China Accuses U.S. of Orchestrating $13 Billion Bitcoin Theft from Mining Pool
A diplomatic storm is brewing between two global powers over cryptocurrency. China’s National Computer Virus Emergency Response Center (CVERC) has accused the U.S. government of seizing 127,000 Bitcoin stolen in a 2020 attack on the LuBian mining pool. The accusations suggest something far more sinister than a routine law enforcement operation.
The stolen coins are now worth approximately $13 billion. CVERC released a detailed technical report indicating that the theft exhibited characteristics consistent with a sophisticated, state-sponsored operation. Chinese officials argue that the U.S. didn’t simply intercept criminal proceeds. They claim Washington orchestrated both the hack and the subsequent seizure.
LuBian Mining Pool Hack Targets Chinese Bitcoin Operations
The LuBian mining pool was breached in 2020 during China’s cryptocurrency boom. At the time, the hacked coins were tied to Chen Zhi, chairman of Cambodia’s Prince Group, who is now under U.S. indictment for allegedly running a large-scale crypto fraud scheme. The attack went largely unnoticed for years.
Chinese experts believe the LuBian hack demonstrates the use of advanced cyber tools typically accessible only to state-level actors. The stolen assets remained dormant for about four years, which does not align with the typical behavior of cybercriminals seeking profit. Most hackers move funds quickly to avoid detection and convert them to usable currency.
Over 1,500 attempts by the LuBian team to discuss the return of the bitcoins for a reward went unanswered. This silence added to suspicions that the attack was not a typical criminal operation seeking financial gain.
Blockchain Analysis Reveals US Government Control of Stolen Bitcoin
The mystery deepened in mid-2024 when the dormant funds suddenly moved. The stash was quietly transferred to new wallets. Blockchain analysis firm Arkham later tagged those wallets as belonging to the U.S. government.
CVERC stated that the timing and movement of the funds are inconsistent with a standard law enforcement seizure. The four-year dormancy period followed by sudden activation raised red flags for Chinese investigators. They argue this pattern suggests the U.S. may have controlled Bitcoin far earlier than publicly acknowledged.
The CVERC report argues this strongly suggests the same “state-level hacking organization” behind the original LuBian breach carried out a final step that transferred the coins into U.S. hands. Chinese officials characterized the situation as a “typical case of thieves falling out.”
US Department of Justice Defends Bitcoin Seizure as Legal Action
The U.S. government firmly rejects these allegations. On October 14, 2025, the Department of Justice unsealed an indictment charging LuBian’s owner, Cambodian businessman Chen Zhi, with wire fraud and money laundering in connection with a massive “pig butchering” crypto scam.
In a parallel civil forfeiture case, the DOJ announced the seizure of approximately 127,271 bitcoins linked to Chen’s fraudulent scheme. U.S. officials maintain this was a legitimate law enforcement operation targeting criminal proceeds. The seizure followed standard procedures for asset forfeiture in fraud cases.
The U.S. narrative presents the seizure as protecting victims of cryptocurrency fraud. American authorities argue they acted within legal frameworks to recover stolen funds. However, China views this explanation with deep skepticism.
Geopolitical Tensions Rise Over Digital Asset Control
This dispute goes far beyond cryptocurrency. The accusation comes amid rising friction between the U.S. and China over technology, trade, and cybersecurity. Digital assets have become another battleground in the ongoing power struggle between these nations.
The case has highlighted the double-edged nature of blockchain forensics. While blockchain technology is lauded for its transparency, it does not disclose the identities or intentions behind transactions. Blockchain analysis can track fund movements but cannot definitively prove who controls the wallets or their motivations.
This dispute unfolds against a backdrop of China’s strict stance on cryptocurrencies. In 2021, Chinese authorities banned all crypto transactions and mining operations, citing financial stability concerns, while promoting the development of its central bank digital currency.
The timing is particularly sensitive. Both nations are navigating complex economic relationships while competing for technological supremacy. This Bitcoin controversy adds fuel to existing tensions over cybersecurity and digital sovereignty.
Conclusion
The dispute over 127,000 stolen Bitcoin has escalated into a serious diplomatic incident. China accuses the U.S. of orchestrating a sophisticated hack and then legitimizing the theft through legal proceedings. The U.S. maintains it conducted a lawful seizure of criminal assets. This case demonstrates how cryptocurrency has become deeply intertwined with national security and international relations.
