China Alleges U.S. Operated Covert Bitcoin Seizure Scheme
A years-old cyber mystery involving the disappearance of over 127,000 Bitcoin from LuBian, once a major Chinese mining pool, has reignited tensions between Beijing and Washington.
China’s national cyber defense agency now claims the United States may have played a hidden role in what it calls one of the most significant digital asset seizures in history.
A Forgotten Hack Resurfaces
The LuBian theft occurred in December 2020 but remained largely unnoticed until blockchain analysts at Arkham Intelligence exposed the event this August, calling it the biggest Bitcoin hack ever recorded. According to their findings, 127,272 BTC—worth roughly $14.5 billion today—vanished from LuBian-controlled wallets and stayed untouched for nearly four years.
That long dormancy, according to China’s National Computer Virus Emergency Response Center (CVERC), is at the heart of the mystery. The agency’s latest forensic report suggests that the dormant funds’ eventual transfer to a wallet labeled “US Government: Chen Zhi Seized Funds” points to something far more coordinated than a typical cybercrime.
The Seized Bitcoin Trail
CVERC’s investigation found that in July 2024, nearly the entire stash—around 120,000 BTC—was moved in a single transaction to an address reportedly managed by the U.S. government. This occurred months before American prosecutors formally announced a civil forfeiture case against Chinese billionaire Chen Zhi, founder of Prince Group, whose assets were tied to LuBian.
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While the Department of Justice later confirmed it was holding the funds as part of the largest crypto-related forfeiture in U.S. history, China’s cybersecurity experts claim the government had already seized the Bitcoin long before any court filing. “The timeline doesn’t add up,” CVERC said in its report, adding that such precision “resembles a state-backed operation rather than a conventional hack-for-profit.”
Beijing’s Growing Suspicion
The report implies that U.S. authorities could have accessed LuBian’s wallets well before the public learned about the case, an accusation that, if true, would mark an unprecedented instance of state-level cyber intervention in the crypto sector. Analysts in China argue that this casts doubt on the transparency of U.S. law enforcement actions involving digital assets.
Adding a human dimension to the saga, blockchain data shows that Chen Zhi and his team attempted to contact the hacker multiple times by sending microtransactions—each worth roughly $23—to the compromised wallet, pleading for the Bitcoin’s return. Those messages, embedded in the blockchain itself, went unanswered.
A Geopolitical Undercurrent
The LuBian saga has now evolved into a geopolitical flashpoint. While the U.S. insists its forfeiture was lawful and tied to criminal investigations, Chinese commentators see it as evidence of a broader digital confrontation. According to Arkham, the LuBian-linked Bitcoin represents nearly 40% of all holdings currently tied to U.S. government wallets.
The debate comes amid renewed attention to crypto policy from both sides. During a recent interview, U.S. President Donald Trump claimed the country was “far ahead of China and everybody else” in cryptocurrency adoption, while acknowledging that Beijing was “getting into it in a very big way.”
As accusations fly, the LuBian case has become a symbolic battleground in the race for control over the global digital economy—a reminder that in the new era of geopolitics, Bitcoin itself can be both an asset and a weapon.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
