11 years of dark network Bitcoin hacking have finally come to an end, with 50000 BTCs now worth $3 billion!

Athens, Georgia is the location of the University of Georgia, and the police there are accustomed to college town type crimes such as breakins, bar fights, and all kinds of noise. That kind of thing

Athens, Georgia is the location of the University of Georgia, and the police there are accustomed to college town type crimes such as breakins, bar fights, and all kinds of noise. That kind of thing.

However, the 911 call made on the evening of March 13, 2019 was different from anything encountered by the Athens Clark County Police Department.

The person on the phone is Jimmy Zhong, 28 years old. He is a local party boy and an alumnus from Georgia, who frequently frequents drinking places in Athens. He is not like the noisy people in other towns - Zhong is also a computer expert with an exceptionally powerful digital home monitoring system.

Now, he's calling to report a crime: hundreds of thousands of dollars in cryptocurrency, which he said was stolen from his home. Thinking of the lost money, Zhong felt heartbroken.

I am experiencing a panic attack, "Zhong told the dispatcher according to a recording obtained by CNBC.

Zhong rejected the dispatcher's ambulance proposal and began attempting to explain the situation. I am an investor, it's like an online thing, "he said. Bitcoin.

The following events will end nearly a decade of pursuit and address one of the biggest crimes of the crypto era. This will also lead to the largest cryptocurrency seizure in the history of the Ministry of Justice.

That winter night, Zhong's emergency call led investigators onto a long digital trail that dates back to the early days of Bitcoin and reveals the dark truth about the world of hackers and coders responsible for creating cryptocurrencies. This is a world where heroes and villains exchange positions, even with the same person.

All of this will not go as Zhong wished.

The 911 call did not generate a suspect in the Zhong family theft case. The Athens police are handling one of their earliest encryption cases, unfamiliar with the dark underworld, and they have been unable to make progress in the case.

Therefore, Zhong turned to local private investigator Robin Martinelli, who owned and operated a Martinelli investigation company near Loganville, Georgia.

As the deputy of a former sheriff, Martinelli became a PI, far from being an encryption expert. She specializes in process services, spousal fraud, and custody investigations, which once led her company to appear in an episode of the "Montreal Williams Show".

Martinelli recently underwent amputation surgery and was asked to undergo surveillance surgery with the help of a prosthetic limb.

Nevertheless, she still has the motivation to solve Zhong's case.

When you wake up and don't put your feet on the ground, but you still have to run a company, you have to go out and kick your butt, "Martinelli told the new documentary in an interview with CNBC.

She first checked the surveillance video files at Zhong's home. When examining the footage of the night of the crime, Martinelli discovered a slender male figure.

We can say they were wearing a hood - a gray hood - but later they almost looked like a black ski mask, "Martinelli said.

The suspect seems to know his way to the Zhong family, which makes Martinelli believe he is a friend, or at least someone who has heard Zhong boast about his Bitcoin hiding place. From the video, Martinelli was able to determine the suspect's height, even the size of his hand.

She said that when she began the investigation, she placed Zhong's friends under surveillance and followed them to their homes on Broad Street and College Avenue, as well as to the bars in the city center. She installed a tracker on her car, searched social media, and conducted background checks.

Watching Zhong's bar friends come and go, Martinelli formed a low opinion of this group of people. She described them as' very, very casual, plastic, not really concerned, maybe a bit using Jimmy. '.

Martinelli said that Zhong seems to be resistant to her theory, especially when they start paying attention to his circle of friends. Martinelli has finally identified a suspect who believes he stole 150 Bitcoins from Jimmy. At that time, the value of digital currency was close to $600000.

Zhong doesn't want to listen, he said.

When I mention that someone must know where this money is, they feel uneasy, "Martinelli said. She understood why Zhong was so hurt because someone close to him might betray his ideas.

Jimmy wants to be loved, "she said. Jimmy wants friends

Even though Martinelli is dissatisfied with her friend group, she is still enthusiastic towards her clients, believing that she is a strange man looking for friends.

Jimmy is a good person, "she said.

Many people around Athens also have a similar feeling towards him.

In the years before the theft, Zhong had already become famous for throwing a lot of money in the city. He is the kind of person who would buy an expensive round of lenses for the entire bar, with hundreds of dollars disappearing into his eager throat within seconds.

According to court documents reviewed by CNBC, although he lived in a rudimentary off campus bungalow near the student dormitory and university bar in the city center, he stayed in high-end hotels, including the Ritz Carlton, Plaza, and Waldorf. He has shopped at high-end stores such as Louis Vuitton, Gucci, and Jimmy Choo. He drove a high-end car, including one. He bought a second house and a lakeside villa with a dock in Gainesville, Georgia, just a short drive from Athens. He used motorboats, boats, strippers, and many, many wines to store it. Tesla.

His party was epic.

Zhong leads the best life with no obvious source of income. As far as anyone knows, he has no real job. He told his friends that he had entered the field of Bitcoin very early and had mined thousands of coins in the early stages of this technology. Zhong told people that he had been involved in cryptocurrencies as early as 2009, when Bitcoin was linked online by the mysterious Satoshi Nakamoto and a small group of developers with anonymous cryptocurrency creators.

