China's cybersecurity agency has accused the US government of orchestrating the theft of approximately $13 billion worth of Bitcoin from a Chinese mining operation, marking Beijing's latest effort to blame Washington for major cyberattacks. The Chinese National Computer Virus Emergency Response Center claims the December 2020 theft of 127,272 Bitcoin from the LuBian mining pool represents a state-sponsored operation, citing the methodical movement of the stolen cryptocurrency as evidence of government involvement rather than typical criminal activity.
Key Information Regarding the Theft
- •The December 2020 theft from LuBian Bitcoin mining pool ranks among the largest cryptocurrency heists in history, with the stolen Bitcoin now valued at approximately $13 billion.
- •US prosecutors charged Cambodian business executive Chen Zhi in October with wire fraud and money laundering, alleging he used illicit funds to operate large-scale crypto mining operations including LuBian.
- •The Department of Justice filed a civil forfeiture complaint seizing 127,271 Bitcoin linked to Chen's operations, representing the largest such action by US authorities.
Chinese Officials Point to US Involvement
The Chinese government's accusation centers on what it characterizes as suspicious handling of the stolen cryptocurrency. According to a report published last week by the Chinese National Computer Virus Emergency Response Center, the delayed and careful movement of the Bitcoin suggests coordination at a government level. The agency described the operation as "black eats black," a Chinese idiom referring to criminals turning on each other, but applied here to alleged state-level hacking.
LuBian once operated as one of the world's largest Bitcoin mining facilities before the theft occurred in December 2020.
The Chinese report connects the stolen Bitcoin directly to cryptocurrency later confiscated by US authorities. Federal prosecutors now link those assets to Chen Zhi, chairman of Cambodia's Prince Group conglomerate, who faces multiple charges in New York.
US Prosecution and Forfeiture Action
An Oct. 8 indictment filed in federal court in New York charges Chen with orchestrating a wire fraud conspiracy and operating a money laundering scheme. Prosecutors allege Chen and associates laundered illicit proceeds by channeling them into large-scale cryptocurrency mining operations, including LuBian. The indictment states that addresses associated with LuBian "received large sums of cryptocurrency from sources unrelated to new mining."
Federal prosecutors declined to comment on how or when they obtained control of the Bitcoin.
The Department of Justice's civil forfeiture complaint seeks permanent seizure of 127,271 Bitcoin. Chen remains outside US custody, according to prosecutors who unsealed the indictment last month.
Matthew L. Schwartz, Chen's attorney and chairman of Boies Schiller Flexner, filed a letter with the court Monday requesting additional time to trace the stolen Bitcoin.
Schwartz called the government's allegations "seriously misguided". "As we explained in our submission to the Court, we are working closely with cryptocurrency experts to trace the Bitcoin that the government seized over a year ago, and which was stolen back in 2020," Schwartz said in a statement.
Pattern of Cyber Accusations
China has intensified its accusations of US hacking campaigns in recent months. Earlier this year, Chinese officials claimed the US exploited vulnerabilities in Microsoft Exchange servers to target Chinese companies. Last month, the government stated it possessed "irrefutable evidence" of a US cyber attack against China's National Time Service Center.
Chinese allegations typically lack the detailed forensic analysis sometimes included when US agencies attribute hacking operations to foreign adversaries. The accusations tend toward broad characterizations rather than technical evidence. Representatives for the Department of Justice and the Chinese embassy in Washington did not respond to requests for comment.
Escalating Cybersecurity Tensions
The dispute over the Bitcoin theft highlights escalating tensions between Washington and Beijing over cybersecurity issues. With Chen fighting the charges from outside US custody and China framing the case as state-sponsored theft, the legal battle over the seized cryptocurrency could extend for years.