key point
In 2012, someone stole 50,000 Bitcoins from the illegal darknet market Silk Road. Over time, the value of the stolen Bitcoins soared to more than $3 billion, and for years it remained one of the cryptocurrency world's greatest mysteries.
Nearly a decade after the 2012 hack, thieves made a critical mistake that allowed IRS-CI to crack the case.
CNBC obtained never-before-seen footage showing how investigators linked the thieves to the cryptocurrency theft.
Police in Athens, Ga., home to the University of Georgia, are accustomed to college town-type crime: break-ins, bar fights and riots.
But the 911 call received on the night of March 13, 2019, was unlike any the Athens-Clarke County Police Department had ever encountered.
The man who answered the phone was 28-year-old Jimmy Chung, a local party boy and Georgia State alumnus who frequented Athens bars. He's not like the other gangsters in town - Chung is also a computer whiz with an incredibly powerful digital home surveillance system.
Now, he's calling to report a crime: Hundreds of thousands of dollars worth of cryptocurrency, he says, was stolen from his home. Thinking of the money lost, Zhong felt heartbroken.
根据 CNBC 获得的录音，钟告诉调度员：“我惊恐发作了。”
Chung declined the dispatcher's offer of an ambulance and began trying to explain the situation. "I'm a Bitcoin investor and this is like an online thing," he said.
What happened next would end a nearly decade-long manhunt and solve one of the biggest crimes of the cryptocurrency era. It would also result in the largest cryptocurrency seizure from an individual in the Justice Department’s history.
That winter night, Chung's emergency call led investigators down a long digital trail that reached back to the early days of Bitcoin and revealed the dark truth about the hackers and programmers responsible for creating the cryptocurrency. This is a world where the hero and villain swap places and may even be the same person.
Nothing will go as Zhong hopes.
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The 911 call did not identify a suspect in the burglary at Chung's home. Athens police are working on their first cryptocurrency case, and they have been unable to make progress on the case due to unfamiliarity with the shady underworld.
So Chung turned to local private investigator Robin Martinelli, who owns and operates Martinelli Investigations near Loganville, Georgia.
Martinelli 曾是一名副警长，后来成为 PI，但他远非加密领域的专家。她专门从事诉讼程序服务、欺骗配偶和监护权调查，这类调查曾让她的公司出现在“蒙特尔威廉姆斯秀”的一集中。
Martinelli recently underwent amputation surgery, allowing her to perform monitoring surgeries with the help of prosthetics.
Still, she's motivated to solve Chung's case.
"When you wake up and your feet are no longer on the ground but you still have to run a company, you have to go out and do something big," Martinelli told CNBC in an interview for the new documentary "Crypto911." ”: Exposing Bitcoin Billionaires. "
She first checked the Zhong family's reliable surveillance video archives. While reviewing footage from the night of the crime, Martinelli spotted a slender male figure.
马蒂内利说：“我们可以看出他们戴着像头罩一样的灰色头罩，但他们几乎戴着黑色的滑雪面罩。”
The suspect appeared to be familiar with the Chung family, leading Martinelli to believe he was a friend, or at least someone who had heard Chung brag about his Bitcoin stash. From the video, Martinelli was able to determine the suspect's height and even the size of his hands.
She said she began her investigation by conducting surveillance on Chung's friends, tracking them to their homes and downtown bars at Broad Street and College Avenue. She installed trackers on her cars, scrolled through social media and ran background checks.
As she watched Chung's bar friends come and go, Martinelli developed a low opinion of the group. She described them as "very, very casual, plastic, didn't really care, maybe took advantage of Jimmy a little bit."
Martinelli said Chung seemed resistant to her theory, especially as they began to follow his circle of friends. Martinelli eventually identified a suspect who she believed stole 150 Bitcoins from Jimmy. At the time, the digital currency was worth nearly $600,000.
She said Zhong didn't want to hear it.