No matter what Zhong is doing, he is making a mountain of cash. He is willing to squander.

In 2018, when his beloved Georgia Bulldog football team was making the Rose Bowl, Zhong summoned a small group of friends to make a pilgrimage to Los Angeles.

It really feels like being with Jimmy, no restrictions, "Georgia alumnus Stefana Masic and one of the friends on this trip told CNBC.

Marcich said that Zhong not only paid for all the tickets, but also rented a private plane for off-road flights. He gave each friend up to $10000 to shop crazily on Rodeo Drive. They spent their money on clothing, accessories, and gadgets they wore in the city.

I've never taken a private plane before, and I've never lived in such a great place. It's cool because you know, I've experienced many things I wouldn't normally experience. Airbnb

When he cheered his team in Los Angeles, Zhong couldn't have known that a small group of agents from the Criminal Investigation Department of the Internal Revenue Service, led by officials from the same city, were painstakingly trying to solve a crime that could date back several years.

According to court documents reviewed by CNBC, what caught the attention of investigators was a hacker attack in 2012, in which someone stole 50000 Bitcoins from a website on the dark internet named. This website was one of the earliest crypto markets, where anonymous buyers and sellers exchanged various illegal materials. It is full of drugs, firearms, pornography, and other things people want to keep confidential.

According to court documents, over the years, the value of Bitcoin stolen by Silk Road hackers has skyrocketed to over $3 billion. Investigators can track the location of currency on the blockchain, which is a common ledger for all transactions. But they cannot see the identity of the new owner of the fund. Therefore, they observed and waited for several years as hackers transferred funds from one account to another, spun off some funds, and pushed some of them through encrypted "mixers" designed to conceal the source of funds.

Finally, blockchain analysis company Chainalysis is tracking digital wallets containing stolen Silk Road assets and discovering that hackers have made a small mistake. He transferred funds worth approximately $800 to a cryptocurrency exchange that follows established banking rules, including the so-called know your customer process, requiring the true name and address of the account holder.

This account is registered under the name of Zhong. The transaction occurred in September 2019, six months after Zhong called 911 to report to the police.

This alone is not enough to prove that Zhong is a hacker. They must determine.

Therefore, the US Internal Revenue Service called the Athens Clark County Police Department and sought assistance, according to sources from both agencies. At that time, the police investigation into Zhong's criminal report had been at a standstill.

I received a call from an IRS agent, "Lieutenant Jodie Thompson, who leads the local property and financial crimes department, told CNBC. He said, 'Can I come over and talk to you about Jimmy? I thought, of course, I remember this case.'.

Afterwards, Thompson teamed up with IRS-CI agent Trevor McAleenan and a company named Later. Thompson teamed up with IRS-CI agent Trevor McAleenan and Shaun MaGruder, the CEO of a network intelligence company named. MaGruder's company collaborated with the US Internal Revenue Service as an embedded contractor and was hired due to its experience in unlocking complex blockchain transactions.

Three investigators said together that they had designed a plan. They will use a trick to approach Zhong and tell him that they are investigating the crime of his phone call, where a thief stole his hundreds of thousands of dollars in Bitcoin.

In fact, they are investigating the crimes that Zhong believes he has committed. The proceeds of this crime are now worth billions of dollars.

When these three men knocked on the door of his lakeside home in Gainesville, Zhong enthusiastically opened the door, according to the body camera footage obtained exclusively by CNBC. He believes that the police and two experts are there to help solve his encrypted cold case.

If you solve this problem for me, I will invite you to go out to the party, "Zhong told the three in the body camera.

The video shows that J officials are full of praise. They called his front door "beautiful". They called his speaker "crazy" and praised his dog for being beautiful. They requested to visit the house. The camera footage shows these people tapping on the stone floor, checking the closet, and inspecting the wooden paneling. Zhong Zhen doesn't know, but they are searching for the secret compartment.

Zhong took the investigators to his basement, equipped with a complete bar and a strip club.

Is this your exercise? "McCallinan asked Zhong.

No, that's for girls, "Zhong replied.

The lens of the portable camera also showed that they had a good understanding of the clock's security system and asked him to explain each feature and function. Zhong was also arrested and showed them a metal box. He said he used to store $1 million in cash so that he could leave a deep impression on a woman.

Did it work? "Lieutenant Thompson asked.

No, "Zhong said.

It will never, "Thompson replied.

Law enforcement officials learned that Zhong was equipped with a flame thrower inside the scene. They saw his AR-15 rifle hanging on the wall.

MaGruder said that the maturity of the clock is obvious.

He's navigating the keyboard, like I've never seen anyone navigate a keyboard before, "MaGruder said. He doesn't need to use a mouse because he knows all the hotkeys.

The police played with this trick, asking Zhong to open his laptop and explain how he initially owned Bitcoin. Zhong sat on the sofa next to the investigators, entered his password, and asked them to turn around and leave while he was typing.

When he opened his laptop, law enforcement could see his Bitcoin wallet.

You see, he has Bitcoin worth $60 million or $70 million next to him, "MaGruder said in an interview with CNBC.

