Key Points
- Chinese cybersecurity authorities allege the United States orchestrated a 2020 cyberattack on the LuBian mining pool, stealing 127,000 Bitcoin and later seizing the funds under the pretense of legal enforcement.
- The U.S. Department of Justice asserts the seizure resulted from a legitimate anti-money laundering investigation targeting Chen Zhi, a Cambodian business figure linked to crypto fraud.
- China’s National Computer Virus Emergency Response Center (CVERC) disputes the American narrative, claiming forensic evidence points to state-level hacking tools and unusual transaction patterns inconsistent with typical criminal behavior.
- Only a fraction of the seized Bitcoin, according to CVERC, originated from illicit activity; the majority reportedly came from legitimate mining or pool payouts.
- The dispute reflects rising geopolitical friction over digital assets, with Bitcoin increasingly entangled in great-power rivalry rather than functioning as neutral, borderless money.
- Valued at roughly $13.3 billion as of late 2025, the contested Bitcoin represents 0.65% of total supply—a nontrivial share capable of influencing market dynamics if liquidated or weaponized.
A Digital Heist Recast as Geopolitical Theater
In December 2020, the LuBian mining pool suffered a breach that siphoned 127,000 Bitcoin from its hot wallet. For nearly four years, these coins lay dormant across a cluster of addresses, untouched and unspent. Then, in mid-2024, they began moving—quietly, methodically—eventually culminating in a formal announcement by the U.S. Department of Justice in October 2025. American authorities declared the seizure part of an ongoing crackdown on financial crime, specifically targeting Chen Zhi, chairman of Cambodia’s Prince Group, who faces U.S. federal charges for orchestrating a large-scale cryptocurrency fraud operation.
However, China’s National Computer Virus Emergency Response Center (CVERC) offers a starkly different interpretation. According to its analysis, the original hack bore hallmarks of state-sponsored cyber capabilities, not the opportunistic tactics common among cybercriminal syndicates. The prolonged dormancy of the funds, followed by a carefully staged series of transfers just before public disclosure, suggests operational discipline more aligned with intelligence agencies than rogue actors. CVERC argues that the timing and precision of the fund movements undermine the Justice Department’s claim of spontaneous law enforcement discovery.
Conflicting Frameworks of Legitimacy
The U.S. maintains that its actions fall squarely within established legal protocols for asset forfeiture. Officials assert the Bitcoin in question flowed through wallets tied to Chen Zhi’s alleged illicit enterprise, making them subject to confiscation under anti-money laundering statutes. The seizure, in this view, represents not theft but restitution—a corrective measure to prevent criminal actors from profiting off fraud. From Washington’s perspective, the blockchain’s transparency aids rather than obstructs justice, allowing authorities to trace tainted coins across years of transactions.
China’s counterargument dismantles this legal façade. CVERC contends that only about 17,800 BTC from the seized total were mined under questionable circumstances, with another 2,300 BTC earned through regular pool rewards. The rest, the agency insists, originated from clean sources and should never have been classified as illicit proceeds. Beijing frames the episode not as law enforcement but as a calculated appropriation—a digital land grab masked by judicial procedure. In this light, the Justice Department’s narrative appears less like justice and more like strategic asset capture under the cover of legal rhetoric.
Bitcoin as a Battleground for Sovereign Influence
What began as a cybersecurity incident has morphed into a flashpoint in the broader contest between the United States and China over technological dominance. The 127,000 Bitcoin at the heart of the dispute amount to more than just financial value; they symbolize control over the infrastructure of tomorrow’s financial system. With Bitcoin valued near $126,000 in October 2025 and currently hovering around $105,000, the seized cache translates to approximately $13.3 billion—an enormous sum that could sway markets if deployed deliberately. Such holdings, especially when concentrated in state hands, challenge the foundational premise of cryptocurrency as inherently apolitical.
This case reveals a paradox at the core of decentralized finance: even assets designed to operate beyond national borders remain vulnerable to the agendas of the world’s most powerful states. When superpowers begin treating Bitcoin not as money but as leverage, its neutrality evaporates. The LuBian incident illustrates how forensic blockchain analysis, legal mechanisms, and cyber capabilities can converge to serve geopolitical ends. As nations refine their doctrines for digital asset intervention, the line between enforcement and expropriation blurs—raising urgent questions about who truly governs the future of money.
Conclusion
The dispute over the 127,000 Bitcoin stolen from LuBian and later seized by U.S. authorities transcends a simple disagreement over facts. It reflects a deeper schism in how global powers interpret sovereignty, legality, and control in the digital age. While Washington portrays its actions as routine enforcement against financial crime, Beijing sees a pattern of state-enabled appropriation cloaked in judicial legitimacy. As both nations increasingly weaponize financial infrastructure, Bitcoin’s promise of decentralization clashes with the realities of state power. The outcome of this confrontation may well determine whether digital assets can remain truly borderless—or whether they will become yet another theater for great-power rivalry.
