Jimmy Zhong

Last updated
James Zhong
Born
James Zhong

(1990-05-24) May 24, 1990 (age 34) [1]
New Jersey [1]
Other namesJimmy Zhong
Alma mater University of Georgia (BS)
Known forLargest theft of Bitcoin in U.S. history
Conviction(s) Wire fraud
Criminal penalty1 year and 1 day imprisonment [2]
Date apprehended
November 9, 2021

James "Jimmy" Zhong (born May 24, 1990) is an American man who was convicted in 2022 for stealing over 51,680 bitcoin (then worth about $620,000; [1] value as of 2023 approximately $3.4 billion [3] ) from the online black market Silk Road between 2012 and 2014. [4] Zhong, who was closely monitoring the early development of bitcoin, [5] had found an error on Silk Road that allowed him to withdraw more funds than what was initially deposited. This was activated by repeatedly double-clicking the withdraw button, and further abused by using multiple accounts on the website. [3]

Zhong managed to conceal his identity and elude detection for nearly 10 years. He lived a luxurious lifestyle, using tools such as cryptocurrency mixers to obscure the origin of the bitcoin he spent. [5] Zhong told friends that he had mined thousands of bitcoin in the technology's early days. [5]

Zhong initially got involved with Silk Road as an avid cocaine user. In 2016, Zhong was arrested in downtown Athens, Georgia, for possession of cocaine. [6]

On March 13, 2019, Zhong contacted 911 to report the theft of hundreds of thousands of dollars in cryptocurrency from his residence. [7] In September 2019, he made a mistake by transferring a small amount of stolen bitcoin to a cryptocurrency exchange that followed know-your-customer rules. This was not enough to prove Zhong was the hacker. To establish Zhong's culpability, the IRS criminal investigation division collaborated with the Athens-Clarke County Police Department, which was already probing the theft at Zhong's residence. [5] On November 9, 2021, a raid on his Gainesville, Georgia, home resulted in the seizure of about 50,676 bitcoin, then valued at over $3.36 billion. [8] Zhong cooperated with investigators, forfeited all of his bitcoin and pled guilty to one count of wire fraud. [9]

In April 2023, Zhong was sentenced to a year and a day in prison. [2]

See also

References

  1. 1 2 3 "Sentencing Memorandum Submitted On Behalf of James Zhong" (PDF). Archived (PDF) from the original on 2023-10-30. Retrieved 2023-10-24.
  2. 1 2 Davis, Charles R. (14 Apr 2023). "Man gets prison time after feds discover $3.4 billion in stolen bitcoin hidden inside a Cheetos popcorn tin and underground safe". Business Insider. Archived from the original on 12 July 2023. Retrieved 12 July 2023.
  3. 1 2 "Southern District of New York | U.S. Attorney Announces Historic $3.36 Billion Cryptocurrency Seizure And Conviction In Connection With Silk Road Dark Web Fraud | United States Department of Justice". www.justice.gov. 2022-11-07. Archived from the original on 2023-02-12. Retrieved 2023-10-19.
  4. ↑ "Southern District of New York | Silk Road Dark Web Fraud Defendant Sentenced Following Seizure And Forfeiture Of Over $3.4 Billion In Cryptocurrency | United States Department of Justice". www.justice.gov. 14 April 2023. Archived from the original on 10 August 2023. Retrieved 12 July 2023.
  5. 1 2 3 4 Tortorelli, Paige; Javers, Eamon (2023-10-17). "The secret life of Jimmy Zhong, who stole – and lost – more than $3 billion". CNBC. Archived from the original on 2023-10-18. Retrieved 2023-10-19.
  6. ↑ Johnson, Joe. "Athens man arrested after flashing drugs downtown, police say". Athens Banner-Herald.
  7. ↑ Tortorelli, Eamon Javers, Paige (2023-10-17). "The secret life of Jimmy Zhong, who stole – and lost – more than $3 billion". CNBC. Retrieved 2024-04-30.{{cite web}}: CS1 maint: multiple names: authors list (link)
  8. ↑ Tortorelli, Paige (7 November 2022). "Feds announce seizure of $3.36 billion in bitcoin stolen a decade ago from illegal Silk Road marketplace—the second-largest crypto recovery". CNBC. Archived from the original on 12 July 2023. Retrieved 12 July 2023.
  9. ↑ Voreacos, David (14 Apr 2023). "Theft of Bitcoin that topped $3 billion in value leads to one-year prison sentence for James Zhong: 'I always knew what I did was wrong'". Fortune. Archived from the original on 12 July 2023. Retrieved 12 July 2023.
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