China’s cyber defense agency has accused the United States of orchestrating a clandestine seizure of around 127,000 bitcoins worth roughly $13 billion, stolen in a 2020 hack of the Chinese mining pool LuBian.
Quick Summary – TLDR:
- China accuses the U.S. of taking 127,000 BTC from the 2020 LuBian hack, calling it a state-backed crypto heist.
- The U.S. Justice Department says the seizure is linked to a fraud case involving Chen Zhi and was legally justified.
- China challenges the U.S. explanation, saying the behavior of the stolen BTC suggests a government-run cyber operation.
- The clash deepens tensions over crypto policy, cybersecurity, and digital sovereignty.
What Happened?
China’s National Computer Virus Emergency Response Center (CVERC) released a detailed technical report claiming that the 127,000 BTC stolen from LuBian in 2020 eventually landed in the hands of the U.S. government. The watchdog believes the operation was not a typical crypto crime but a deliberate, state-level action. According to China, the United States did not simply seize criminal proceeds, but may have executed the theft or coordinated with those who did.
🇨🇳 China’s cybersecurity agency (CVERC) says the US seized 127,000 BTC (about $13 billion) that were stolen in a 2020 hack of the LuBian mining pool.
— Inspired Analyst (@inspirdanalyst) November 11, 2025
The coins were linked to Chen Zhi, now under US indictment for crypto fraud, and sat untouched for years before moving to… pic.twitter.com/aiKJN36yFg
The U.S. Department of Justice (DOJ), however, maintains that its forfeiture action was part of a lawful criminal case against Chen Zhi, the chairman of Cambodia’s Prince Group, who is accused of running a massive crypto fraud scheme.
Chinese Allegations and Timeline
China’s report outlines several striking details:
- The hack occurred in December 2020 but remained mostly unknown to the public until mid-2024.
- Arkham Intelligence, a blockchain analysis firm, found that 120,576 BTC were transferred in a single July 5, 2024 transaction from a wallet labeled “LuBian.com Hacker” to one tagged as “US Government: Chen Zhi Seized Funds”.
- CVERC claims the stolen BTC were dormant for nearly four years, which it says is unusual for hackers who typically rush to cash out.
- Chinese officials argue this carefully timed movement is evidence of a state-run operation, not ordinary cybercrime.
- Messages were sent by Chen Zhi’s group to the hacker wallet offering a reward for return, but no response ever came.
U.S. Position and Legal Context
The U.S. insists that the assets were lawfully seized as part of a criminal probe.
- The DOJ filed a civil forfeiture case in October 2024, claiming ownership of 127,271 BTC, describing it as the largest in U.S. legal history.
- The U.S. has not explained how it gained access to the wallet holding the stolen Bitcoin.
- China says this lack of transparency raises serious legal and ethical questions.
The Broader Implications
This dispute stretches far beyond crypto. It adds another layer to the already tense U.S.-China relationship, particularly around digital assets and cybersecurity.
- It brings up issues of digital sovereignty, as China sees this as a breach of its jurisdiction.
- It creates a precedent where state actors may be seen as players in the crypto underground.
- It reinforces the idea that nation-states can and will assert control over decentralized digital wealth when convenient.
SQ Magazine Takeaway
I think we’ve just stepped into a new chapter of the global crypto game, and it’s no longer just about criminals or developers. When China accuses the U.S. of pulling off the largest Bitcoin theft in history, it’s more than posturing. It’s a warning. Sovereign powers are now deeply embedded in the digital economy and are willing to flex muscle over blockchain-based assets. If this story holds weight, it changes everything we assumed about crypto security. Your coins might be safe from hackers, but are they safe from governments? For anyone in crypto, this is a wake-up call.
