear that it will not tolerate such crimes.

The sentencing of James Zhong sends a strong message to cybercriminals that they will not be able to hide from the law forever. As technology continues to advance, law enforcement agencies are becoming increasingly sophisticated in their methods for tracking down and prosecuting those who commit cybercrime.

However, the case also highlights the challenges of dealing with digital currencies, which can be difficult to trace and recover once they have been stolen. The seizure of Zhong’s Bitcoin holdings is a rare example of a successful recovery of stolen cryptocurrency, and it remains to be seen whether similar cases will be as successful in the future.

In the meantime, the U.S. government is likely to continue to pursue cybercriminals who use digital currencies to commit fraud and theft. The case of James Zhong is a reminder that the law is catching up with those who seek to exploit new technologies for criminal purposes.


Tagged : / / / / /

US Government to Sell Seized Silk Road Bitcoin

The United States government has announced plans to sell more than 41,000 Bitcoin that were seized as part of the case against Silk Road creator Ross Ulbricht. The news comes from a filing submitted to the U.S. District Court for the Southern District of New York on March 31, which detailed the ongoing proceedings against James Zhong.

The U.S. government authorities have already begun liquidating roughly 51,352 Bitcoin (BTC) seized in the Ulbricht case. The filing reported that officials sold around 9,861 BTC for over $215 million on March 14, which leaves approximately 41,491 BTC remaining.

According to the court filing, “The Government understands [the Bitcoin] is expected to be liquidated in four more batches over the course of this calendar year.” It remains to be seen how the Bitcoin market will react to such a large influx of cryptocurrency hitting the market, but it is likely that this news will generate significant interest among investors.

Silk Road was an online black market that allowed users to purchase illegal goods and services using Bitcoin. The website was shut down by the FBI in 2013, and its creator, Ross Ulbricht, was arrested and sentenced to life in prison without parole in 2015.

The U.S. government’s seizure of the Bitcoin associated with Silk Road was one of the largest cryptocurrency seizures in history. At the time, the Bitcoin was worth roughly $1 billion, although its value has since increased significantly.

This announcement from the U.S. government is just the latest in a series of moves to regulate the cryptocurrency industry. Regulators around the world are increasingly concerned about the potential for cryptocurrencies to be used in illegal activities such as money laundering and terrorism financing. As a result, we can expect to see further scrutiny of the industry in the years ahead.

In conclusion, the U.S. government’s decision to liquidate the seized Silk Road Bitcoin is likely to have a significant impact on the cryptocurrency market. Investors will be closely watching the market to see how it reacts to such a large influx of Bitcoin, and regulators will be keen to ensure that the cryptocurrency industry is not used for illegal activities. We will continue to monitor this developing story and provide updates as they become available.


Tagged : / / / / /

$1 Billion Worth of Bitcoin Moved from US Law Enforcement Seized Wallets

In March 2023, over 50,000 Bitcoin (BTC) worth $1 billion were moved from multiple wallets connected to US law enforcement seizures. The transfers included three transactions, with the majority being internal transfers. However, about 9,861 BTC was sent to Coinbase, with the remaining BTC consolidated into two wallet addresses.

The BTC was seized by US agencies from the Silk Road marketplace in November 2021. The Silk Road was an online black market and one of the first darknet markets to accept Bitcoin payments, helping to popularize crypto use. The marketplace was launched in 2011 by its American founder, Ross Ulbricht, under the pseudonym “Dread Pirate Roberts.” U.S. law enforcement agencies confiscated multiple items from Ulbricht, including hoards of BTC, which have been auctioned from time to time.

In 2014, popular Bitcoin proponent Tim Draper bought nearly 30,000 BTC in one of these auctions. Another auction for 50,000 BTC was held in October 2015, where the US Marshals Service auctioned 21 blocks of 2,000 BTC and one block of 2,341 in an online auction.

