Back in November 2022, the United States Department of Justice arrested James Zhong, who at the time was a billionaire holding 50,000 bitcoins which at the time of the seizure was worth over $3.36 billion dollars. According to U.S. Attorney Damian Williams, he said: “James Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from Silk Road. For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery. Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds. This case shows that we won’t stop following the money, no matter how expertly hidden, even to a circuit board in the bottom of a popcorn tin.”
New Details Have Emerged About James Zhong
In a new video posted yesterday, crypto reporter and vlogger Hayden Otto figured out just who Zhong is, his background, and how he was living after stealing over $3 billion from Ross Ulbricht and the Silk Road. You have to watch the video for all the details but it’s quite a bit of interesting history about this person when it comes to Silk Road and Bitcoin history.
Some key points from the video:
- May 2011: James founded Bulldog Computer Services.
- Aug 2011: Created BitcoinTalk profile.
- Sept 2011: Bought BTC for the first time.
- Sept 2012: Exploited Silk Road to steal Bitcoins.
- July 2013: Zhong purchased his home with stolen funds in Georgia.
- Jan 2014: Zhong started his own LLC to funnel funds and provide cover.
- Jan 2014: BitcoinTalk user “Loaded” connected to James Zhong, revealing they are the same person.
- April 2017: Bitcoin wallets connected to Loaded reveal they were traced back to Silk Road. The “Loaded” then goes inactive.
- Mar 2019: Zhong house burglarized, revealing he had $400K in cash stolen, which raised a red flag with the police and Feds.
- Nov 2021: Zhong raided, arrested, and bitcoins seized.
What was the Silk Road marketplace?
The Silk Road was an online marketplace that allowed people to buy and sell drugs, weapons, and other contraband. It was founded in 2011 by a young man named Ross Ulbricht, who wanted to build a platform where people could exchange goods anonymously. But by 2013, Ulbricht had been arrested by the FBI on suspicion of being the Silk Road’s creator. He was convicted of operating an illegal money-laundering scheme and sentenced to life in prison.
Ross Ulbricht created the marketplace in 2011, when he was 27 years old. As a libertarian who believed in free markets and individual liberty, he wanted to create a site where people could buy and sell goods and services without interference from government or law enforcement agencies. The Silk Road was established on an anonymous network called Tor (short for “The Onion Router”). This made it difficult for police or anyone else who might want to shut down the site from finding its servers; even if authorities managed to trace traffic back to those servers, they wouldn’t know who owned them unless Ulbricht gave himself away somehow through his communications with them.
For several years after its launch, The Silk Road operated with few problems from either side of the law–but eventually someone started leaking information about buyers’ names and addresses out onto public forums without permission from their users first–and then everything went downhill fast. The FBI shut down the site in 2013, charging Ulbricht with being its creator. Ulbricht was tried and convicted of multiple felonies, including narcotics trafficking, computer hacking and money laundering. He was sentenced to life in prison without parole.