A Random 22-Year-Old Stole Billions Worth Of Bitcoin From Silk Road… And Just Sat On The Secret Fortune For A Decade… Then He Was Arrested.

In November 2022, federal prosecutors in Manhattan announced a seizure of billions of dollars worth of Bitcoin from a 32-year-old real estate developer named James Zhong. It was the second-largest cryptocurrency seizure ever carried out by the Department of Justice. And like many Bitcoin capers, James Zhong's story is pretty wild.

According to his guilty plea, about a decade ago, Zhong committed wire fraud in connection with a scam perpetrated against the infamous "dark web" marketplace Silk Road. After perpetrating the scam, James proceeded to sit on what became a multi-billion-dollar stolen fortune for A DECADE without really doing much with the money.

The raid happened back in November of 2021 after investigators traced 51,680 bitcoins to Zhong. The coins at one time belonged to Silk Road founder Ross Ulbricht, who served over 10 years in prison before being pardoned by Donald Trump on January 21, 2025. At the time of the seizure, Bitcoin was trading in the neighborhood of $60,000, which gave the cache a total value of $3.4 billion. At today's Bitcoin price of just under $100,000, the 50,000 coins are worth around $5 billion.

Side note: I was just sent an amazing Twitter thread that gets into all the nitty-gritty details of James Zhong's story. Check this out if you're interested:

The US Government stole $3.6 Billion in #Bitcoin from Bitcointalk user Loaded, who stole it from Silk Road in 2012.

My man held 50k BTC through EVERY bear market, in Aug 2017 maxi dumps ALL his forked bcash for bitcoin, & HODLs that too! Let's dig into exactly what happened… pic.twitter.com/vWMazDv7jH

— FractalEncrypt ∞/21M (@FractalEncrypt) November 8, 2022

Here's what happened:

It has been reported that James Zhong first became involved in the Silk Road because he was an avid cocaine user. Between 2012 and 2014, when he was still in his early 20s, Zhong allegedly carried out a relatively simple scheme against Silk Road that allowed him to abscond with 51,680 BTC. Zhong apparently accomplished this feat by creating several phony Silk Road accounts and then orchestrating more than a hundred automatic transactions that essentially tricked the platform into thinking it was releasing large amounts of cryptocurrency into his own accounts. At the time of his scam, the 51,680 BTC were worth around $620,000.

Then, the crypto markets went wild…

Sitting On Billions

After transferring the money to his own legitimate accounts, James Zhong proceeded to sit on the money for a decade. He moved to Miami and launched a real estate development business.

As you know, the price of BTC skyrocketed between 2017 and 2021, eventually topping $60,000 on multiple occasions, including on the day of his arrest in November 2021. When BTC was at $60,000, James Zhong was secretly a multi-billionaire. But he never touched the money. He didn't buy any jets or mansions or even the requisite Lamborghini. He appears to have led a modest life in Miami and was trying to jump-start a real estate development career.

In March 2019, Zhong called 911 to report that hundreds of thousands of dollars worth of crypto had been stolen from his home in Athens, Georgia. Unrelated to that theft, in September 0f 2019, Zhong transferred a small portion of his stolen Bitcoin stash to an exchange. That exchange followed strict "know your customer" rules. Putting it all together, the FBI was able to connect the dots between these Bitcoin being part of the stolen Silk Road stash and the robbery at James' home in March 2019.

When the FBI raided Zhong's home on November 9, 2021, they found the device that held the keys to a multi-billion-dollar crypto wallet in a popcorn tin tucked away in his bathroom closet.

Following the seizure, Zhong voluntarily surrendered another 1,000 bitcoins to investigators, and he's also pledged to cooperate to find the remaining missing tokens and provide technical know-how to access them.

Damian Williams is the US Attorney for the Southern District of New York, and he had this to say about the seizure in a press statement:

"For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery…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."

In April 2023, James Zhong was sentenced to one year and one day in prison. Had he never called 911 to report that a small amount of crypto had been stolen, today, his 51,680 BTC would be worth $5.17 billion. He could tap any number of crypto-washing services to liquidate a couple hundred million or even a billion dollars in standard currency. Without a lot of work, today, he could be living the absolute most insane life of all time in Dubai or some other crypto-friendly country where lots of annoying questions aren't asked.