Bitcoin: What’s the Mystery of the $3.3 Billion Stolen Coins and How Were They Found?
- BBC Cybersecurity Correspondent
The U.S. Department of Justice announced that last year it had seized $3.36 billion worth of bitcoins stolen from a hidden service website, or the so-called “dark web” on the internet.
A hacker found 50,676 bitcoins hidden in various devices in an underground safe and in a popcorn box.
James Zong pleaded guilty to hacking money from an illegal market called the Silk Road Market in 2012.
The seizure is the second largest in history, according to US authorities.
Zong’s Georgia home was searched by police a year ago and only now uncovered.
The raid came at a time when Bitcoin’s value was peaking – and the funds seized are now believed to be worth about $1.1 billion.
Police officials said they found bitcoins scattered around his home on computer hard drives and other storage devices in an underground safe and on a small computer hidden in a popcorn box in the bathroom cabinet.
Police say Zong was able to steal money from the Silk Road market by exploiting a flaw in the website’s payment system.
In September 2012, he set up multiple accounts on a black market and deposited a small amount of bitcoin in his digital wallets. He then found a way to quickly withdraw much larger amounts so as not to arouse suspicion.
Silk Road was the first blacknet market, operating from around 2011 to 2013.
It was used by drug dealers and other illicit sellers to distribute massive amounts of illicit drugs and other illicit goods and services to many buyers.
The network of hidden services, or the so-called dark web, is a part of the Internet that can only be accessed using special programs.
In 2015, a jury unanimously sentenced Silk Road founder Ross Ulbricht to life in prison.
Zong pleaded guilty to hacking a website on Nov. 4 and turned over his bitcoin and fortune to police while awaiting sentencing.
Zong faces up to 20 years in prison.
His attorney, Damien Williams, said police used crypto tracking techniques to locate bitcoins.
“Nearly 10 years ago, the amount of this large chunk of lost bitcoin swelled to over $3.3 billion and was shrouded in mystery,” he added.
“This case shows that we won’t stop tracking money, no matter how hidden, even on a small electronic circuit at the bottom of a popcorn box,” he said.
It was the largest seizure of cryptocurrency in U.S. history at the time, but was overtaken by others in February when a 2016 hack seized more than $4 billion in stolen Bitcoin.
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