U.S DoJ reveals second-largest haul with seizure of BTC worth $3.3B

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The U.S Depart­ment of Jus­tice is in the news today after it announced its sec­ond-largest Bit­coin seizure ever. This was made towards the end of 2021 in con­nec­tion with Silk Road, the infa­mous dark web marketplace.

As per the offi­cial press release, Dami­an Williams, the U.S Attor­ney for the South­ern Dis­trict of New York, revealed that a joint inves­ti­ga­tion by his office and the Inter­nal Rev­enue Ser­vice led to the dis­cov­ery of a mas­sive Bit­coin stash in Novem­ber 2021. 

With over 50,000 BTCs, the stash was worth an esti­mat­ed $3.36 bil­lion at the time. This hoard of BTC was recov­ered from James Zhong, with Zhong defraud­ing Silk Road back in 2012. 

The Silk Road fraud

In Sep­tem­ber 2012, Zhong cre­at­ed sev­er­al fraud­u­lent accounts on Silk Road in order to exe­cute a scheme to defraud the mar­ket­place. He tricked the marketplace’s with­draw­al pro­cess­ing sys­tem into releas­ing almost 50,000 BTCs by trig­ger­ing over 140 transactions. 

The exploit­ed Bit­coins were moved to sev­er­al dif­fer­ent address­es in a bid to con­ceal iden­ti­ty and pre­vent detection. 

In August 2017, Bitcoin’s hard fork led to Zhong gain­ing 50,000 BCH. These, he lat­er exchanged for 3500 BTC, bring­ing his total stash to 53,500 BTC. 

Similar seizures by U.S authorities

This is not the first time that U.S author­i­ties have con­fis­cat­ed Bit­coins relat­ed to the Silk Road. Back in Novem­ber 2020, the U.S Depart­ment of Jus­tice seized almost 70,000 Bit­coins, along with Bit­coin Cash (BCH), Bit­coin Gold (BTG) and Bit­coin Satoshi Vision (BSV). Accord­ing to court doc­u­ments, these cryp­tocur­ren­cies were also stolen from Silk Road.

Ear­li­er this year, the Depart­ment of Jus­tice revealed its biggest ever Bit­coin seizure – Almost 120,000 in num­ber. This $3.6 bil­lion seizure was relat­ed to the hack car­ried out on Bitfinex in 2016. 

The Federal Bitcoin whale

The seizures out­lined above have made it evi­dent that Fed­er­al author­i­ties in the Unit­ed States are sit­ting on a BTC stash. This qual­i­fies them as a major whale. 

Cryp­to-Twit­ter esti­mates that the author­i­ties’ BTC hold­ings are over 210,000 BTCs. In fact, one user point­ed out that when the BTC from Mt. Gox is tak­en into con­sid­er­a­tion, the num­ber goes up to 287,000 BTC. 



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