China’s National Computer Virus Emergency Response Center (CVERC) has publicly accused the United States government of playing a direct role in a 2020 cyber operation that resulted in the loss of roughly 127,272 bitcoin – now worth about $13 billion – from the LuBian mining pool. The allegation, published in a technical report by CVERC, escalates a months-long dispute over a record U.S. seizure of crypto assets and deepens tension between Beijing and Washington over cyber and financial jurisdiction.
What China says?
CVERC’s analysis – first summarized in Chinese state media and picked up internationally – says the December 29, 2020 breach of LuBian was carried out by a “state-level hacking organization” and that the stolen coins sat dormant for almost four years before being moved to wallets that blockchain investigators later linked to U.S. government custody.
The Chinese report calls the episode a “typical case of ‘thieves falling out’” and argues the final transfer into U.S. control indicates Washington’s direct involvement. In its technical summary, CVERC further stated that “the pattern of the intrusion and the tools used were consistent with a state-level hacking organization,” describing the U.S. possession of the coins as “evidence of state behavior rather than standard law enforcement activity.“
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U.S. enforcement and the seizure
U.S. Department of Justice (DOJ) authorities, however, refuted the allegation, saying the coins now in federal custody were lawfully seized as proceeds of an elaborate global fraud and human-trafficking scheme run by a Cambodian-linked conglomerate headed by Chen Zhi (also known as Vincent). The DOJ stated in its civil complaint that “the bitcoin now in U.S. custody are the proceeds and tools of a global fraud and money-laundering conspiracy led by Chen Zhi,” adding that “the forfeiture was a lawful enforcement action aimed at compensating victims and disrupting criminal networks.” The filing details how Prince Group allegedly laundered and obfuscated funds through mining operations and shell entities.
Key Events
- Dec. 29, 2020: LuBian mining pool reported that about 127k BTC were removed from a hot wallet in what blockchain trackers at the time labeled a major theft.
- June–July 2024: Blockchain analytics firms flagged sudden movement of the previously dormant LuBian-linked addresses; some on-chain labels later associated certain destination addresses with U.S. government seizures.
- Oct. 14, 2025: DOJ unsealed an indictment and filed a landmark civil forfeiture action for roughly 127,271 BTC, now valued in the tens of billions.
- Nov. 9–11, 2025: CVERC published its technical analysis, prompting Chinese state outlets and pro-Beijing commentators to accuse Washington of orchestrating the original hack or of seizing the coins after the fact.
Expert views and blockchain analysis
Firms such as Arkham Intelligence and Elliptic publicly traced movement of the coins and flagged links between certain wallet clusters and addresses labeled in open-source tags as associated with U.S. government seizures. Analysts, however, cautioned that on-chain labels are not definitive proof of state action. “Multiple scenarios remain plausible, including private seizure, law-enforcement hacking, or layered laundering,” one blockchain analyst told The Coin Republic.
Why the dispute matters
The disagreement is both legal and geopolitical. If China’s interpretation were accepted, it would amount to an unprecedented public accusation that the U.S. executed or benefited from a state-level cyber operation to take control of another country’s digital assets. For Washington, the seizure and forfeiture represent one of the largest crypto-asset enforcement actions in history and a high-profile attempt to use civil litigation to wrest ill-gotten gains from transnational fraudsters. The clash underscores how cryptocurrencies have become entangled with state power, cross-border law enforcement, and competing narratives about cyber sovereignty.
Market reaction and broader fallout
News of the dispute sent ripples through crypto markets and policy circles. Traders and analysts warned that prolonged diplomatic friction could complicate future cross-border enforcement, freeze coordination on cybercrime investigations, and raise fresh calls for clearer international rules governing state access to crypto assets. Some market participants pointed out that the present valuation of the seized coins multiplied many times from their 2020 value – complicates possible restitution for victims and heightens stakes for all sides.
What’s unresolved
Key questions remain unanswered: How exactly did Washington gain control of the assets it now holds? Did U.S. authorities obtain the coins through lawful forfeiture following a criminal investigation, or was there an operational hacking step at any point? Are the coins formally tied to Chen Zhi’s alleged fraud, to the original LuBian theft, or to an altogether different provenance? The DOJ filings cite wallet addresses and transactional history; the CVERC report offers a technical timeline and attribution analysis – but neither side has presented a mutually accepted forensic chain that resolves all doubts.
Responses and next steps
- Beijing: Through state media and the CVERC report, China has demanded clarification and framed the case as a sign of U.S. cyber overreach; official Chinese foreign-policy organs have signaled they will press the issue in diplomatic channels.
- Washington: U.S. prosecutors and enforcement agencies maintain the civil-forfeiture posture and continue to press criminal charges in the Eastern District of New York; DOJ spokespeople have reiterated that the forfeiture is part of a lawful effort to take down global fraud networks.
Editor’s Note
The episode is a rare and consequential intersection of cyber-attribution, on-chain forensics, and geopolitics. Whether it becomes a landmark dispute about state behavior in cyberspace will depend on whether either side produces new, verifiable technical evidence – or whether the matter is folded into broader U.S. – China tensions over tech, trade, and security. For now, the accusation itself has already become a part of the story, amplifying scrutiny of how states obtain and justify control over digital assets.
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