The US government announced the conviction of the notorious bitcoin hacker known as James Zhong earlier this week. The accused is known for stealing about 50,000 bitcoins from the Silk Road dark web marketplace.
Earlier this month, Zhong pled guilty to money laundering crimes that exploited a withdrawal processing vulnerability that enabled him to get more Bitcoins than he initially deposited on the underground marketplace.
According to the Department of Justice, the stolen 50,000 bitcoins are equivalent to more than $3 billion. Moreover, the US government revealed that James Zhong used to be a member of the sketchy marketplace called Silk Road, which is now an obsolete black market operated from 2011 to 2013.
The Bitcoin hacker confessed that he stole more than 50,000 bitcoins.
As the Bitcoin hacker confessed last September, he revealed that he could exploit a flaw in the market’s transaction system to steal more than 50,000 bitcoins from Silk Road.
Moreover, the convicted individual funded nine accounts with an initial deposit of 200 to 2,000 bitcoins that triggered over 140 withdrawal transactions in rapid succession. This bitcoin hacker abused a lag in the market’s transaction system that could enable an individual to withdraw numerous times.
This method allowed Zhong to deceive the system into releasing many bitcoins, which he then transferred to wallets to make the money tracing challenging for crypto tracers.
About five years ago, Zhong received 50,000 Bitcoin cash, which he converted into 3,500 Bitcoins, summed into 53,500 Bitcoin connected to Silk Road.
However, the law enforcement agency was able to trace the stolen crypto funds by using a state-of-the-art cryptocurrency tracing tool together with extensive police work. The Bitcoin hacker has surrendered all property and other digital assets unrelated to the criminal proceedings.
Last March, the Bitcoin hacker voluntarily forfeited 825BTC to law enforcement agencies and another 35.5 Bitcoin in May. James Zhong will face his sentence in February next year and potentially get 20 years of prison service for the alleged wire fraud criminal act.
