The Department of Justice announced the seizure of 50,680 stolen bitcoins, the second-largest recovery ever. The DOJ recovered the stolen bitcoin from James Zhong after raiding his Florida home in November 2021. When the Feds recovered the bitcoin, it was worth over $3.36 billion but has since dropped to just over $1.04 billion. Zhong has since pleaded guilty to one count of wire fraud, carrying a maximum sentence of 20 years in prison.
Along with the stolen bitcoin, the DOJ found nearly $662,000 in cash and various precious metals. CoinDesk reports that Zhong stole the cryptocurrency in 2012 from a now-defunct illegal darknet marketplace, The Silk Road.
The marketplace, which primarily used bitcoin as payment, collapsed after the arrest of Ross Ulbrich, the black market’s operator. Ulbrich is serving two life sentences plus 40 years, with no chance of parole. Zhong stole the bitcoin in 2012 by using fake accounts to trigger multiple simultaneous transactions.
According to CNBC, Zhong was the president, founder, and CEO of the investment and venture capital firm JZ Capital LLC. In a now-broken link to Zheng’s Facebook profile, CNBC reports he frequently posted pictures from yachts and private airplanes.
Another case for cryptocurrency regulation.
The 50k bitcoin seizure is the latest in a long line of crypto heists. Cointelegraph reports that hackers stole over $2.5 billion in cryptocurrency from cross-chain bridges over the last two years. In addition, the UK’s house of commons recently passed a bill to regulate crypto, which could lead to regulation in the US.
Forbes reports that British lawmakers met with American representatives to discuss global cryptocurrency regulatory laws. Additionally, in September, the White House released guidelines for said cryptocurrency regulation, highlighting crypto fraud as a severe issue. Furthermore, CoinDesk reports digital asset laws are a significant focal point of the midterm elections.