The 5 Biggest Bitcoin Seizures in History

Key Takeaways

• Long believed to be completely anonymous, Bitcoin has played its part in some of the most notorious financial and cyber crimes. And it’s setting a new bar for criminal hauls.
• With the price of Bitcoin rising over the years, the value of criminally obtained Bitcoin soared. What were once crimes for millions have turned into billions. The result is some of the largest monetary seizures ever made by authorities.
• This new era of supersized-crimes and mega seizures introduced a new generation of villains ranging from hackers and digital kingpins, to eccentrics, entrepreneurs and even rappers.
• In this article, we explore the largest crypto seizures in history and the people behind them.

Bitcoin is the pioneering cryptocurrency that spurred an entire crypto ecosystem and introduced blockchain technology to regular people. With its value increasing over the past decade, we’ve witnessed some of the most significant Bitcoin seizures in financial history. 

These high-stakes confiscations, often involving law enforcement crackdowns on illicit activities, have resulted in the recovery of substantial amounts of Bitcoin. In this article, we’ll delve into the dramatic tales behind these seizures, from dark web takedowns to cyber heists.

Biggest Bitcoin seizures in history

Ross Ulbricht

The first name on our list is Ross Ulbricht who ran the notorious dark web marketplace Silk Road. The website began operating in January 2011 and quickly turned into a hub for illegal activities. Between June 2012 and October 2013, Silk Road reached a sales volume of roughly $192 million. 

The site was accessible through the Tor network and sold a range of narcotics, illegal products and services. Back then, it was still believed that using Bitcoin  made you anonymous and untraceable so the cryptocurrency was used to make transactions on the website (this myth was busted later on). Ulbricht used the pseudonym “Dread Pirate Roberts” to conceal his identity.

After many months of research and planning, the site was infiltrated by a drug agency agent who eventually became an admin. He gained crucial information about the site’s elusive kingpin in the process, eventually enabling the FBI to capture and charge Ullbricht. 

During the arrest in 2013, 144,000 Bitcoins were seized by the FBI. The assets worth with today’s price of BTC come to $8.8 Billion .

For operating Silk Road from 2011 until his arrest in 2013, Ulbricht was charged with conspiracy to launder money, conspiracy to commit computer hacking, conspiracy to traffic narcotics by the means of the internet and continuing a criminal enterprise. Ross Ulbricht is currently serving life imprisonment without the possibility of parole at the United States Penitentiary, Tucson.

In 2021, an additional 50,676 Bitcoins related to the operation of the Silk Road were discovered and seized. We’ll come back to that shortly. That brings the total to 194,676 Bitcoins  – worth approximately $11.95 Billion at today’s price. 

The confiscated Bitcoins were auctioned off by the U.S. Marshals Service, generating substantial revenue for the government.

Jimmy Zhong

The next entry on our list ties with Ross Ulbricht and features an unlikely character. A social outcast who was struggling to make friends in college, Jimmy Zhong figured that buying drugs could make him popular. That’s how he ended up on the dark web’s Silk Road. The website was operating through Bitcoin transactions and Jimmy was already deep into Bitcoin mining. A glitch on the site’s purchasing software allowed him to withdraw more funds than he initially deposited, the rest is history.  

Between 2012 and 2014, Jimmy Zhong managed to steal over 51,680 Bitcoins from the Silk Road. Zhong managed to avoid the law for nearly a decade, living a luxurious lifestyle. Surprisingly, Zhong left the majority of his ill-gotten crypto untouched – despite two major bull runs blowing up the value of his stash. 

But he made one fatal mistake on 13 March 2019, when he called 911 to report hundreds of thousands of dollars in crypto, missing from his residence. 

This call put Zhong on the authorities’ radar. In September 2019, he transferred some Bitcoin to a popular exchange, completing KYC in the process. This allowed authorities to link his small transfer back to the original huge theft. On 9 November 2021 Zhong’s house was raided and 50,676 Bitcoins were seized. 

Jimmy Zhong was convicted of wire fraud and sentenced to 1 year and 1 day but his actual crime was stealing from the Silk Road marketplace all those years ago. His sentence in Montgomery, Alabama began on 14 July 2023.

Today, the seized amount of 50,676 Bitcoins is worth approximately $3.11 billion.

Ilya Lichtenstein and Heather Morgan

Back in 2016, a sophisticated hacker infiltrated the cryptocurrency exchange Bitfinex. The perpetrators – who remained a mystery for years – stole approximately 119,756 Bitcoins. Years would pass before the hackers were eventually found out through some unusual means. 

Meanwhile, a woman under the nickname “Razzlekhan” posted numerous rapping videos in various high-profile locations around New York City. The author of these videos was no other than Heather Morgan and her husband was Ilya Lichtenstein. Ilya “Dutch” Lichtenstein was already a well-known tech entrepreneur, investing in tech startups with Marc Benioff and raising millions of dollars from famous investors like Mark Cuban. Heather Morgan assumed her rap persona Razzlekhan and was even a contributor to Forbes magazine.

