A new and serious controversy has erupted between the global powers, the United States and China, regarding cryptocurrency seizure. The China National Computer Virus Emergency Response Center (CVERC) has publicly accused the U.S. government of seizing 127,000 Bitcoins stolen in a 2020 hack. The value of these Bitcoins is approximately $13 billion based on current market prices.
China’s accusations contend that the theft of these Bitcoins was executed by a “state-level hacking organization,” and the U.S. seizure is part of a broader operation by the same group that carried out the original theft. The U.S. Department of Justice (DOJ) has immediately denied this claim, asserting that the action was a legitimate law enforcement seizure.
The 2020 Hack and the Mysterious Bitcoin Movement
The controversy originates from a large-scale crypto hack in 2020 that targeted the LuBian mining pool, which operated in China.
Chen Gi and the Initial Connection
The theft was connected to Chen Gi, the head of Cambodia’s Prince Group. Gi is currently under indictment by U.S. authorities for involvement in a massive crypto fraud scheme. Despite his initial connection to the hack, the 127,000 Bitcoins remained untouched for nearly four years.
Blockchain Monitoring
It wasn’t until mid-2024 that the stolen Bitcoins were suddenly and covertly moved to new wallets. An investigation by the blockchain analytics firm Arkham revealed that the movement of these Bitcoins led to wallets controlled by the U.S. government. The U.S. government routinely holds criminal assets seized through law enforcement in such wallets. However, the timing and movement of these Bitcoins fueled CVERC’s suspicion, leading China to accuse the U.S. of being part of the original theft chain.
China’s Accusation and the U.S. Denial
CVERC’s official statement expresses its deep suspicions regarding the U.S. action.
The Core of the Chinese Argument
CVERC’s central argument is that the Bitcoins seized by the U.S. were not simply assets recovered from criminals. Instead, they argue that the state-sponsored hacking group carried out the original theft precisely to facilitate the capture of these Bitcoins. China asserts that this was not a private criminal act but a larger intelligence operation, citing the use of advanced hacking tools. Through this, China accuses the U.S. of infiltrating and exerting control over its domestic crypto assets.
DOJ’s Firm Denial
The U.S. Department of Justice (DOJ) has immediately and firmly rejected these allegations. The DOJ reiterated that their seizure action was a legitimate law enforcement measure targeting illicit activities conducted using cryptocurrency. The U.S. has previously successfully seized billions of dollars worth of crypto assets stolen through numerous large crypto frauds and hacks. It stands by its claim that the seizure in this incident was also related to criminal proceedings.
The Impact of This Conflict
This controversy surrounding the LuBian mining pool case exposes larger international political and technological tensions beyond a simple crypto fraud.
Cyber Warfare and Sovereignty
The Bitcoin seizure controversy shows that crypto assets have now become a new flashpoint on the global Cyber Warfare battlefield. It signifies a power struggle over global control of crypto assets and Cybersecurity Sovereignty.
