China has sparked global shockwaves after accusing the United States of orchestrating the theft of 127,000 Bitcoins, worth approximately $13 billion, in what it calls a state-sponsored cyber operation disguised as law enforcement.
Key Highlights:
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China’s CVERC (National Computer Virus Emergency Response Center) claims the U.S. masterminded the 2020 hack of the LuBian mining pool, stealing 127,000 BTC.
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The stolen coins remained dormant for nearly four years before being moved to new addresses in mid-2024, coinciding with the U.S. government’s announcement of asset seizure.
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The U.S. Department of Justice (DOJ) insists the seizure was lawful, conducted as part of anti-money laundering and asset forfeiture operations.
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China disputes this narrative, calling it an “internal showdown among thieves,” and claims only a small portion of the Bitcoins came from illicit sources.
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The 127,000 BTC represents about 0.65% of Bitcoin’s circulating supply, a volume large enough to disrupt global markets if released.
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The controversy turns Bitcoin into a new diplomatic weapon amid escalating tensions between Washington and Beijing.
Background and Allegations
In a report released on Sunday, China’s CVERC alleged that the 2020 LuBian mining pool hack was conducted using state-level cyber tools. The agency claims U.S. authorities later seized the stolen Bitcoins in 2024, disguising the move as a legitimate enforcement action.
The DOJ, however, links the seized funds to Chen Zhi, chairman of Cambodia’s Prince Group, who has been indicted for operating a massive crypto fraud network. Beijing counters that the timing and movement patterns of the coins point to U.S. involvement from the beginning.
Geopolitical and Market Impact
The accusation adds a new front to the growing U.S.–China conflict over technology and cybersecurity.
At Bitcoin’s October 2025 peak of $126,000 per BTC, the seized holdings were worth over $16 billion, making this one of the largest and most politically charged crypto controversies in history.
The U.S. has not issued an official response, while CVERC warns the incident demonstrates that “decentralized assets are no longer neutral when superpowers collide.”
