The United States now holds 324,780 bitcoins. How did they accomplish that?

What Happened?

Yesterday, the United States Department of Justice unsealed an indictment that charged UK/Cambodian national Chen Zhi with wire fraud conspiracy and money laundering conspiracy. Zhi, the chairman of Prince Holding Group, stole billions from individuals around the world via a "pig butchering scheme" -- a long-term investment fraud where scammers develop a relationship with a victim to build trust before convincing them to invest large sums of money in a fake cryptocurrency or Forex platform. Zhi is also charged with leading Prince Group's forced-labor compounds across Cambodia; he is not in custody and remains at large.

The move is a monumental step against human trafficking and crypto fraud. A civil forfeiture complaint against 127,271 bitcoins was filed, and the funds are now in custody of the U.S. government. The BTC stack, valued currently at about $15 billion, is the largest seizure in the history of the Justice Department. 

The scheme promised investors profit generation, if they sent BTC to the fraudsters. Needless to say, millions were tricked out of their sats. Social media messaging platforms were used to communicate with victims of the scam. Hundreds of workers were trafficked and forced to work in compounds around Cambodia, under the threat of violence, to perpetrate and operate the fraudulent scheme. If convicted, the defendant is facing a maximum of 40 years in prison.

If you ask me, the real victims here are those folks that were forced to labor in this fraud. The DOJ describes the compounds as "housed vast dormitories surrounded by high walls and barbed wire, and functioned as violent forced labor camps." It's hard to imagine something like that; sounds like pure horror. A penalty of 40 years in prison doesn't sound like enough.

Not The First U.S. Seizure of Bitcoin

Recent seizures of crypto by the U.S. government:

• Over 50k BTC were seized from James Zhong in November 2021. He had stolen them from the Silk Road dark web market
• $1 billion worth of BTC was seized from the defunct Silk Road marketplace in November 2020
• In August 2020, approximately $2 million worth crypto was recovered by the DOJ from accounts used to fund terrorist organizations

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