Man gets jail time after being caught with $3.4 billion in stolen bitcoins

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James Zhong stored billions of dollars worth of Bitcoin in an underground vault and a box of Cheetos popcorn. US Department of Justice A man convicted of stealing around 50,000 bitcoins was sentenced to a year in prison on Friday. At the time of its seizure, Bitcoin was worth over $3.4 billion. Prosecutors said the cryptocurrency was stolen from the Silk Road dark web market.

A man who stored billions of dollars in stolen cryptocurrency in an underground safe and a box of Cheetos popcorn was sentenced to a year and a day in prison on Friday.

Federal prosecutors say 32-year-old James Zhong stole more than 50,000 bitcoins from Silk Road, a market on the so-called “dark web” where users can buy anything from pornography to illicit drugs. Its founder, Ross Ulbricht, was sentenced in 2015 to life in prison without the possibility of parole after being convicted of drug trafficking, money laundering and piracy, among other charges.

Zhong was able to fly in the market by creating multiple accounts and tricking Silk Road into posting Bitcoin to his accounts; by the Ministry of Justice. He never bought or sold anything on the website, according to a DOJ statement.

“In 2012, James Zhong committed wire fraud by stealing 50,000 bitcoins from Silk Road, and for the next 10 years he managed to conceal what he did and how he got his fortune,” the official said. US Attorney Damian Williams in the statement.

But in November 2021, US authorities obtained a search warrant to search his home in Gainesville, Georgia. There, investigators recovered over 50,000 Bitcoins, split between “a safe in the basement and on a single board computer submerged under blankets in a box of popcorn stored in a bathroom closet.” Authorities also recovered more than $660,000 in cash, as well as silver and gold bullion, from Zhong’s home.

At the time Bitcoin was seized, it was valued at $3.4 billion and is still worth over $1.5 billion today, according to the DOJ.

A photo shared by the department shows the crypto box originally contained Cheetos-branded popcorn in Flamin’ Hot and Cheddar flavors. According to media reports, the box and its promise of “2 favorites together” was available exclusively at Walmart during the 2020 holiday season.

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