A year after a billion-dollar seizure of the dark web market's crypto, the same agency found a giant trove hidden under a different hacker's floorboards.
According to an IRS-CI affidavit detailing Zhong's theft of the 50,000-plus bitcoins from the Silk Road, he appears to have found a vulnerability in that dark-web market that in 2012 allowed him to somehow pull more coins out of accounts he created there than he had deposited.
Over the nine years that followed, Zhong appears to have left that massive windfall almost entirely unspent—perhaps for fear that cashing it out into traditional currency would attract the attention of law enforcement. But even that epic restraint appears to have been in vain, as IRS-CI investigators nonetheless traced Zhong's coins to his accounts on an unnamed cryptocurrency exchange, which revealed his identity.
The Silk Road was torn down by a massive law enforcement operation in late 2013, leading to the arrest of Ross Ulbricht, the site's creator, who was sentenced to life in prison and ordered to pay $183 million in restitution. In yet another bizarre twist, however, a portion of the seized 70,000 bitcoins taken from the Silk Road by Individual X were, paying it off in full in exchange for his agreement not to lay any claim to the remaining money.
Using bitcoins stolen from the Silk Road to pay off the restitution of that site's creator may seem like a strange turn of events. But in an era when IRS-CI cryptocurrency seizures regularly pours billions of dollars into the US Treasury, there seems to be plenty to go around.
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