China’s Cybersecurity Agency Alleges Massive Bitcoin Theft by US
In a stunning geopolitical accusation, China’s National Computer Virus Emergency Response Center (CVERC) has claimed the United States government illegally seized 127,271 Bitcoin worth approximately $13.2 billion from a 2020 mining pool hack. The allegations challenge the official narrative presented by the U.S. Department of Justice regarding the seizure of cryptocurrency assets.
The Controversial Seizure Timeline
The dispute centers around Bitcoin allegedly stolen from LuBian mining pool on December 29, 2020. According to CVERC’s technical report, the 127,272.06 BTC were taken from the pool and subsequently linked to Cambodian businessman Chen Zhi, who chairs the Prince Group.
The US Government’s Position
U.S. prosecutors have accused Chen Zhi of operating large-scale “pig-butchering” cryptocurrency scams involving forced labor and financial fraud. The Department of Justice announced the seizure of these assets in October 2024, presenting them as proceeds from criminal activities.
China’s Counter-Narrative
CVERC asserts that the U.S. government “may have already stolen the 127,000 bitcoins held by Chen Zhi through hacking techniques back in 2020,” describing the operation as a “typical ‘black-eats-black’ operation orchestrated by a state-level hacking organization.” The Chinese agency claims the addresses listed in the DOJ’s complaint correspond to those from the 2020 LuBian breach.
Blockchain Evidence and Expert Analysis
The Chinese watchdog cited analyses from blockchain intelligence firms Elliptic and Arkham Intelligence to support its claims that the seized funds originated from compromised mining operations in China and Iran. The report notes that the stolen Bitcoin remained dormant for four years before being moved to wallets tagged as U.S.-controlled in mid-2024.
Insider Theft Theory
TRM Labs, another blockchain intelligence firm, provided additional context to Decrypt. Angela Ang, head of policy and strategic partnerships for Asia Pacific at TRM Labs, noted that the DOJ forfeiture complaint suggests “an insider stole the money” from Chen’s wallets. On-chain activity indicates the next major movement occurred between June and July 2024, with funds now in U.S. government custody.
Limited Transparency in Government Seizures
Ang acknowledged limitations in understanding how U.S. authorities gained control of the wallets, stating “Right now we don’t have hard answers as to how the funds came to be in U.S. government custody, but it is plausibly connected to the earlier chain of movements.” This highlights the ongoing challenges in tracking and verifying government cryptocurrency seizures.
Geopolitical Implications and Future Developments
The allegations were first reported by the Global Times, an English-language tabloid run by the People’s Daily, the official newspaper of the Chinese Communist Party. The timing and nature of these accusations suggest escalating tensions in the digital asset space between the world’s two largest economies.
Decrypt has reached out to CVERC, the U.S. Treasury, the U.S. DOJ, Elliptic, and Arkham Intelligence for comment. The case represents one of the largest alleged cryptocurrency seizures in history and raises significant questions about international cryptocurrency regulation and state-level digital asset operations.
