China's National Computer Virus Emergency Response Center (CVERC) publicly accused the U.S. of taking control of 127,000 BTC originally stolen from the LuBian mining pool in 2020.
Background of the LuBian Incident
LuBian was a mid-sized Bitcoin mining pool with about 6% of global hash rate when it suffered the breach in December 2020. Hackers exploited weak 32-bit key generation, draining more than 90% of the pool’s holdings. The coins then remained inactive for almost four years. According to Chinese sources, the attack showed a high level of coordination using sophisticated tooling. Around mid-2024, the BTC began moving through several wallets before being consolidated, attracting increased scrutiny from global blockchain analysts tracking major fund transfers.
The funds had been linked to Chen Zhi, a Cambodian business figure facing U.S. legal action for alleged crypto-related fraud. This connection provided the U.S. Department of Justice (DoJ) grounds to pursue the coins as suspected criminal proceeds. American authorities later confirmed they had taken custody of the funds in a law enforcement action, rejecting any suggestion of misconduct, while experts emphasized the importance of transparency in tracing large digital asset flows.
Growing Role of BTC Transparency
Analysis firms such as Arkham and Chainalysis tracked the coins, later identifying wallet clusters associated with the U.S. government. This case reinforces how transparent public blockchains are, allowing independent analysts to follow funds despite long dormancy and multiple transfers. The ability to trace large BTC movements is viewed positively by many in the sector, as it strengthens accountability and discourages illicit use, creating a more verifiable system for future asset recovery.
The episode also highlights contrasting approaches to digital assets. China maintains strict limits on trading and mining, while the U.S. leans on regulation and enforcement. Analysts argue that greater cooperation would benefit both nations, especially as Bitcoin gains relevance in global finance and technology.
The situation remains fluid, yet the case illustrates that Bitcoin’s open ledger can bring clarity to cross-border disputes. Supporters of digital assets note that transparent networks help foster fairness and more responsible governance when applied correctly, offering a blueprint for accountability in other cryptocurrency investigations worldwide.
The information presented in this article is for informational purposes only and should not be interpreted as investment advice. The cryptocurrency market is highly volatile and may involve significant risks. We recommend conducting your own analysis.