US seizes over 50K Bitcoin worth $3.3 bn stored in popcorn tin

Washington, Nov 8 (IANS) The US authorities have seized around 50,676 Bitcoin worth $3.36 billion stored in a circuit board hidden in the bottom of a popcorn tin in a bathroom closet.

The 32-year-old James Zhong from Georgia fraudulently obtained the Bitcoin from The Silk Road -- a site on the dark web once called "the Amazon of drugs" -- in 2012.

Zhong has now pleaded guilty to committing wire fraud in September 2012, when he unlawfully obtained over 50,000 Bitcoin from the Silk Road dark web internet marketplace, the US Department of Justice said in a statement late on Monday.

"Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from the Silk Road. For almost 10 years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery," said US Attorney Damian Williams.

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, even to a circuit board in the bottom of a popcorn tin," he said.

In operation from approximately 2011 until 2013, Silk Road was used by numerous drug dealers and other unlawful vendors to distribute massive quantities of illegal drugs and other illicit goods and services to many buyers and to launder all funds passing through it.

In 2015, following a groundbreaking prosecution by the US authorities, Silk Road's founder Ross Ulbricht was convicted by a unanimous jury and sentenced to life in prison.

Zhong funded the fraud accounts with an initial deposit of between 200 and 2,000 Bitcoin. After the initial deposit, he then quickly executed a series of withdrawals.

Through his scheme to defraud, he was able to withdraw many times more Bitcoin out of the Silk Road than he had deposited in the first instance.

He now faces a maximum sentence of 20 years in prison.