LuBian Bitcoin Heist: U.S. Seizure Sparks International Dispute Over 127,000 BTC
Summary:
The U.S. government faces accusations from China regarding the 2020 theft of 127,272 BTC from the LuBian mining pool, now valued at $13.1 billion. While Chinese authorities claim the funds were lawfully mined, the DOJ asserts they originated from a Cambodian forced-labor operation. This high-stakes dispute involves national Bitcoin reserves, geopolitical tensions, and conflicting narratives about the world’s largest cryptocurrency seizure. The outcome could set precedents for state-controlled crypto assets and international blockchain forensics.
What This Means for You:
- Market volatility alert: Monitor BTC price fluctuations as this dispute could trigger sell-off fears from government holdings
- Security reassessment: Review wallet security protocols, especially for mining pools, given the brute-force vulnerability exposed in this case
- Regulatory implications: Expect stricter international crypto seizure policies following this precedent-setting case
- Verification imperative: Demand blockchain forensic evidence when evaluating large-scale crypto transactions or government claims
Original Post:
Were the 127,000 Bitcoin seized by U.S. agents actually criminal proceeds, or did they originate from the LuBian mining pool?
- Chinese mining pool LuBian started operations in the spring of 2020 and soon became the sixth-largest mining pool in the world. In February 2021, it ceased operation.
- Only in 2025, Arkham Intelligence found out that in December 2020, 127,272 BTC was stolen from the mining pool. This amount stood for 90% of all LuBian’s bitcoins.
- Later, the Department of Justice claimed these bitcoins were forfeited from the Cambodia-based forced-labor operation Price Group.
- In January 2025, Donald Trump vowed that the U.S. would never sell its bitcoins. According to Arkham Intelligence, the U.S. currently holds 326,588 BTC, including 127,272 BTC claimed by China.
Claims coming from China
In a report, amplified by Global Times and PANews, CVERC accuses the U.S. government of orchestrating a 2020 theft of over 127,000 bitcoins from the LuBian mining pool.
At the current price, these bitcoins cost over $13.1 billion, dwarfing the Bybit $1.5 billion heist conducted in March 2025. At the time of hacking, in December 2020, the stolen BTC cost over $3.5 billion, still more than in a record-breaking Bybit hack.
The DOJ report
Earlier, in October 2025, the U.S. Department of Justice claimed that the entity behind the hack is a criminal organization called Prince Group, headed by Chen Zhi.
According to the DOJ, Price Group was involved in a wire fraud conspiracy and human trafficking. In a press release, the DOJ accused Prince Group of scamming residents of the U.S. and other countries through a “pig butchering” fraud scheme.
Extra Information:
Arkham Intelligence U.S. Government Holdings – Tracks the movement of seized crypto assets including the disputed BTC. Milky Sad Research – Technical analysis of the brute-force vulnerability exploited in the LuBian hack.
People Also Ask About:
- How was LuBian hacked? Through brute-force attacks on weak private keys generated by a flawed pseudo-random number generator.
- Does the U.S. government own Bitcoin? Yes, Arkham Intelligence estimates holdings of 326,588 BTC from various seizures.
- Will China recover the Bitcoin? Unlikely without international legal cooperation given the conflicting claims.
- How does this affect Bitcoin’s price? Potential market impact if the U.S. liquidates holdings despite Trump’s pledge.
Expert Opinion:
“This case represents a watershed moment for state-controlled cryptocurrency assets,” says blockchain forensic analyst Dr. Elena Petrov. “The technical evidence of wallet vulnerabilities combined with geopolitical posturing creates unprecedented challenges for establishing provenance in high-value crypto disputes.”
Key Terms:
- Bitcoin mining pool security vulnerabilities
- U.S. government cryptocurrency seizures
- International Bitcoin dispute resolution
- Blockchain forensic investigation techniques
- State-controlled cryptocurrency reserves
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