The U.S. Division of Justice introduced Monday that it seized about $3.36 billion in stolen bitcoin throughout a beforehand unannounced 2021 raid on the residence of James Zhong.

Zhong pleaded responsible Friday to at least one rely of wire fraud, which carries a most sentence of 20 years in jail.

U.S. authorities seized about 50,676 bitcoin, then valued at over $3.36 billion, from Zhong throughout a search of his home in Gainesville, Georgia, on Nov. 9, 2021, the DOJ mentioned. It’s the DOJ’s second-largest monetary seizure to this point, following its seizure of $3.6 billion in allegedly stolen cryptocurrency linked to the 2016 hack of the crypto alternate Bitfinex, which the DOJ introduced in February.

In keeping with authorities, Zhong stole bitcoin from the unlawful Silk Street market, a darkish net discussion board on which medicine and different illicit merchandise have been purchased and offered with cryptocurrency. Silk Street was launched in 2011, however the Federal Bureau of Investigation shut it down in 2013. Its founder, Ross William Ulbricht, is now serving a life sentence in jail.

“For nearly ten years, the whereabouts of this huge chunk of lacking Bitcoin had ballooned into an over $3.3 billion thriller,” U.S. Legal professional Damian Williams mentioned in a press launch.

In keeping with the Southern District of New York, Zhong took benefit of {the marketplace}’s vulnerabilities to execute the hack.

Particular Agent in Cost Tyler Hatcher, of the Inner Income Service – Prison Investigation, mentioned Zhong used a “subtle scheme” to steal the bitcoin from Silk Street. In keeping with the press launch, in September 2012, Zhong created 9 fraudulent accounts on Silk Street, funding every with between 200 and a pair of,000 bitcoin. He then triggered over 140 transactions in speedy succession, which tricked {the marketplace}’s withdrawal-processing system to launch roughly 50,000 bitcoin into his accounts. Zhong then transferred the bitcoin into a wide range of pockets addresses all beneath his management.

Public information present Zhong was the president and CEO of a self-created firm, JZ Capital LLC, which he registered in Georgia in 2014. In keeping with his LinkedIn profile, his work there targeted on “investments and enterprise capital.”

His profile additionally states he was a “giant early bitcoin investor with intensive information of its interior workings” and that he had software program improvement expertise in laptop programming languages.

Zhong’s social media profiles embrace footage of him on yachts, in entrance of airplanes, and at high-profile soccer video games.

However some of these hacks did not finish with the Silk Street’s demise. Crypto platforms proceed to be weak to criminals.

In October 2022, Binance, the world’s largest crypto alternate by buying and selling quantity, suffered a $570 million hack. The corporate mentioned a bug in a wise contract enabled hackers to use a cross-chain bridge, BSC Token Hub. Because of this, the hackers withdrew the platform’s native cryptocurrency, known as BNB tokens.

In March 2022, a distinct hacker discovered vulnerabilities within the decentralized finance platform Ronin Community and made off with greater than $600 million — the biggest hack to this point. The personal keys, which function passwords to guard cryptocurrency funds in wallets, have been compromised.

In keeping with a Chainalysis report, $1.9 billion value of cryptocurrency had been stolen in hacks of companies via July 2022, in contrast with just below $1.2 billion on the similar level in 2021.