Silk Road Hacker Accidentally Reveals Feds $70,000,000 Worth of BTC on His Laptop

It looks like a Silk Road hacker played a joke on himself with the latest move just before he was arrested. Check out the latest reports about a more or less funny event below.

The Silk Road hacker, James Zhong, unintentionally incriminated himself during a police investigation when he opened up his laptop in front of federal investigators, revealing thousands of Bitcoin (BTC) stored on it.

He was charged by the US government last year for stealing over 50,000 BTC from the illicit online marketplace, Silk Road, in 2012. In 2019, after a break-in at his house, Zhong called the police to report the incident.

However, he revealed over the phone that he was an investor in Bitcoin and had incriminating evidence lying around in his home, putting himself on the radar of investigators.

IRS Criminal Investigation was working to solve the 2013 Silk Road hack. They traced the on-chain paper trail and hired a blockchain analytics firm named Chainalysis.

The firm noticed that an address associated with the Silk Road hacker accidentally performed a KYC routine with a crypto exchange, revealing Zhong’s name and home address months after his 911 call.

With the help of Shaun MaGruder, CEO of a cyber intelligence company named BlockTrace, the IRS created a plan to enter Zhong’s home. They talked to him under the guise of investigating the break-in that he had reported earlier.

The hacker made the mistake of telling investigators he was a “Bitcoin OG” and that he had 1,500 BTC sitting on one laptop alone.

MaGruder of BlockTrace stated the following:

“Lo and behold, he had $60 or $70 million worth of Bitcoins right there next to us…”

It has been revealed that Zhong was among the first contributors to the development of Bitcoin. He regularly shared his advice and suggestions on online forums to enhance the Bitcoin protocol.

However, the investigators returned the next day, pretending to help him, but instead executed a search warrant.

With the help of a computer hardware-trained dog, the agents found the wallets that contained the addresses to the 50,000 BTC, which were once worth over $3 billion. These wallets were found in a safe that was buried in concrete underneath Zhong’s basement floor.

The hacker will have to spend one year and a day in prison.

The story was originally reported by the online publication the Daily Hodl.