Over 50,000 BTC Worth Over $1 Billion Recovered from Silk Road Darknet Debacle

The details were confirmed by Damian Williams, the US Attorney for the Southern District of New York.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 8 November 2022 13:10 IST

Over 50,000 BTC Worth Over $1 Billion Recovered from Silk Road Darknet Debacle

Photo Credit: Unsplash/ Bermix Studio

Silk Road allowed the purchase of anything via Bitcoin

Highlights

Silk Road was launched on the dark web in 2011
In September 2012, Zhong executed a scheme to defraud Silk Road
Silk Road maker Ross Ulbricht is serving jail time

The US authorities have declared one of their largest ever crypto recoveries after they managed to unearth 50,676 Bitcoins related to the infamous dark-web marketplace, Silk Road. The amount of the recovered Bitcoin comes close to the valuation of $1.04 billion (roughly Rs. 8,228 crore) at the time of writing. The details were confirmed by Damian Williams, the US Attorney for the Southern District of New York. Silk Road, the online marketplace launched on the dart net was launched in 2011 by Ross Ulbricht, who is currently serving his jail time.

The Bitcoin recovery was made from an address in Georgia connected with James Zhong. Precious metals and a cash amount of $661,900 (roughly Rs. 5 crore) were among other items that were seized from Zhong's possessions.

“In September 2012, Zhong executed a scheme to defraud Silk Road of its money and property by creating a string of approx. nine Silk Road accounts in a manner designed to conceal his identity, triggering over 140 transactions in rapid succession to trick Silk Road's withdrawal-processing system into releasing approximately 50,000 Bitcoin from its Bitcoin-based payment system into Zhong's accounts,” a report by the US Department of Justice (DoJ) wrote in a post.

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Zhong later transferred the Bitcoins into a variety of separate addresses also under his control.

The accused has pleaded guilty to committing this wire fraud in 2012.

“Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds. This case shows that we won't stop following the money, no matter how expertly hidden,” the post by the DoJ added.

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At the time of its launch in 2011, the Silk Road marketplace allowed the purchase of anything including banned substances via Bitcoin.

Its jailed creator Ulbricht has been auctioning some of his artwork from the prison as NFTs to fund his legal processes.

Ulbricht has remained in prison since October 2015 when he was sentenced to two life terms.

Meanwhile, the US authorities are taking measures to ensure crypto activities do not become a safe tool to commit financial crimes by fraudsters.

In February this year, the DoJ tapped a seasoned computer crimes prosecutor to lead its new national cryptocurrency enforcement team.

At the time, the US authorities had charged a married New York couple with allegedly laundering Bitcoins that at the time were valued at over $4.5 billion (roughly Rs. 33,750 crore). These were stolen in the 2016 hack of the digital currency exchange Bitfinex.

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Further reading: Cryptocurrency, Silk Road, Dark Web, Bitcoin, Ross Ulbricht

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More