Event Background: The US-China Bitcoin Battle
China's official National Computer Virus Emergency Response Center (CVERC) has accused the United States of stealing roughly 127,426 Bitcoin (BTC) worth over $13 billion, tied to the 2020 LuBian mining pool hack. The theft initially netted 127,426 BTC from the pool's hot wallet in December 2020, valued at around $3.5 billion at the time. CVERC called it a 'state-level cyber theft' allegedly orchestrated by US intelligence. The US Department of Justice responded that the forfeiture action followed standard legal procedures, linking the funds to alleged crypto fraud by Chen Zhi, chairman of Cambodia's Prince Group. Analysts view this as a geopolitical standoff escalating beyond law enforcement.
The seized Bitcoin represents about 0.65% of the total Bitcoin supply. If introduced into circulation, it could tighten liquidity and potentially boost long-term valuations. Institutional demand remains robust, with Bitcoin ETFs continuing to report net inflows. According to Bitcoin Magazine Pro data, Bitcoin's price has been volatile, trading near $103,474, down 1.8% in 24 hours, with an intraday high of $107,355 and low of $104,251. In October 2025, when Bitcoin hit an all-time high above $126,000, the seized stash would have been worth over $16 billion.
The LuBian Bitcoin Hack: Private Key Vulnerability and Four-Year Dormancy
The LuBian hack occurred in December 2020, with attackers draining over 127,000 BTC from the hot wallet in under two hours. Blockchain forensic analysis suggests the breach was not a typical external hack but stemmed from weak private key generation (CVE-2023-39910), making wallets vulnerable to brute-force attacks. After the theft, the bitcoins entered a 'dormancy phase' lasting nearly four years, with no on-chain movement. In 2024, the coins were consolidated into new wallets later identified by tracking firms as controlled by the US government. Beijing sees this as evidence of a coordinated state-level operation.
The US frames the seizure as part of an anti-fraud investigation linked to Chen Zhi. The Department of Justice has filed forfeiture actions, claiming the bitcoin represents criminal proceeds. On-chain analysis shows the wallets were previously inactive and vulnerable due to poor random number generation. Technical reports, including CVE-2023-39910, confirm that weak random number generation made these wallets susceptible to brute-force attacks. This incident not only highlights security flaws in certain Bitcoin wallets but also underscores the sensitive geopolitics surrounding crypto assets in international enforcement.