Did the United States plan and steal 127,000 Bitcoins from China?

A batch of as many as 127,000 Bitcoins, a mysterious tycoon based in Cambodia, and the increasingly tense standoff between the two superpowers of China and the United States—these elements intertwine to create a cryptocurrency mystery that can be described as a “Rashomon”. Recently, Chinese official cybersecurity agencies publicly accused the U.S. government of plotting and stealing this asset, while the United States insists that this is a legitimate confiscation action against transnational crime. Ultimately, who does this massive Bitcoin worth hundreds of billions of dollars belong to? What geopolitical struggles and digital sovereignty disputes are hidden behind it?

China's accusations

The trigger point of the incident originated from a technical analysis report issued by the China National Computer Virus Emergency Response Center (CVERC). The report pointed directly to the U.S. government as the mastermind behind the major Bitcoin theft case that occurred at the Chinese mining pool “LuBian” at the end of 2020.

According to the report, on December 29, 2020, over 127,000 Bitcoins were transferred from the wallet of the LuBian mining pool in just two hours. At that time, this batch of Bitcoins was worth approximately $3.5 billion, while at today's coin price, its value has soared to an astonishing $15 billion. The actual holder of these assets is believed to be Chen Zhi, the head of the Prince Group in Cambodia.

The core doubt raised by the Chinese side lies in the subsequent movements of the stolen Bitcoins. In the nearly four years since the theft, this large sum has remained almost entirely in a “dormant” state, with only a few negligible test transfers occurring, and no large-scale movement or cashing out has taken place. CVERC believes that this behavior is completely inconsistent with the logic of ordinary hacker organizations eager to cash out; rather, it resembles the actions of a “state-level hacker organization” with long-term planning and patience. They describe this incident as a typical “black eats black” or “thieves falling out,” suggesting that the U.S. government initially played the role of the “thief” by stealing the assets, and then appeared as the enforcer.

What further convinces the Chinese side of its judgment is that, according to on-chain data analysis, this batch of long-dormant Bitcoins was concentrated and transferred to multiple new wallet addresses between June and July 2024. These addresses were later explicitly marked by several blockchain analysis companies (such as Arkham Intelligence) as “U.S. Government: Chen Zhi's confiscated assets.”

Therefore, the narrative logic from the Chinese side is: the U.S. government, as early as 2020, controlled this batch of Bitcoin through hacking methods and patiently waited for several years, until 2025, when it attempted to “legalize” the “theft” actions of that year through the prosecution of Chen Zhi, completing the public occupation of the assets.

The rebuttal from the United States

However, the other side of the story is entirely different. The U.S. Department of Justice (DOJ) officially announced in October 2025 that it has filed criminal charges against Chen Zhi, the chairman of the Prince Group, and successfully confiscated over 127,000 Bitcoins.

According to the indictment by the U.S. side, Chen Zhi and the Prince Group he leads are suspected of a series of serious transnational criminal activities, including organizing large-scale telecommunications fraud (i.e., “pig butchering” scam), money laundering, forced labor, and more. The U.S. Department of Justice claims that Chen Zhi used the Prince Group and multiple layers of overseas shell companies to defraud a large number of investors, including U.S. citizens, through complex crypto assets investment plans, and laundered the illegal proceeds through mining pools such as LuBian.

Therefore, in the view of the U.S. government, this action is the largest Crypto Assets seizure case in American history, a just law enforcement operation aimed at combating global financial crime and protecting victims. The 127,000 Bitcoins that were seized are the “ill-gotten gains” of the Chen Zhi criminal group, and it is only natural to confiscate them.

Regarding how to gain control of this batch of Bitcoin private keys, the U.S. government has not disclosed specific technical details in public documents, which is usually the practice of law enforcement when handling similar cases to protect their investigative methods from being leaked. The U.S. stance is clear: this is not theft, but a legitimate asset seizure based on concrete criminal evidence.

Event Timeline

To clarify this tangled mess, it is necessary for us to review the key points of the entire event in chronological order: Spring 2020: LuBian mining pool began operations and quickly grew to become the sixth largest Bitcoin mining pool in the world. December 29, 2020: Over 127,000 Bitcoins were stolen from the wallet of the LuBian mining pool. Subsequent technical analysis indicated that this may be related to the mining pool's use of a weak random number generator to create private keys, making it susceptible to brute force attacks. 2021-2024: The stolen Bitcoins remained silent for a long time. During this period, someone (believed to be a representative of LuBian) sent messages to the hacker's address by attaching text information (OP_RETURN) in transactions, pleading for the return of funds and discussing rewards. June-July 2024: This batch of Bitcoins was massively transferred to a new address later confirmed to be controlled by the U.S. government. October 14, 2025: The U.S. Department of Justice formally prosecuted Chen Zhi and the Prince Group, announcing the seizure of this batch of Bitcoins. November 2025: China's CVERC released a report publicly accusing the U.S. government of being the mastermind behind the 2020 theft. At the same time, Chen Zhi's lawyer Matthew L. Schwartz also requested more time from U.S. courts to trace this batch of Bitcoins that were “stolen as early as 2020” and criticized the U.S. government's accusations as “seriously misleading.”

The dispute surrounding 127,000 Bitcoins has far exceeded the significance of an ordinary cybersecurity or criminal case. It has evolved into a new battleground for China and the United States in the era of digital finance.

First, it touches on the core issue of digital sovereignty. China views this move by the United States as a direct challenge and plunder of its digital asset sovereignty. In the past, sovereignty disputes were mainly concentrated in traditional areas such as territory and trade, but now, the control over global and decentralized assets like Bitcoin is becoming a new dimension of national power extension.

Secondly, this incident could have far-reaching effects on the market. If this batch of massive Bitcoins is ultimately confirmed to be part of the U.S. government's strategic reserves, it could further stimulate other countries to consider including Bitcoin in their reserve assets, thereby affecting the long-term value and scarcity of Bitcoin. However, such national-level intervention also brings uncertainty, as holding crypto assets may mean being caught in the maelstrom of great power competition at any moment.

Finally, regarding the ownership of the 127,000 Bitcoins, both China and the United States have their own claims, and the truth remains shrouded in heavy fog. Is it a case of the U.S. government engaging in a ‘black eats black’ style of state-level theft, or is it a just law enforcement action against transnational criminal organizations? Perhaps the truth lies somewhere in between, filled with complex exchanges of interests and behind-the-scenes power struggles. What is certain is that this incident marks the point at which Crypto Assets have officially escalated from the realm of personal investment and technological innovation to an important pawn in the geopolitical game between major powers. In the future, the struggle for control over digital assets is likely to intensify.