A man has pleaded guilty to committing wire fraud back in 2012 after 50,000 bitcoin obtained from the dark web, valued at a whopping $3.36bn, were seized from his home by law enforcement last year.
In something that sounds straight out of a modern spin on the popular drug-smuggling Narcos Netflix show, officers discovered the bitcoin riches stashed in an underground safe and within in a small computer in a popcorn tin hidden in a bathroom closet.
James Zhong from Gainesville, Georgia, was found to have been housing a further $661,900 in cash when officers searched his property, as well as other less valuable bitcoin and even some gold coloured bars.
US attorney Damian Williams said the location of the missing bitcoin was left as a mystery for almost 10 years.
Zhong obtained the bitcoin from a dark web market called Silk Road and has pleaded guilty of wire fraud. The charge carries a maximum sentence of 20 years in prison, TechCrunch reported.
It was the largest cryptocurrency seizure in the US Department of Justice’s history at the time, remaining the second-largest financial seizure in the department today.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Silk Road, where Zhong managed to obtain the illegal bitcoin, was an online black market launched in 2011. It was devised by an anonymous user known as “Dread Pirate Roberts”, who was later uncovered as Ross Ulbricht.
It became notorious for being rife with the buying and selling of drugs in exchange for bitcoin, as well as various money laundering activities.
It lasted only two years before it was shut down by the US government. Ulbricht was sentenced to life imprisonment in 2015.
It comes as the value of blockchain deals has dropped in 2022. So far this year, 1,125 deals worth a combined $18.2bn have been completed. In 2021, blockchain companies secured 1,041 deals, worth a total of $26.6bn. However, this is still significantly more than the measly $3.3bn which was put into the industry in 2019.
The drop in funding comes as bitcoin has lost roughly 60% its value this year amidst the ongoing crypto winter.
GlobalData is the parent company of Verdict and its sister publications.