The husband-wife duo, known alternatively as the Bonnie and Clyde of crypto, was eventually revealed to be responsible for the Bitfinex hack of 2016. Their fatal mistake was using some of the stolen crypto to purchase a $500 card for Walmart. Later on, the card was used to purchase goods under Morgan’s name. This misstep attracted the attention of the authorities and it wasn’t long before they were tracked down.

In February 2022, the  U.S. Department of Justice seized approximately 119,000  Bitcoin linked to the Bitfinex hack. The couple was allegedly moving the stolen funds through a complex web of transactions and accounts to obscure their origins. The couple pleaded guilty to conspiracy to commit money laundering, conspiracy to defraud the United States and Ilya Lichtenstein is now serving as a U.S. witness. He testified about using different Bitcoin mixers to conceal the stolen funds.

Today, the confiscated 119,000 Bitcoins are worth roughly $7.3 Billion.

Jian Wen

Jian Wen gained the attention of local authorities after making attempts to purchase some of the most expensive properties in London. This was quite unusual because Wen had a low paying job as a takeaway worker, declaring an income of £5,979 in the 2016/17 financial year. Despite that, the 42-year-old woman was suddenly showing interest in a Hampstead mansion with seven bedrooms and a swimming pool. This led to an investigation, which concluded with the seizure of 61,000 Bitcoins from digital wallets.

Investigators tracked the coins back to a $5 billion Chinese investment scam, which occurred between 2014 and 2017. Jian Wen wasn’t tied to the initial scam but was used as a face to launder the money. 

As part of the deal, she rented a house in Hampstead for £17,000 a month, drove a £25,000 E-Class Mercedes, bought two apartments in Dubai for £500,000 and expressed interest in other expensive properties. She was convicted of money laundering and sentenced to 6 years and 8 months in jail on 24 May 2024 with the judge saying: “I am in no doubt you came to enjoy the better things in life.”

The seized 61,000 Bitcoins are worth around $3.74 Billion.

Movie 2K

Movie2k was a platform that illegally distributed copyrighted movies, TV shows and other media content. It operated from 2008 until 2013, when the Motion Picture Association of America shut it down due to copyright infringement concerns. Throughout its five-year lifespan, the website managed to distribute over 880,000 illegal film copies

Over a decade later, in February 2024, the German police in Saxony seized 50,000 Bitcoin from one of the two former operators (a 40-year-old German and a 37-year-old Polish national) of the Movie2k platform. 

One of the operators voluntarily transferred the funds to German authorities following an extensive investigation. The two perpetrators are facing charges of money laundering, tax evasion and unauthorized commercial exploitation of copyrighted works. The Bitcoins came to be as the operators decided to invest their earnings from the website into the popular cryptocurrency.

The 50,000 Bitcoin are worth $3.07 Billion at the current price of BTC.

What happens to Bitcoin seizures?

So what happens to the cryptocurrencies after law enforcement confiscates them? Simply put, authorities sell seized Bitcoin to be put to use for the public. Once the authorities have auctioned off the crypto, the proceeds can be utilized by the respective law enforcement agencies. A legal process typically takes place before authorities can dispose of seized Bitcoin:

1. Custody and Storage: The seized Bitcoin is transferred to secure government-controlled wallets.
2. Legal Proceedings: The case goes through the judicial system to determine the rightful ownership and legality of the seizure.
3. Auction or Sale: Once legal ownership is confirmed, the government often auctions the seized Bitcoin to the public. Proceeds from these sales are usually deposited into government funds or used to support law enforcement activities.
4. Reallocation of Funds: Funds generated from the auction may be used for public purposes, including victim restitution, further enforcement actions, or other police and government expenses. So what exactly do the agencies buy with these funds? Some examples include different tactical vehicles, equipment, an armored personnel carrier and hiring a clown. You read that last one right. 

These steps ensure that the seized assets are handled lawfully and transparently.

Closing thoughts

The largest Bitcoin seizures, such as those from Silk Road, the Bitfinex hacks, and other significant operations, have had profound impacts on the cryptocurrency landscape. 

They underscore the efforts of law enforcement to combat cybercrime and reclaim illicit digital assets. These seizures also highlight the pseudonymous, transparent nature of Bitcoin, where transactions can be traced and linked back to illegal activities. 

By auctioning off the recovered Bitcoin, governments have also generated substantial revenue.With many thousands of criminally linked Bitcoin still missing, and the price continually rising, we’re sure to see more mega seizures – watch this space! 

Frequently asked questions

What’s the largest ever Bitcoin seizure?

The biggest ever Bitcoin seizure was from the Silk Road dark web marketplace. Authorities seized 194,676 Bitcoins. This is worth approximately $11.95 Billion at the current price of the world’s most famous cryptocurrency.

Is Bitcoin anonymous?

No, Bitcoin is not completely anonymous; it is pseudonymous. While Bitcoin transactions are not directly tied to personal identities, the blockchain records transaction history publicly. Anyone can view this transparent public ledger, making it possible to trace and analyze transaction flows.

Who owns the most Bitcoin?

The largest BTC holder as of 2024 is Satoshi Nakamoto, the anonymous creator of Bitcoin. Nakamoto holds around 1.1 million BTC spread across approximately 22,000 different addresses.