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Bitcoin Dark Web Shocking Thief: Unveiling Jimmy Zhong's Double Life.

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During his statement to the judge before sentencing, Zhong expressed that owning billions of stolen bitcoins made him feel important.

Original Title: "The secret life of Jimmy Zhong, who stole – and lost – more than $3 billion"

Original Source: CNBC

Original Translation: BitpushNews

Georgia's Athens is the location of the University of Georgia, where the police are accustomed to common types of crime in the college town, such as home invasions, bar fights, and various disturbances.

However, on the evening of March 13, 2019, the local police received an unusual emergency call.

The person making the phone call is Jimmy Zhong, a 28-year-old local who frequents bars and is an alumnus of the University of Georgia. In addition to enjoying parties, he is also a computer expert and has installed an advanced digital monitoring system in his home.

At that time, Jimmy Zhong reported to the police that he had hundreds of thousands of dollars worth of cryptocurrency stolen from his home. The thought of the lost money caused Zhong great pain.

According to the recording obtained by CNBC, Zhong told the operator, "My panic disorder has flared up."

Zhong refused the operator's proposal to call an ambulance and began to explain: "I am a Bitcoin investor. Bitcoin is a new online, internet-based thing."

No one expected that this phone call would lead to a nearly decade-long pursuit, uncovering a major crime in the era of encryption, and resulting in the second largest cryptocurrency seizure in the history of the US Department of Justice (Note: at the time of the incident, this was the largest cryptocurrency seizure in US history, but this record was broken in February of last year by the 4 billion dollar Bitcoin seized in the 2016 Bitfinex hack).

That night, Zhong's phone led the investigator down a secret path to the early days of Bitcoin. A world where the line between hero and villain is blurred, slowly revealing its true nature.

All of this will be beyond Zhong's imagination.

When dealing with Zhong's theft case, the local police did not find the suspect. For cases related to cryptocurrency, the police obviously lack experience in handling them, so the investigation progress is slow.

So, Zhong decided to seek the help of local private investigator Robin Martinelli. This private investigator runs her own investigation company in Loganville, Georgia.

Martinelli used to be a police officer before switching to become a detective. Although she is not an expert in the cryptocurrency field, she has extensive experience in handling extramarital affairs and custody issues. Her company even appeared on "The Montel Williams Show," a popular American talk show that focused on social issues and was discontinued in 2008.

Despite undergoing amputation surgery due to illness at the time, Martinelli was still determined to help Zhong uncover the truth.

"When you wake up and find that you can't stand on your own two feet, but you still need to manage your company, you have to go out and work hard." Martinelli told reporters in CNBC's new documentary "Crypto 911: Exposing a Bitcoin Billionaire".

She first reviewed the surveillance video in the Zhong family's home. While examining the footage from the night of the incident, Martinelli discovered a thin and weak male figure.

"We can see that he is wearing a gray hat, and he is also wearing a black ski mask," said Martinelli.

This suspect seems to be familiar with Zhong's house, which makes Martinelli believe that he may be Zhong's friend, or at least someone who has heard of Zhong's Bitcoin. Through the video, Martinelli can determine the suspect's height and even the size of his hands.

Martinelli said she will monitor Zhong's friends, track them to their residences, as well as downtown bars on Broad Street and College Avenue. The detective has installed a tracker on the target's car, carefully reviewed their social media, and conducted a background check.

When she observed the friends Zhong had made in the bar, Martinelli seemed to have some criticisms of that group of people. She described these so-called friends as "very casual, insincere, and possibly taking advantage of Jimmy."

Martinelli said that as her investigation gradually focused on Zhong's circle of friends, Zhong seemed to resist her reasoning. Martinelli eventually identified a suspect, whom she believed stole 150 bitcoins from Jimmy. At the time, the market value of these bitcoins was close to $600,000.

However, when she expressed her opinion to Zhong, he didn't want to listen.

"Whenever I mention to him that someone in his circle knows where the money is, he gets very angry," said Martinelli. She also understands that Zhong would feel hurt by the betrayal of those close to him.

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

Despite Martinelli's disappointment with Zhong's group of friends, she is increasingly fond of this client. She thinks Zhong is a strange person who craves friendship.

"Jimmy is a good person," she said.

Not only this private detective, but many locals also have similar feelings towards Zhong.

