CNBC published a documentary about James Zhong, who hacked the Silk Road platform on the darknet. As a result, he managed to steal about 50,000 BTC – $1.5 billion at the time of writing.
Brief background
The Silk Road site was hacked in September 2012. The hacker exploited a vulnerability that allowed him to withdraw funds previously deposited into the contract in multiple amounts.
This way he received more than 50,000 BTC. In 2017, after a network hard fork, he was credited with the same amount in BCH. For a long time, the hacking method, as well as the identity of the hacker, remained unknown.
In November 2021, after a thorough investigation, police raided Zhong’s home. He was later arrested, and in November 2022 he admitted his guilt. Zhong was eventually sentenced to one year in prison.
New details of the hacker’s arrest
For the documentary, the TV channel used exclusive investigation materials, including police papers and recordings. As it turns out, Zhong ended up in prison because of a small mistake.
In March 2019, he contacted the police in connection with the theft of 150 BTC ($600,000 at that time). When the police were powerless, Zhong hired a private investigator, but failed to catch the thief.
According to the publication, even at that time his expenses were quite high. Zhong regularly lived at hotels such as the Ritz Carlton, Plaza and Waldorf Astoria, the video states.
He later bought a second house, several cars, boats and regularly threw parties. According to Zhong himself, he earned his capital in 2009, at the dawn of the popularization of Bitcoin.
In September 2019, he made a mistake. Zhong sent $800 to the exchange, confirming his data through KYC. Federal Bureau of Investigation (FBI) agents were already monitoring his accounts at that time.
Police trick
To confirm the identity of the hacker, several department officials and local police visited Zhong. According to them, they were investigating the theft of 150 BTC.
The burglar not only invited them into the house, but also showed off his Bitcoin wallet. According to one of the law enforcement officers, it was worth about $60-70 million.
This was enough to obtain a search warrant. During the investigation, a hardware wallet with stolen bitcoins, stacks of cash, precious metals and much more were found in Zhong’s house.
The cryptocurrency that the hacker withdrew from Silk Road was confiscated by the authorities. In the spring of 2023, a significant amount of bitcoin was withdrawn from the account where it was stored for the first time in a long time.
Source: Cryptocurrency
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