How Billions of Stolen Bitcoin Stayed Hidden—Until a Slipup

Jimmy Zhong stayed under the radar for nearly a decade, until he made a banking error
By Gina Carey,  Newser Staff
Posted Nov 26, 2023 6:28 AM CST
How a Coder Stole $3B in Crypto, Then Lost It All
An advertisement for bitcoin is displayed on a building in Hong Kong.   (AP Photo/Kin Cheung, File)

The 2012 mystery of who stole a bundle of bitcoin that eventually ballooned to $3 billion in worth puzzled authorities for the better part of a decade, but in 2019, Jimmy Zhong finally made an error that led them to his doorstep. CNBC's investigative report delves into how Zhong stole over 50,000 bitcoin from Silk Road (a defunct black market) when he was in his early 20s, what his life as a secret billionaire looked like, and how he was finally caught, causing him to lose it all. Zhong, then 28, had been living in a modest bungalow near the University of Georgia in Athens when he first got on the radar of local police. Zhong—who had a reputation as a "local party boy" and alum who liked to pick up the tab for his friends—had called 911 after $600,000 worth of bitcoin was stolen from his home. The local police investigation into that theft stalled.

What no one knew: FBI analysts had been separately tracking his digital wallet ever since the Silk Road heist. Blockchain technology hid his identity, but his stolen coins were on its public ledger. Zhong fastidiously hid his movements, but several months after he called 911, he transferred a relatively paltry $800 of his stolen cryptocurrency to a crypto exchange, and that particular exchange required identity markers. His cover was blown. Under the ruse of helping him track down the bitcoin stolen from his home, agents observed Zhong's second home and saw enough to obtain a search warrant. There, they discovered his hidden stash (in a computer), plus a buried safe. Zhong was an "original gangster," a term used to describe the small group of rogue players who developed bitcoin's earliest code—which made him uniquely suited to steal cryptocurrency. Read the full story here. (More cryptocurrency stories).

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