Ray William Johnson: True Story Podcast - College Student Steals $3 Billion in Bitcoin - The Jimmy Zhong story

Episode Date: February 16, 2025

Jimmy Zhong steals 50,000 Bitcoin which ends up being worth $3.4 billion dollars.

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But all that's about to change because he's about to be worth $3 billion. Now Jimmy, he's 22 years old. He's a college student in Georgia studying computer science. He's also just kind of an awkward dude. He's never really been a popular guy and he really wants friends. And one day, things start to change for him. because he gets involved early on in developing Bitcoin. And at some point, he obtains some of it and he stores it on this new dark web marketplace called Silk Road.

A few years later, in 2012, he goes to the Silk Road site to withdraw all of his Bitcoin, and that is when something crazy happens. He accidentally double clicks the withdrawal button, and suddenly, bam, he gets back twice the amount he was trying to withdraw. It seems to be some sort of glitch that gives him double his money. back. So Jimmy's looking at this like fucking jackpot and he decides to exploit this glitch hard. And over the next few days he creates multiple accounts and deposits more Bitcoin tokens and quickly withdraws them using this double click method. So he's basically just doubling his money over and over again. And pretty quickly he steals more than 50,000 Bitcoin,

which at this time in 2012 is worth around $600,000. $600,000 is a lot of money to any much less a college student like Jimmy. And now, for the first time in his life, he's got some money, and he's going to try to use it to make some friends. And so he starts going out to local bars, buying shots for everyone. He's renting nice hotel rooms, shopping at Gucci, he's suddenly driving a Tesla. Then he goes and buys a new house out on the lake. And here's some actual pictures of his house.

And this house has a bar in it, and it's stocked with alcohol, and it even has a stripper pole. A stripper pole! And suddenly, wouldn't you know it, everyone wants to hang out with Jimmy. Now he's a popular guy. And so he starts throwing these crazy parties for everyone. Here he is, partying with two women. Here he is, partying with two other women. And so after all this time, old Jimmy finally has some friends.

And this new lifestyle of his continues for years. And you would think he would run out of money spending it like this, but no. Because as the years go by, the value of crypto, crypto skyrockets and so the value of his coin keeps going up and up and by 2018 his stash is worth around an estimated 200 million dollars 200 million dollars and jimmy he wants to keep his friends around so he doesn't mind sharing the wealth with them like one time he takes them all on a private jet to fly to watch a college football game and he pays for all of it and here's a a picture of him and his friends at the game, he even gives each friend $10,000 to go on a

shopping spree in Beverly Hills. $10,000 a friend. And apparently he wants to impress people so bad that he keeps a suitcase full of cash in his room. And he'll like show it to the women that he parties with, hoping that they'll like him and be his girlfriend. Of course, none of them do. Now obviously his friends know that he has money and they definitely ask him about it. But he He doesn't tell them that he stole it. No, no, he tells them that he's a successful crypto investor, and so that's just what they believe. But whatever, he has money, he's surrounded by people who like him, and none of them would ever screw him over. Until.

One day, Jimmy leaves on a trip. And while he's gone, someone, it's presumed to be one of his friends, someone breaks into his house. And this is actually surveillance footage of that break-in. Then sometime later, Jimmy gets home and he discovers that he'd been robbed and this burglar took $400,000 cash and 150 Bitcoin. Because I guess he had physical versions of his Bitcoin and they knew it was there and they stole it. And so he calls the police to come investigate. But it's a burglary so police don't really do anything and the case ends up going cold. But old Jimmy, he isn't going to let this go.

And so he hires a local private investigator to look into it. And so she starts investigating and she immediately gets suspicious of Jimmy's friends and she starts low-key following them around, stalking their socials, and conducting background checks on them. Until she finally feels like she's figured out which one of them broke into his house and ripped him off. But apparently when she tells Jimmy, Jimmy doesn't believe her. I mean, he trusts his friends too much, but he doesn't want to give them up. And so he and the private investigator, they decide to go their separate ways, and his burglary case remains open. Meanwhile, the IRS criminal investigation unit,

they've been investigating a hack on the Silk Road. Not Jimmy's glitch Bitcoin heist from all those years ago, but a completely different hack. And during that investigation, they also happened to notice that back in 2012, 50,000 Bitcoin were taken by someone, some unknown person. They don't know who.

So they start investigating this and following this trail, and they can see, see transactions that lead back to an exchange, but they don't know whose account it is. But then Jimmy transfers around $800 where the Bitcoin to that exchange, and it requires him to enter his name and his address. So now the IRS criminal investigation unit knows that the 2012 Bitcoin thief is Jimmy. And now they're going to go after him. And so, boom, they put together a little sting operation. And one day these agents suddenly show up to Jimmy's house, sort of undercover. And they pretend they're investigating the burglary where his Bitcoin and cash were stolen.

And since that burglary investigation was never closed, it makes sense to Jimmy why they're still investigating it. And so, Jimmy invites these agents into his place. And he's super nice to them, and he seems to love that they're there. Because remember, he really wants friends. You guys get this sold, I'm going to invite y'all up for a beer whenever I want. And so he's totally just chilling with these agents, like they're his boys. He even tells them how he used to keep a suitcase full of cash around and that he'd show it to women hoping to get laid. You know, I was trying to impress this girl back then.

Did it work? Nope. Oh, they never does. Never does. And the agents, they just keep charming him, pretending to be his friend. And he brings them down to his basement, he shows them his bar and his stripper pole. Is this your workout? Nope.

That's for the girls. Okay. Nice. Now, these agents, they have to have a sense that Jimmy is a lot. lonely guy because they keep talking to him and they keep charming him. And finally, they get him on the topic of Bitcoin. And they're like asking him to explain it and they're asking him how long he's been involved in it. And he ends up opening up his laptop and showing them one of his crypto wallets filled with a shi ton of Bitcoin, like $60 or $70 million worth. And visually seeing this

wallet with their own eyes ends up being all the evidence these agents need. And so they leave. And later, they come back with a search warrant, and boom, they bust in and raid his house. And eventually, bam, they arrest him. Here's his mugshot. It was one of the biggest mysteries in crypto. Who stole 50,000 bitcoins, which would ultimately be worth more than $3 billion? Yeah, at the time of Jimmy's arrest, his bitcoin was worth $3.4 billion. Oh my God.

But at the end of it all, he cooperates with police. He forfeits all of his bitcoin. and he takes a plea deal, and ultimately he's sentenced to about one year in prison. Now, this is just a guess, but I'm willing to bet that none of those friends he was partying with, the ones he gave $10,000 to go shopping, I'm willing to bet that none of them went to visit him in prison, and that none of them are around now, now that he's not worth $3 billion or whatever. That's just a guess.