"He gets upset when I mention that someone has to know where the cash is," Martinelli said. She also understood why Chung felt so hurt that someone close to him might betray him.
"Jimmy wanted to be loved," she said. "Jimmy wants friends."
Although Martinelli was bored by this circle of friends, she developed a passion for her client, whom she considered an oddball looking for a friend.
"Jimmy is a good guy," she said.
Many around Athens viewed him similarly.
In the years before the thefts, Chung was known for throwing large amounts of money around town. He's the kind of guy who'll buy an expensive round of drinks for the entire bar, with hundreds of dollars disappearing down eager throats in seconds.
根据 CNBC 查阅的法庭文件，尽管他住在校外一栋简陋的平房里，靠近学生宿舍和市中心的大学酒吧场所，但他还是住过高档酒店，包括丽思卡尔顿酒店、广场酒店和华尔道夫酒店。他在 Louis Vuitton、Gucci 和 Jimmy Choo 等高端商店购物。他开着豪华汽车，其中包括一辆特斯拉。他在佐治亚州盖恩斯维尔购买了第二套房子，一座带码头的湖边别墅，距离雅典只有很短的车程。他在里面装满了摩托艇、船只、脱衣舞杆和许许多多的酒。
他的派对是史诗般的。
Chung is living his best life but has no obvious source of income. As far as anyone knew, he never actually had a job. He told his friends that he got into Bitcoin early, mining thousands of Bitcoins at the technology’s inception. Chung tells people he got involved in cryptocurrency as early as 2009, the year Bitcoin was invented by the mysterious Satoshi Nakamoto and a small group of developers who connected online with the anonymous cryptocurrency creator.
No matter what Zhong does, he makes a lot of money. And he's willing to splurge.
In 2018, when his beloved Georgia Bulldogs football team won the Rose Bowl, Chung gathered a small group of friends to make the pilgrimage to Los Angeles.
“和吉米在一起真的感觉没有任何限制，”佐治亚州校友、此次旅行的朋友之一斯特凡娜·马西奇 (Stefana Masic) 告诉 CNBC。
马西奇表示，钟不仅支付了所有机票费用，还租用了一架私人飞机进行跨国飞行。他还为每位朋友提供了高达 10,000 美元的奖励，让他们在比佛利山庄罗迪欧大道上疯狂购物。他们把钱花在城市里穿的衣服、配饰和小玩意上。
“I’ve never flown on a private jet before or stayed in such a beautiful Airbnb
. It's cool because, you know, I get to experience a lot of things that I wouldn't normally get to experience. "
While Chung was in Los Angeles cheering on his team, he couldn't have known that a small team of IRS Criminal Investigation Division agents, led by officers from the same city, were painstakingly trying to solve a crime from years earlier.
What came to investigators' attention was a 2012 hack in which 50,000 bitcoins were stolen from a darknet website called Silk Road, according to court documents reviewed by CNBC. The site was one of the first cryptocurrency marketplaces, where anonymous buyers and sellers exchanged a variety of illegal materials. It's filled with drugs, guns, porn, and other things people want to keep secret.
Over the years, the value of Bitcoin stolen by Silk Road hackers has soared to more than $3 billion, according to court documents. Investigators can track the currency's location on the blockchain, the public ledger of all transactions. But they cannot see the identity of the new owner of the funds. So they watched and waited for years as hackers moved funds from one account to another, stripping some of the funds and passing some of them through cryptographic "mixers" designed to mask the source of the funds.
Finally, blockchain analytics firm Chainaanalysis was tracking digital wallets containing stolen Silk Road assets and discovered that the hackers made a small mistake. He transferred about $800 worth of funds to a cryptocurrency exchange, which followed established banking rules, including a so-called "know your customer process" that requires account holders to provide their real names and addresses.
The account was registered under Zhong’s name. The transaction occurred in September 2019, six months after Chung called 911 to report the incident to local police.
