U.S. Department Of Justice Seizes $3.36 Billions Worth of Bitcoin

U.S. Department Of Justice Seizes $3.36 Billions Worth of Bitcoin

The U.S Department Of Justice (DOJ) has announced today, Nov. 7, that it has confiscated a little over $3.36 billion worth of bitcoin. It so happens that the tainted bitcoins were affiliated with the darknet marketplace Silk Road. James Zhong, 32, of Gainesville, Georgia, and Athens, Georgia, admitted to a one-count charge of committing a wire fraud of over 50000 bitcoins from the illicit marketplace and could face a jail term of 20 years.

DOJ Confiscates Tainted BTC

In September 2012, Zhong allegedly used a trading scheme to defraud Silk Road of its Bitcoin without listing or purchasing any real items from its marketplace.

Silk Road was quite the popular “darknet” marketplace between 2011 to 2013, used by drug cartels to carry out illicit deals and buy goods and services.  It was not until a groundbreaking prosecution by the law enforcement agency that we saw the conviction of the Silk Road founder, Ross Ulbricht, which led to him being sentenced to a lifetime in jail by a unanimous decision from the jury.

This is the DOJ’s second-largest Bitcoin seizure in history, trailing only the seizure of 94,000 Bitcoin stolen in the 2016 Bitfinex hack. The coins were worth approximately $3.6 billion when they were reclaimed. Zhong could be facing 20 years behind bars.

Hacks Still Continue To Ravage The Crypto Space

Though the Silk Road hack happened about 10 years ago, we still continue to see hacks in the crypto space. This confiscation by the DOJ comes after the largest seizure of 94000 stolen in the Btfinex hacks. According to Chainalysis, October 2022 is by far the biggest month of hacks in the biggest year of hacks. The analysis firm stated that “at this rate”, 2022 might surpass 2021 as the biggest hack on record. The most persistent hacks this year have been on cross-chain bridges.

“With three bridges breached this month and nearly $600 million stolen, cross-chain bridges remain a major target for hackers, accounting for 82% of losses this month and 64% of losses overall,” Chainalysis says.


Bottom Line

The SEC and other agencies in the United States are seriously clamping down on any shady involvements in the crypto industry to mitigate the loss of assets. Though we still continue to see an uptick in the number of hacks, it is believed that the crypto industry will evolve over time and, in turn, become impervious to hacks.