11 years later, Silk Road BTC hacker faces his sentence

— The individual responsible for defrauding dark web Silk Road was sentenced to a year in prison

— James Zhong, who committed wire fraud, stole at least 50,000 BTC from Silk Road 

On 14 April, the United States Attorney's Office for the Southern District of New York released a press release with regards to the Silk Road debacle of 2012. The press release announced the sentencing of James Zhong for unlawfully obtaining 50,000 Bitcoin [BTC] from the silk road dark web in September 2012.

Deep diving into the specifics

As per U.S. attorney Damian Williams, after committing the wire fraud, Zhong managed to conceal his ways of obtaining BTC. Furthermore, the culprit made the use of a decentralized Bitcoin mixer, an overseas cryptocurrency exchange, and an array of technological tools to make the tracing process extremely difficult.

Williams further added,

"thanks to the relentless and skillful efforts of law enforcement in following the money, the federal government uncovered Zhong’s scheme and obtained final orders of forfeiture for over 51,680 Bitcoin."

Time for a little flashback

In 2012, James Zhong devised a plan to defraud the dark web Silk Road of its money. The plan was created in a manner that conceals the identity of Zhong and triggers a bunch of transactions. Upon putting the plan in action, at least 140 transactions were triggered one after another, thus tricking Silk Road's withdrawal system to release 50,000 BTC.

All the stolen BTC was deposited in Zhong's account. It was then transferred to various addresses that were supposedly under Zhong's control.  Zhong made an initial deposit in BTC and then made a series of withdrawals almost immediately. This enabled him to withdraw a higher amount than he initially deposited.

Additionally, in August 2017, due to the hard fork coin split, traditional BTC and Bitcoin cash came into existence. At the time of the split, any individual with a sizable amount in their wallet would be granted the same tokens on both the chains.

Thus, Zhong, possessed 50,000 Bitcoin Cash [BCH] in addition to the 50,000 Bitcoin that ZHONG unlawfully obtained from Silk Road. All in all, James Zhong possessed 53,500 BTC by the end of 2017.

James Zhong pleaded guilty to the wire fraud charges in November 2022. As of 14 April, he was sentenced for a period of one year and one day in prison.

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