This alone is not enough to prove that Zhong is a hacker. They have to be sure.
The IRS called the Athens-Clarke County Police Department and asked for help, according to sources at both agencies. At the time, the police investigation into Chung's own criminal report had been at a standstill.
"I got a call from an IRS agent," Lt. Jody Thompson, who heads the local property and financial crimes unit, told CNBC. “He said, ‘Can I come over here and talk to you about Jimmy?’ And I was like, sure, I remember this case.”
Thompson has since joined forces with IRS-CI Special Agent Trevor McAleenan and Shaun MaGruder, CEO of cyber intelligence company BlockTrace. MaGruder’s company works with the IRS as an embedded contractor and was hired for its experience in resolving complex blockchain transactions.
Three investigators said they worked together to develop a plan. They would use subterfuge to approach Chung, telling him they were investigating a crime he had called in to mention that a thief had stolen hundreds of thousands of dollars worth of his Bitcoins.
In fact, they are investigating a crime committed by Zhong. The proceeds from this crime are now worth billions of dollars.
When the three men knocked on the door of his Gainesville lakefront home, Chung enthusiastically opened the door, according to body camera footage obtained exclusively by CNBC. He believes the police officer and two experts are there to help solve his cryptographic cold case.
"If you help me solve this problem, I'll invite you out to a party," Chung told the trio in body camera footage.
Video shows officers heaping praise on him. They called his front door "beautiful." They called his speakers "crazy" and praised his dog Chad. They asked to see the house. Body camera footage shows the men banging on stone floors, looking in closets and inspecting wood paneling. Unbeknownst to Zhong, they were searching the secret room.
Chung led investigators to his basement, which was outfitted with a full bar and stripper pole.
"Is this your workout?" McAleenan asked Chung.
"No, that's for girls," Chung replied.
随身摄像机的镜头还显示，他们仔细观察了钟的安全系统，要求他解释其每项功能。钟还被拍到向他们展示一个金属箱，他说他曾经用来存放 100 万美元现金，以便给一位女士留下深刻印象。
"Is it effective?" Lieutenant Thompson asked.
"No." Zhong said.
"Never," Thompson replied.
Law enforcement officials learned that Zhong had a flamethrower inside his house. They saw his AR-15 rifle hanging on the wall.
Mr. Magruder said Mr. Chung's sophistication was evident.
"He used the keyboard like I'd never seen anyone use a keyboard," Magruder said. "He doesn't have to use a mouse because he knows all the hot keys."
The police used the ruse to ask Zhong to open his laptop and explain how he obtained the Bitcoins in the first place. Chung sat on a couch next to investigators, entered his password and asked them to turn away while he typed.
When he opened his laptop, law enforcement could see his Bitcoin wallet.
“Look, he’s sitting right next to us with $60 or $70 million worth of Bitcoin,” MaGruder told CNBC.
证据足以让调查人员相信他们走在正确的道路上。马格鲁德告诉 CNBC，当他离开钟湖边的房子时，他心里想：“这太不可思议了。我想我们找到了我们的人。”
That first visit led investigators to obtain a federal search warrant for Chung's home, McAleenan said. On November 9, 2021, McAleenan, Magruder and Thompson returned with a large team of officers.
Before police searched the house, McAleenan had to explain to Chung that he didn't really want to help him. He tried to convict him.
“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 federally sanctioned search warrant on your house,” McAleenan said.
“他的表情有点像‘我被朋克了吗？’”麦卡利南补充道。
At that point, another officer slid a device called a "jiggler" into Chung's laptop, causing the cursor to move and allowing law enforcement to access the password-protected contents of the computer, McAleenan said.
Police swarmed in, opening every crack and hole looking for evidence. McAleenan said they found a popcorn jar with a computer containing millions of dollars worth of Bitcoin hidden in an upstairs closet.
