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A man who stored billions of dollars' worth of stolen cryptocurrency in an underground safe — and a Cheetos popcorn tin — was sentenced Friday to a year and a day in prison.
According to federal prosecutors, James Zhong, 32, stole more than 50,000 bitcoins from the Silk Road marketplace, a place on the so-called dark web where people could buy illicit items such as pornography and drugs. Its founder, Ross Ulbricht, was sentenced in 2015 to life in prison without the possibility of parole after he was convicted of drug trafficking, money laundering, and hacking, among other charges.
Zhong was able to steal from the marketplace by creating multiple accounts and tricking Silk Road into releasing the bitcoin to his accounts, per the Department of Justice. He never actually purchased or sold anything on the website, according to a DOJ statement.
"Back in 2012, James Zhong committed wire fraud by stealing 50,000 Bitcoin from Silk Road, and for the next 10 years, he managed to conceal what he had done and how he obtained his fortune," US Attorney Damian Williams said in the statement.
But in November 2021, US authorities obtained a search warrant to search his home in Gainesville, Georgia. There, the DOJ says, investigators recovered more than 50,000 bitcoins, split between "an underground floor safe and on a single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet." Authorities also recovered at Zhong's home more than $660,000 in cash, as well as silver and gold bars.
The bitcoin was valued at $3.4 billion when it was seized and is now worth more than $1.5 billion, according to the DOJ.
A photo shared by the department shows that the crypto tin originally contained Cheetos-brand popcorn in both Flamin' Hot and Cheddar flavors. According to media reports, the tin and its promise of "2 favorites together" was available exclusively at Walmart during the 2020 holiday season.
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Charles R. Davis was a Senior Reporter at Business Insider covering breaking news, international affairs, and US politics.Based in Philadelphia, he has reported on life along the US-Mexico border, the impact of the war on drugs in Nicaragua, the rise of socially conscious tourism in Ecuador, and international intrigue in Venezuela. Following Russia's full-scale invasion of Ukraine, he interviewed refugees and antiwar Russian dissidents on the ground from Romania, Moldova, and Turkey.His work has aired on public radio and been published by outlets such as The Guardian, The Daily Beast, The New Republic, HuffPost, Columbia Journalism Review, and Vice.His coverage of labor violations in the entertainment industry was recognized at the 2019 Southern California Journalism Awards.You can follow him on Mastodon, Bluesky, and Threads.ExpertiseBreaking news, foreign affairs, disinformation, labor, criminal justice, immigrationPopular articlesIn Transnistria, controlled by pro-Russia separatists, a fear of war and a toast: 'To the death of Putin'A sentence that never ends: How probation kept a Pennsylvania man locked up through the pandemic — even after his release dateThe socialite daughter of Putin's spokesman complains US sanctions are 'unfair' but thinks they won't make a differenceFears grow of Russian 'peacekeepers' in a village surrounded by a breakaway regime propped up by the KremlinConspiracy theories are no longer the domain of lovable weirdos tracking Bigfoot — they're a sinister problem that's only getting bigger
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