China Alleges U.S. Behind $13 Billion Bitcoin Heist, Calls It State-Sponsored Cyber Operation
Tensions between China and the United States have taken a new turn as Beijing accuses Washington of masterminding the theft of 127,000 Bitcoin—now estimated to be worth over $13 billion—from a Chinese mining pool in 2020. The accusation, issued by China’s National Computer Virus Emergency Response Center (CVERC), paints the incident as a covert cyberattack disguised as a legitimate law enforcement operation.
According to CVERC’s report, the LuBian mining pool was infiltrated in December 2020 by actors using what the agency describes as “state-level hacking tools.” The attackers drained 127,000 BTC from LuBian’s hot wallet, after which the coins remained dormant for almost four years. Then, in mid-2024, the assets were quietly moved to new digital addresses—raising eyebrows about the nature of the operation.
In October 2025, the U.S. Department of Justice (DOJ) formally announced that it had seized the Bitcoin, justifying the action as part of a broader anti-money laundering investigation. The DOJ claimed the assets were linked to Chen Zhi, a Cambodian business magnate and chairman of the Prince Group, who faces indictment in the United States over allegations of orchestrating a large-scale cryptocurrency fraud network.
However, Chinese officials challenge this explanation, asserting that the timeline and stealthy movement of the coins are more consistent with a government-led cyber operation than with typical criminal behavior. The CVERC argues that U.S. authorities were involved from the beginning, orchestrating the hack under the guise of pursuing justice.
The report further casts doubt on the DOJ’s narrative by suggesting that only a portion of the seized funds were connected to illicit activities. According to CVERC, approximately 17,800 BTC were mined independently by LuBian, while around 2,300 BTC were earned through legitimate pool operations. The rest, they argue, were wrongfully included in the seizure.
CVERC describes the incident as an “internal showdown among thieves,” implying that the U.S. may have taken advantage of a gray legal area to appropriate a valuable digital asset pool. The agency’s framing shifts the issue from a criminal investigation to a geopolitical confrontation, where Bitcoin is no longer just a decentralized currency but a strategic asset in global power struggles.
The sheer scale of the Bitcoin involved—about 0.65% of the entire circulating supply—gives the situation added weight. With Bitcoin peaking at $126,000 in October 2025, the seized holdings briefly surpassed $16 billion before falling slightly to their current estimated value of $13.3 billion. The incident introduces a new dimension to the ongoing debate over the neutrality of cryptocurrencies in geopolitics.
While the U.S. continues to stand by its legal narrative, officials have yet to issue a direct response to China’s accusations. The DOJ maintains that the seizure was executed through proper legal channels and was part of a broader crackdown on digital financial crimes.
The timing of China’s allegations is also noteworthy. They come amid a backdrop of increasing friction between the two nations over cybersecurity, digital surveillance, and global technology dominance. The U.S. has leveled its own accusations against Chinese cyber actors in the past, making this latest claim part of a broader pattern of mutual suspicion in the digital domain.
For the cryptocurrency community, the incident serves as a sobering reminder: even decentralized assets are not immune from geopolitical manipulation. The question now arises—can Bitcoin and other cryptocurrencies truly remain neutral when caught in the crossfire between rival superpowers?
In addition to the political implications, the case also raises significant concerns about the security of large-scale Bitcoin holdings. The LuBian mining pool’s hot wallet, which was drained in the attack, appears to have lacked sufficient protection against sophisticated cyber threats. This highlights the ongoing risks faced by crypto miners and exchanges, many of which still rely on vulnerable infrastructure.
The legal ambiguity surrounding cross-border digital asset seizures also demands closer scrutiny. As cryptocurrencies operate beyond conventional jurisdictional boundaries, conflicts like this one expose the limitations of existing international frameworks. Without consistent global standards for digital asset governance, more such disputes are likely to emerge.
Furthermore, the case introduces potential market volatility. If the seized Bitcoin were to be liquidated or redistributed, it could have a measurable impact on global crypto prices. Investors and institutions are now watching closely to see whether the U.S. government intends to hold, auction, or repurpose the confiscated assets.
This incident also underscores the growing strategic value of cryptocurrencies in national security calculations. As digital assets become more integrated into financial systems, states may begin to treat them not just as economic tools but as instruments of influence and leverage.
China’s accusation may also be part of a broader narrative aimed at challenging U.S. dominance in both technological innovation and financial enforcement. By framing the incident as a state-led theft, Beijing positions itself as a victim of digital imperialism, potentially rallying other nations to question American actions in the crypto space.
As the story unfolds, the lack of a transparent, verifiable chain of custody for the Bitcoin remains a critical issue. Blockchain records may show transfers, but they don’t reveal intent or identity, leaving room for political interpretation and manipulation.
In conclusion, the alleged theft of 127,000 Bitcoin has evolved from a criminal investigation into a full-blown geopolitical dispute. As both countries dig in their heels, the incident may set a precedent for how digital assets are treated in future international conflicts. Whether this results in new regulations, diplomatic negotiations, or further escalation remains to be seen. What is clear, however, is that the battle for control over digital currencies has officially entered the global arena.