麦卡利南说，他们使用训练有素的嗅探犬检测电子设备，发现了一个埋在地下室地砖下混凝土中的保险箱。法庭文件称，保险箱内装有贵金属、成堆的现金和加密货币早期铸造的实物比特币。他们还发现了一个装有比特币的钱包，该钱包来自 2012 年丝绸之路的原始黑客攻击。
钟被抓了
“It was late at night before we could say we succeeded,” McAleenan said. "We found the evidence we were looking for. The house lit up. I mean, every agent on the site was cheering."
As they sorted through the evidence, the agents discovered something else about the unusual Mr. Chung. In crypto slang, he’s the “original gangster,” or OG.
Investigators found that back in 2009, the year Bitcoin was invented, Chung was among a small group of early programmers working to develop and perfect the technology. McAleenan said his contributions were minor compared to some of the other OG players who later became famous in the Bitcoin community. But investigators concluded that he contributed to the original Bitcoin code and provided early developers with ideas on key topics such as how to reduce the size of the blockchain.
In other words, a hacker who was involved in the development of Bitcoin itself later became one of the biggest Bitcoin thieves of all time.
“He’s one of what we call the Original Gangsters (OGs) in terms of Bitcoin Core software developers,” McAleenan said. “He’s been at this place for a long time.”
Nathaniel Popper, author of "Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Who Tried to Reinvent Money," said Chung's role in Bitcoin's history has Ironically, this is emblematic of the culture that created cryptocurrencies in the first place.
波普尔告诉 CNBC：“每个人都出于自己的原因来到这里。” “因此，这是一群非常不拘一格、古怪的人。”
“Bitcoin has always been ironic,” Popper said. “Yes, it’s a bit ironic that one Bitcoin supporter is stealing Bitcoin from another Bitcoin supporter. But I think that’s also part of the definition of Bitcoin to some extent.”
Chung was charged with wire fraud. After pleading guilty, he was sentenced to one year and one day in federal prison. Chung, 33, begins serving his sentence on July 14, 2023, at the federal prison in Montgomery, Alabama.
In the end, Zhong failed to keep the stolen Bitcoins. The U.S. government seized the assets. Officials have launched a process that will allow victims of the hack to apply to get their Bitcoin back, according to a seizure document reviewed by CNBC.
No one came forward to claim the stolen goods. This is not surprising since Silk Road's users in 2012 were primarily drug traffickers and their clients. The federal government simply sells the stolen Bitcoins and keeps the proceeds. A portion of the proceeds may be shared with the Athens-Clarke County Police Department in recognition of local officers' assistance in the case, according to the IRS.
As he left the courthouse after the sentencing on April 14, CNBC tried to ask Chung about his role in the crime. Zhong covered his head with his coat and left without saying a word.
In his statement to the judge before sentencing, Chung said owning billions of stolen bitcoins made him feel important.
钟的律师迈克尔·巴赫纳 (Michael Bachner) 表示，这起盗窃案实际上并未损害美国政府。
巴赫纳对 CNBC 表示：“政府当然没有因吉米的任何行为而受到伤害。” “如果吉米没有偷走这些硬币，而政府实际上是从[丝绸之路运营商罗斯·乌布利希特]手中没收这些硬币，那么他们就会在两年后的 2014 年将其出售，就像出售其他硬币一样。”
At that point, Bachner said, the government "will receive $320 per coin, or approximately $14 million." "Now, because Jimmy owns them, the government has $3 billion in profits."
Chung asked not to go to jail because he feared for the fate of his 13-year-old dog, Chad. Mr. Zhong's life is difficult. Regarding the autism spectrum, Bachner said he was severely bullied in school. For years, he found comfort in an online community where he could deploy his computing skills.
至于钟吉米最初犯下的罪行——2019 年 3 月在雅典发生的比特币盗窃事件，导致他拨打了 911 电话——这一犯罪行为从未侦破。肇事者仍然逍遥法外。
Chung's dog, Chad, lives with friends.