Michaela
China’s state-backed cyber defense agency, the National Computer Virus Emergency Response Center (CVERC), has alleged that the United States played a key role in the 2020 multi-billion-dollar hack of the Chinese Bitcoin mining pool LuBian, raising questions over how the U.S. gained access to more than 127,000 of the stolen Bitcoin (BTC).
Key points:
- China’s CVERC claims the U.S. played a key role in the 2020 LuBian Bitcoin hack, raising questions about how 127,000 BTC was accessed.
- The stolen Bitcoin remained dormant for years, suggesting the theft may have been a coordinated operation by a state-backed entity rather than typical hackers.
- The case spotlights challenges for global authorities in monitoring, seizing, and securing cryptocurrency, fueling debate over state involvement in cybercrime.
A technical analysis from CVERC was released weeks after the U.S. government filed a civil forfeiture complaint for 127,271 BTC, valued at roughly $13.1 billion, in a criminal case against Chen Zhi, founder of Prince Group, who reportedly owned the Bitcoin held by LuBian prior to the hack. The breach, which took place in December 2020, only came to public attention in August when Arkham reported it as the largest Bitcoin theft on record.
“Strangely, after being stolen, this huge amount of Bitcoin remained dormant in a Bitcoin wallet address controlled by the attackers for four years, almost untouched,” the CVERC wrote. This clearly does not conform to the typical behavior of hackers eager to cash out and pursue profits; it seems more like a precise operation orchestrated by a “nation-state hacking organization,” the agency added.
According to the CVERC, the stolen Bitcoins were not moved to a new wallet until June 2024, where they have reportedly remained untouched since. On October 14 the U.S. Department of Justice (DOJ) filed criminal charges against Zhi and seized 127,000 Bitcoins from him and his Prince Group.
The timing and handling of the assets have raised questions, with some suggesting that the U.S. government may have gained access to the Bitcoins well before the formal seizure, potentially pointing to a coordinated operation by a state-backed hacking entity.
Arkham data shows that on July 5, 2024, nearly the entire balance of a wallet identified as “LuBian.com Hacker,” totaling 120,576 BTC, was transferred in a single transaction to an address labeled “US Government: Chen Zhi Seized Funds.”
Furthermore, the CVERC noted that the prolonged inactivity of the stolen Bitcoin prior to the U.S. seizure is highly unusual for typical hackers, who usually move quickly to monetize their gains. The agency suggested that the pattern points to a carefully coordinated operation, likely carried out by a state-sponsored hacking organization.
The case adds another layer to the ongoing debate over state involvement in cybercrime and cryptocurrency security, emphasizing the challenges regulators and international authorities face in tracking and controlling digital assets on a global scale.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