In the years before the theft occurred, Zhong was known for his extravagant spending in town. He was the kind of person who would pay for the entire bar's drinks, and a few hundred dollars worth of alcohol was nothing to him.

According to court documents reviewed by CNBC, although Zhong lives in an inconspicuous small house off campus, close to student dorms and downtown university bars, he also frequents luxury hotels such as the Ritz-Carlton, the Plaza Hotel, and the Waldorf, and shops at high-end stores such as Louis Vuitton, Gucci, and Jimmy Choo. Luxury cars like Tesla are also his standard. In addition, he purchased a second house with a dock on the lake in Gainesville, Georgia, not far from Athens. The residence also has jet skis, boats, stripper poles, and lots and lots of alcohol.

His life is indeed very "legendary".

Zhong was arrested and brought to justice.

During further investigation, investigators learned more about this special Mr. Zhong. In the encryption industry, he is regarded as an "OG" - Original Gangster, referring to a veteran figure who entered the encryption circle very early and gained respect.

Investigators have found that as early as 2009, the year Bitcoin was introduced, Zhong was one of the early developers dedicated to developing and improving this encryption technology. McAleenan said that compared to other OG players who later became famous in the Bitcoin community, his contribution was relatively small. However, the investigators' conclusion is that Zhong did contribute to the original code of Bitcoin and made suggestions to early developers on key issues such as how to reduce the size of the blockchain.

In other words, a programmer who was once involved in Bitcoin development has become one of the most influential Bitcoin thieves in history.

McAleenan said: "He is what we call the 'crypto OG', which stands for 'crypto elder'. He can be seen as a big shot figure involved in the core development of Bitcoin. He has been deeply involved in this field for a long time."

The author of "Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money," Nathaniel Popper, said that Zhong's role in the history of Bitcoin has a certain irony, which also reflects the culture that created cryptocurrency in the first place.

Popper said in an interview with CNBC: "Everyone joins this field for their own reasons. Therefore, a diverse and quirky group of people gather here."

Popper said: "The development history of Bitcoin is always full of irony. Indeed, it is ironic that a Bitcoin supporter stole Bitcoin from another Bitcoin supporter. But I think this is also part of the definition of Bitcoin to some extent."

Zhong was charged with telecommunications fraud. After pleading guilty, he was sentenced to one year and one day in federal prison. The 33-year-old Zhong began serving his sentence on July 14, 2023, at a federal prison in Montgomery, Alabama.

In the end, Zhong did not manage to keep the Bitcoin he stole. The US government seized these assets. According to a document reviewed by CNBC, the US government has initiated a program that allows "victims" to apply to retrieve the Bitcoin they were stolen.

But no one came forward to claim it. This is understandable because in 2012, the users of the Silk Road website were mainly drug dealers and their customers. As a result, the federal government sold the stolen bitcoins and kept the proceeds. According to the US Internal Revenue Service - Criminal Investigation, some of the income may be used to reward local law enforcement for their assistance in this case.

On April 14th, after the court ruling, CNBC attempted to interview Zhong as he was leaving the courthouse to ask about his role in the case. Zhong covered his head with his jacket and left without saying a word.

Zhong stated to the judge before the verdict that owning billions of stolen bitcoins made him feel important.

Zhong's lawyer, Michael Bachner, stated that this theft did not actually cause any harm to the US government.

Bachner told CNBC: "Jimmy's actions did not cause any loss to the government. If Jimmy had not stolen these coins, the government would have confiscated them from Silk Road operator Ross Ulbricht. Then, in 2014, two years later, the government would have sold these confiscated bitcoins like any other encrypted assets."

Bachner added: "The market value of Bitcoin in 2014 was $320. So, if the government had sold these Bitcoins in that year, they would have made a profit of $14 million. But now, because Jimmy took these Bitcoins, the government will make a profit of $3 billion when they sell them again."

Due to concerns about the life of his 13-year-old dog Chad, Zhong requested to be exempt from imprisonment. Bachner said that Zhong has had a difficult life. He suffers from autism and was severely bullied in school. For many years, he found solace in an online community where he could use his computer skills.

As for the beginning of this story, which is the Bitcoin theft case that occurred in Athens in March 2019, it remains unsolved. The criminals are still at large.