CNBC obtained never-before-seen body camera footage that shows how investigators linked Jimmy Zhong to the Silk Road hack
In 2012, someone stole 50,000 bitcoin from the Silk Road, an illegal dark web marketplace. Over time, the value of the stolen bitcoin skyrocketed to more than $3 billion dollars and for years it remained one of the biggest mysteries in the world of cryptocurrency.
But the 911 call that came in on the night of March 13, 2019, was unlike anything the Athens-Clarke County Police Department had ever encountered. She began by examining Zhong's robust surveillance video archive of his home. In looking at footage from the night of the crime, Martinelli spotted a slender male figure.Surveillance footage CNBC obtained captures someone breaking into Zhong's home in March 2019.
As she watched Zhong's bar friends come and go, Martinelli formed a low opinion of the group. She described them as"very, very casual, plastic, not really caring, maybe using Jimmy a little bit." Over the years, the value of the bitcoin stolen by the Silk Road hacker had soared to more than $3 billion, according to court documents. Investigators could track the location of the currency on the blockchain, which is a public ledger of all transactions. But they couldn't see the identity of the new owner of the funds.
When the three men knocked on the door of his lake home in Gainesville, Zhong opened it enthusiastically, according to body camera footage CNBC exclusively obtained. He believed the police officer and the two specialists were there to help solve his crypto cold case. Playing on the ruse, the officers asked Zhong to open his laptop and explain how he came to have the bitcoin in the first place. Zhong sat on the couch next to the investigators and entered his password, asking them to turn away as he typed."Lo and behold, he had $60 or $70 million worth of bitcoins right there next to us," MaGruder told CNBC in an interview.Body camera footage CNBC obtained captures Zhong showing investigators millions of dollars of bitcoin on his laptop.
"I said, Jimmy, you know me as 'Trevor.' I'm actually Trevor McAleenan. I'm a special agent with IRS Criminal Investigation, and we're here to execute a federal-approved warrant on your house," McAleenan said.At that moment, another officer slid a device known as a"jiggler" into Zhong's laptop, causing the cursor to continually move and giving law enforcement access to the password-protected contents of the computer, McAleenan said.
Investigators discovered that as far back as 2009, the year bitcoin was invented, Zhong was among a small group of early coders who worked to develop and perfect the technology. He was a smaller contributor than some of the other OG players who have since become famous in the bitcoin community, McAleenan said. But investigators concluded that he made contributions to the original bitcoin code and offered ideas to the early developers on key topics like how to reduce blockchain size.
"Everybody came to this for their own reason," Popper told CNBC."And it was, as a result of that, a very sort of eclectic and eccentric group of people."
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