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Two years after James Zhong was apprehended for stealing 50,000 bitcoins (BTC) from the darkish internet market Silk Highway in 2012, tales of occasions that led to his arrest have emerged.
Based on a CNBC report, Zhong was a pc skilled who lived an expensive life. He drove costly automobiles, together with a Tesla, partied lots, stayed at fancy motels, shopped at luxurious shops, and lived in a modest off-campus bungalow with an unusually tight dwelling surveillance system. He additionally purchased a second dwelling – a lake home with a dock in Gainesville, Georgia, stocked with boats, jet skis, a stripper pole, and plenty of liquor.
The Break-in and Police Name
On March 13, 2019, Zhong known as the Athens-Clarke County Police Division in a panic assault; somebody had damaged into his dwelling and stolen 150 BTC price tons of of hundreds of {dollars}.
Zhong’s grievance was the police division’s first crypto case, and as they have been unfamiliar with the burgeoning sector, the case made no progress, and no suspect was arrested. In consequence, Zhong recruited the providers of native personal investigator Robin Martinelli, who suspected via investigations that considered one of her consumer’s pals was accountable for the theft.
Nevertheless, the then-28-year-old Silk Highway scammer refused to consider Martinelli’s theories as he discovered it arduous to simply accept that somebody near him may have betrayed him.
Whereas Zhong tried to unravel his theft case, a gaggle of brokers from the Inside Income Service Prison Investigation unit tried to unravel the Silk Highway 2012 theft. They’d waited for years because the offender of the crime transferred funds from account to account, utilizing crypto mixers to obscure the route of the property.
Sadly for Zhong, he made a mistake whereas transferring $800 to considered one of his accounts inside that interval. This was noticed by blockchain analytics firm Chainalysis, which traced the funds to a crypto change with know-your-customer guidelines and found that the account was registered in Zhong’s identify. This was six months after Zhong known as the police to report his BTC theft.
The Arrest
For additional investigation, the IRS requested the Athens-Clarke County Police Division for assist. The businesses joined forces and dispatched three investigators who approached Zhong on the premise that they have been investigating the crime he known as about. Nevertheless, they have been checking him out for the theft of the Silk Highway bitcoins.
Zhong opened as much as them and gave them a tour of his condo whereas they looked for hidden compartments. He finally opened his laptop computer, the place they noticed $60 million to $70 million price of BTC, which they thought-about sufficient proof that he was behind the 2012 theft.
When requested, Zhong claimed he had gotten into BTC early and mined hundreds of the crypto asset. In reality, he was discovered to be amongst a gaggle of early coders who engaged with the Bitcoin expertise.
In any case was stated and completed, the investigators confirmed up at Zhong’s home days later with a crew of officers who raided the condo trying to find proof. With the assistance of canine educated to smell out electronics, the officers discovered a popcorn tin that hid a pc holding thousands and thousands of {dollars} price of BTC, money, valuable metals, and bodily bitcoins.
Zhong was whisked away, convicted, and is at the moment serving a one-year sentence on the federal jail camp in Montgomery, Alabama. US authorities are selling the stolen property as their house owners have refused to assert them.
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