On October 17, America's basic cable business news channel and website CNBC posted a short documentary about a case against Jimmy Zhong, the hacker who stole 50,000 BTC from Silk Road in 2012.
The film is a half-hour story about how the lucky break helped IRS Criminal Investigation (IRS-CI) find the attacker several years later. Without much spoilering, let's talk about the film and the events it covers.
By the way, in our recent selection of 3 books about crypto entrepreneurs, there is one about the creator of Silk Road, Ross Ulbricht. We recommend you to read it!
What is Jimmy Zhong famous for
In September, 2012, Jimmy Zhong managed to steal over 50,000 Bitcoins from the online black market Silk Road due to a bug in its withdrawal system. According to the hacker's lawyers, Silk Road's creator, Ross Ulbricht, did not demand the coins back. Instead, he sent more BTC to Zhong for describing the vulnerability on the site.
Then, Bitcoin’s price stood at about $12, so, at the time of the theft, the stolen funds were equivalent to around $600,000. After the Bitcoin hard fork in 2017, Zhong exchanged 50,000 BCH for 3,500 BTC.
This amount of money has completely changed the hacker's life. Zhong started to lead a luxurious life: staying in the best hotels, travelling on private jets and yachts, and spending money on pretty much everything he wanted. Before that, Zhong had been just an ordinary 22-year-old guy living in a hostel. He carefully hid his funds and was very good at it. However, in 2019, law enforcement agencies have hit the trail.
Catchy details of Jimmy Zhong’s arrest
On November 9, 2021, the stolen Bitcoins were finally seized. We will not expand on how exactly IRS-CI figured out the criminal — this is the most interesting part of the documentary, so you better see it for yourself.
However, there are some details of the arrest described in the US Department of Justice press release:
📈 On the day the stolen BTC were seized, their total value was estimated at over $3.3 billion;
🔎 Some of the coins were stored "on a single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet". The rest were "in an underground floor safe";
💰 In addition, the officials seized more than $600,000 in cash, gold and silver bars.
Jimmy Zhong could have received up to 20 years in prison. Nevertheless, at the final hearing, which took place on April 14, 2023, he was sentenced to 1 year and 1 day. The reduced decision was influenced by his young age, autism, and cooperating with the investigation.
The CNBC’s film includes interviews with IRS-CI representatives who were involved in the arrest and talks with Zhong lawyer. Watch it to get the full picture.
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