While only a small portion of the 50,000 BTC was sent to Coinbase, the movement of billions worth of BTC from US enforcement agency-linked wallets evoked wild reactions and even wilder theories from Twitter users. Some pointed out that if US agencies decided to sell their Silk Road Bitcoin, it would put significant selling pressure on the market. At the same time, a few others questioned the timing of the sale.

The movement of such a large amount of Bitcoin highlights the growing adoption and usage of cryptocurrencies in the financial industry, as well as the potential for misuse and criminal activity. Despite this, the underlying technology of cryptocurrencies, blockchain, offers a transparent and secure way to track transactions and prevent fraud.


Tagged : / / / / /

Silk Road’s Ross Ulbricht Apologizes to the Public on the Eve of His 10th Year in Prison

Silk Road founder Ross Ulbricht who is currently serving a double sentence in prison for his role in running a distribution network that allows buying and selling hard drugs through the use of Bitcoin made a statement on Friday describing his emotions on the eve of his 10th year in prison.


According to a Twitter post via his account run by a loved one, Ross shared that he regrets his actions as the mastermind of Silk Road. He admitted to having caused a lot of pain and ruined his life when he looked back at his many errors.


Ulbricht was arrested and sentenced to life in prison on seven charges in 2013; distribution of narcotics, distribution of narcotics over the Internet, conspiracy to distribute narcotics, furthering a  criminal enterprise, conspiracy to hack a computer, conspiracy to smuggle using false identification, and money laundering.


Ulbricht received proceeds through Bitcoin from about 1,229,465 transactions over the two-year operation from his ‘darknet’ website as stated by court documents. 


The Silk Road founder is still very much present in the crypto space despite his sentence. He introduced a decentralized social protocol (DSP) in 2021 stating how it will operate and the problems to solve.


Support for Ulbricht


Ulbricht has continued to receive support from crypto enthusiasts around the globe. Most of his supporters feel his sentence is unfair and therefore deserves a second chance. 


The ‘ClemencyForRoss’ support group on Twitter made a Twitter post on Friday stating that Ulbricht doesn’t deserve to die in prison because he is a first-time offender, his charges were non-violent and he has shown an exemplary life by giving help to others in prison.


According to a news report by Blockchain.News, a billboard in Times Square was rented for several months in 2020 by Ulbricht’s supporters to campaign for his release. 


Some of Ulbricht’s supporters believe that he only created a safe space for conducting business and the government is only after him because they didn’t get a share from his proceeds.

Image source: Shutterstock


Tagged : / / /

Ross Ulbricht’s debut NFT sold for $6.2M at auction

After announcing the launch of his “Genesis Collection” NFT auction, Ross Ulbricht, alleged founder of dark web marketplace Silk Road, has sold his first NFT for $6.2 million or 1,446 ETH at auction.

The auction kicked off at Art Basel Miami via the SuperRare platform. FreeRossDAO, the decentralized autonomous organization set up to help free Ulbricht from imprisonment, placed the winning bid. The FreeRossDAO website states that the DAO aims to “advance prison reform” and to “share Ross’s work with the world and give everyone a unique opportunity to own a piece of it.”

Ross Ulbricht’s “Perspective” $6.2M drawing from the “Ross Ulbricht Genesis Collection” of NFTs.

The first NFT sold, called “Perspective,” was drawn in prison using graphite pencil and is part of a 10-piece collection of writings and artworks made by Ulbrict throughout his life. The collection also includes an animated video made by audiovisual artist Levitate and with a voiceover by Ulbricht about his time in prison.

All proceeds raised from the “Genesis Collection” will go towards the Art4Giving fund, a donor-advised trust created by the FreeRossDao as a legal entity to fund new legal proceedings and raise awareness, according to the organization.

FreeRossDAO plans to fractionalize the NFT into ROSS governance tokens and distribute them pro-rata in return for donor contributions. ROSS holders will be able to vote on proposals and participate in the guidance of FreeRossDAO.

Ulbricht’s NFT ranks among the largest sales within the last 7 days, as recorded by NonFungible.