"It took a long time to catch this man, but he stole a lot of BTC."
James “Jimmy” Zhong, a 28-year-old University of Georgia computer science graduate has committed the largest Bitcoin (BTC) theft in history of over 50,000 BTC worth $3.4 billion in 2023 from the famous dark web market Silk Road.
While exploiting Silk Road between 2012 and 2014, Zhong who drained the site's hot wallet of their huge BTC reserves of over 51,680 BTC has admitted to discovering it and then exploiting it after buying cocaine.
According to Vinny D'Agostino, the FBI trial agent for the Silk Road Case, founder Ross Ulbricht knew his security skills were weak, so he wanted to cover any gaps in the aftermath of the loss of 50,000 BTC.
Despite spending lavishly and having run-ins with the law including driving under the influence (DUI) and drug possession charges, Zhong remained undetected for almost a decade but his fortunes were ruined when two things happened in 2019.
First, someone who broke into his home stole $400,000 and BTC in March 2019 then second Zhong made a mistake by transferring a small portion of the BTC he stole to a Know Your Customer (KYC) compliant exchange.
The subsequent investigation was a collaboration between IRS agents and the local Athens police who had previously believed Zhong's story as a smart BTC investor, however now they launched an undercover operation to uncover the truth.
The operation lasted until a search of Zhong's property in November 2019 which revealed that most of the stolen Silk Road BTC had been hidden in popcorn cans.
The streak, Zhong, who was arrested, pleaded guilty to one count of transaction fraud and in 2022 was sentenced to just 336 days in jail after his lawyer successfully argued that it was a victimless crime for stealing from a criminal enterprise.
