China Alleges U.S. Involvement in $13 Billion Bitcoin Heist, Deepening Geopolitical Rift
Tensions between China and the United States have intensified following claims from Beijing that Washington orchestrated a major cyber theft involving 127,000 Bitcoins—equivalent to around $13 billion. Chinese authorities allege that the 2020 hacking of the LuBian mining pool was not carried out by independent cybercriminals, but was in fact a state-sponsored operation orchestrated under the guise of U.S. law enforcement.
The accusation, made public by China’s National Computer Virus Emergency Response Center (CVERC), frames the event as a sophisticated cyberattack using government-grade hacking tools. According to the report, this operation culminated in the unlawful seizure of the stolen assets by American authorities in 2024. The timing and method of the asset transfer, they argue, are more consistent with covert government actions than with typical criminal activity.
The LuBian mining pool, a prominent player in the crypto mining space, suffered the massive breach in December 2020. Attackers drained over 127,000 BTC from its hot wallet. The stolen funds remained untouched for nearly four years before being quietly moved to new wallet addresses in 2024. The U.S. Department of Justice (DOJ) officially announced the seizure of the assets in October 2025, linking the funds to Chen Zhi, a Chinese-Cambodian businessman accused of operating a large-scale cryptocurrency fraud scheme.
However, CVERC disputes that narrative. The Chinese agency contends that the linkage to Chen Zhi is either fabricated or exaggerated, and that the seizure was a pretext to legitimize the earlier theft. They suggest that only a portion of the confiscated BTC can be connected to illegal activity, estimating that approximately 17,800 BTC were mined independently and another 2,300 BTC were earned through legitimate mining pool operations.
The DOJ maintains that its actions were entirely within the bounds of international law, identifying the seizure as part of an anti-money laundering initiative. It continues to assert that the forfeiture was based on evidence that the Bitcoin holdings were proceeds from a criminal network allegedly operated by Chen Zhi. No U.S. agency has formally responded to China’s detailed accusations.
This dispute has transformed a major cryptocurrency asset into a flashpoint in the ongoing technological and geopolitical rivalry between the two superpowers. The 127,000 BTC in question accounts for approximately 0.65% of Bitcoin’s circulating supply. At Bitcoin’s peak price of $126,000 in October 2025, the total value of the seized assets exceeded $16 billion. Even at current market prices, the holdings remain one of the largest state-controlled Bitcoin caches in the world.
The implications extend far beyond the realm of cryptocurrency. Analysts warn that this case could signal a future where decentralized assets become strategic tools—or even weapons—in international disputes. The neutrality of cryptocurrencies, often touted as a key benefit of blockchain technology, is now under scrutiny as national governments increasingly insert themselves into the crypto economy.
The case also raises complex questions about jurisdiction and sovereignty in cyberspace. If the Chinese allegations are accurate, it would imply that a foreign government not only executed a cyberattack on a private business operating within China’s digital borders, but later used legal mechanisms to launder the act through a publicized seizure under criminal pretenses.
Legal experts highlight the growing challenge in distinguishing legitimate enforcement of financial laws from covert operations designed to destabilize rivals. The slow movement of the stolen BTC, combined with the lack of transparency surrounding the seizure, adds weight to concerns that international law may be unevenly applied when major powers are involved.
Moreover, the incident has sparked debate over the effectiveness of current international frameworks governing digital assets. As cryptocurrencies increasingly intersect with national security, the absence of binding global regulations leaves room for interpretation, exploitation, and manipulation.
In China, the case is being used to bolster calls for greater sovereignty over the country’s cyberspace and financial infrastructure. Officials have renewed efforts to decouple from Western-controlled technologies and to accelerate the development of state-backed digital currencies such as the digital yuan.
From a market perspective, the unresolved nature of the dispute has injected uncertainty into the crypto sector. Investors are closely watching for any signs of escalation, as significant movement of the seized Bitcoin could impact price stability across the ecosystem. Additionally, the political dimension of asset control challenges the perception that cryptocurrencies are immune to government interference.
As geopolitical tensions continue to mount, the LuBian case serves as a stark reminder that even decentralized technologies are not immune to the reach of state power. Whether the U.S. acted within its legal rights or overstepped international norms remains a matter of intense debate—and potentially a precedent for future conflict in the digital domain.