The evidence is sufficient to convince investigators that they are on the right track. When he left Zhong's lakeside house, Magrud told CNBC, and he thought to himself, "This is incredible. I think we've found our people.

McAleenan said that the first visit allowed investigators to obtain a federal search warrant for the Zhong family. McCallinan, Magrud, and Thompson returned with a large team of J officials on November 9, 2021.

Before the police raided the house, McCallinan had to explain to Zhong that he didn't really want to help him. He attempted to convict him.

I said, Jimmy, you know my name is' Trevor '. I'm actually Trevor McCallinan. I'm a special agent from the Criminal Investigation Bureau of the Internal Revenue Service, and we're here to execute a federally approved arrest warrant on your house, "McCallinan said.

He's a bit like, 'Did I get fucked?' "McCallinan added.

McAleenan said that at the time, another police officer slid a device called a "shaker" into the clock's laptop, causing the cursor to constantly move and allowing law enforcement agencies to access password protected content on the computer.

The police rushed into the house, opening every crevice in search of evidence. McAleenan said that in the upstairs closet, they found a popcorn jar containing a computer worth millions of dollars in Bitcoin.

McAleenan said they used trained sniffing dogs to detect electronic devices and found a safe buried in concrete under the basement floor tiles. The court documents state that the safe contains precious metals, piles of cash, and physical Bitcoin from early cryptocurrency mints. They also discovered a wallet containing Bitcoin, originating from the original hacker attack on the 2012 Silk Road.

Zhong was defeated.

It's really late at night, we can say we've succeeded, "McCallinan said. We have found the evidence we are looking for. The room lights up. What I mean is that every agent on the website is cheering.

While organizing the evidence, the agents discovered other things about the unusual Mr. Zhong. In encrypted slang, he is a "primitive gang" or OG.

Investigators found that as early as 2009, the year Bitcoin was invented, Zhong was one of a small group of early coders dedicated to developing and improving this technology. McAleenan said that compared to some other OG players who have become famous in the Bitcoin community, his contribution is relatively small. But the investigators concluded that he contributed to the initial Bitcoin code and provided early developers with ideas on key themes such as how to reduce the size of small blockchain.

In other words, a hacker involved in the development of Bitcoin itself later became one of the largest Bitcoin thieves in history.

As we mentioned, he was one of the original gangs, in terms of Bitcoin core software developers, OG, "McAleenan said. He has been in this space for some time now

Ironically, Zhong's role in the history of Bitcoin symbolizes the culture that initially established cryptocurrencies, "said Nathaniel Popper, author of" Digital Gold: Bitcoin and Attempts to Reshape Currency's Dissociability and the Insider of Millionaires.

Everyone comes here for their own reasons, "Popper told CNBC. Therefore, this is a very unconventional and eccentric group of people.

Bitcoin is always full of satire, "Popper said. Yes, it is ironic for a Bitcoin supporter to steal Bitcoin from another Bitcoin supporter. But I think this is also part of defining Bitcoin to some extent.

Zhong is charged with wire transfer fraud. After pleading guilty, he was sentenced to one year and one day in federal prison. Zhong, who is currently 33 years old, began serving his sentence on July 14, 2023 at the federal prison in Montgomery, Alabama.

Finally, Zhong failed to secure the stolen Bitcoin. The US government confiscated these assets. Officials have launched a program that allows victims of hacker attacks to apply for the retrieval of their Bitcoin, based on a confiscated document reviewed by CNBC.

No one came forward to claim the spoils. This is not surprising, as the users of the Silk Road in 2012 were mainly drug dealers and their customers. The federal government only sold the stolen Bitcoin and will retain the proceeds. According to IRS-CI, some of the income generated may be shared with the Athens Clark County Police Department to recognize the assistance of local officials in this case.

On April 14th, when Zhong left the court after the verdict was pronounced, CNBC attempted to inquire about Zhong's role in the crime. Zhong covered his head with his coat and left without saying a word.

In a statement issued to the judge before the verdict, Zhong said that owning billions of stolen Bitcoin made him feel important.

Zhong's lawyer Michael Bachner said that this theft case never truly harmed the US government.

The government has certainly not been harmed by Jimmy's actions, "Bahner told CNBC. If Jimmy hadn't stolen these bitcoins, the government would have actually confiscated them from Silk Road operator Ross Ulbricht, and they would have sold them in 2014 two years later, just like they would have sold other digital currencies.

At this point, the government "will receive $320 or approximately $14 million per Bitcoin," Bachner said. Now, thanks to Jimmy owning them, the government has made a profit of $3 billion.

Zhong requested not to go to prison because he was worried about the fate of his 13-year-old dog, Chad. The clock passed very hard. In the autism spectrum, Bachner said he was severely bullied at school. For many years, he found comfort in an online community where he could deploy his computing skills.

Zhong's dog Chad lives with a friend.

As for the initial crime against Jimmy Zhong - the Bitcoin theft in Athens in March 2019 that led to him making a 911 call - that crime has never been resolved. The perpetrators are still at large.

At this point, Zhong. is currently sentenced to one year in prison for stealing Bitcoin from the Silk Road market.