Important crypto news regarding the most famous currency of all, Bitcoin.
According to reports, it appears that the US government plans to sell more than $1.17 billion in Bitcoin (BTC) seized as part of the Silk Road illicit market case.
Summary
Latest crypto news about Bitcoin and the Silk Road case
As anticipated above, the US government will sell more than $1.17 billion in Bitcoin (BTC), which had been seized as part of the Silk Road illicit market case.
According to a new federal court filing, the government is planning to sell the rest of the approximately 51,351 Bitcoin seized from hacker James Zhong, who was accused by authorities of stealing virtual assets from Silk Road in 2012.
According to the filing, the government has already sold about 9,861 BTC of the total amount seized for more than $215 million on 14 March, leaving about 41,491 BTC. At Bitcoin’s current value of $28,332, the sale of the remaining BTC would be worth $1.175 billion.
The filing was located in the US District Court for the Southern District of New York and concerns Zhong’s conviction. The government says it will not sell the remaining BTC until after Zhong’s sentencing, scheduled for 14 April.
Statements regarding the latest crypto news about Bitcoin and Ulbricht
With regard to the latest developments following the Bitcoin and Ulbricht case, the following is stated:
“As for the 51,351.89785803 Bitcoins confiscated in the Ulbricht case before Judge Schofield, the government has started liquidating (selling). On March 14, 2023, the government sold 9,861.1707894 BTC (out of 51,351.89785803 BTC) for a total of $215,738,154.98. After $215,738.15 in transaction fees, the net proceeds for the government were $215,522,416.83.”
In addition, of the Bitcoin confiscated in the Ulbricht case, about 41,490.72 BTC remain, which the government says should be liquidated in four more batches later this year.
However, the government has learned from IRS Criminal Investigation – Asset Recovery & Investigative Services that the second round of liquidation will not be sold before Zhong’s sentencing date.
Silk Road was a former darknet black market operating from about 2011 to 2013. The website has often been associated with illegal activities such as money laundering and drug trafficking.
Zhong was accused of tricking the website’s payment processing system by using fake accounts and quick deposits and then withdrawals of larger amounts to steal Bitcoin.
Federal authorities eventually traced the stolen Bitcoin to Zhong’s home in Georgia, seizing it in November 2021, when it was worth $3.6 billion. Zhong pleaded guilty to wire fraud in connection with the theft.
The seizure of BTC from the Silk Road hacker
In November 2022, the US Attorney for the Southern District of New York announced the largest cryptocurrency seizure in history and the second largest financial seizure ever.
As written above, according to a US Department of Justice announcement, James Zhong had illegally acquired more than 50,000 Bitcoin (BTC) from the dark web market over a decade ago.
Indeed, US Attorney Damian Williams had confirmed the wire fraud implemented by James Zhong. Specifically, Williams had stated the following:
“For nearly ten years, the whereabouts of this massive missing piece of Bitcoin had become a mystery worth over $3.3 billion. Thanks to state-of-the-art cryptocurrency tracking and good old fashioned police work, law enforcement located and recovered this impressive cache of the proceeds of crime. This case proves that we won’t stop following money, however cleverly hidden, even down to a circuit board in the bottom of a popcorn box.”
According to the statement, Zhong created fraudulent accounts on Silk Road to defraud the BTC website by depositing a small amount of coins and then immediately withdrawing a much larger amount.
For example, on 19 September 2012, Zhong deposited 500 Bitcoin into a Silk Road wallet. Less than five seconds after making the initial deposit, Zhong made five withdrawals of 500 Bitcoin in quick succession, resulting in a net gain of 2,000 Bitcoin.
Collectively, in the last quarter of 2017, Zhong thus owned about 53,500 Bitcoin of total crime proceeds.
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