China’s cybersecurity agency has formally accused the United States of playing a “key role” in one of the largest known Bitcoin thefts, triggering a fresh round of geopolitical tensions and questions around attribution, digital‑asset forensics and cross‑border law enforcement.
CoinDesk
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The Economic Times
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The Allegations
According to the China National Computer Virus Emergency Response Center (CVERC), a state‑backed cyber watchdog, the case centres on the December 2020 hack at China’s now‑defunct LuBian Mining Pool, which lost around 127,000 BTC—then valued at approximately US$3.5 billion, and now worth roughly US$13 billion‑plus.
Decrypt
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CVERC’s technical report claims that the hack was carried out by a “state‑level hacking organisation” and that the stolen bitcoin were controlled by the U.S. government for over a year before being formally seized.
CoinDesk
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Beijing argues that the U.S. seizure—executed by the United States Department of Justice (DOJ)—was in fact a takeover of hacked assets rather than a standard criminal forfeiture.
Coinpedia Fintech News
U.S. Position and Forensic Gaps
The U.S. maintains that the seizure was lawful: the funds were tied to a fraud‑scheme headed by Cambodian business figure Chen Zhi and have been frozen as criminal proceeds.
The Economic Times
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However, blockchain analysts highlight that public‑ledger trails for the wallets in question remain ambiguous, attribution to hacking campaigns is complex, and no definitive proof exists that the U.S. government initiated the hack.
CryptoSlate
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Implications for Crypto and Diplomacy
Beyond the technical and forensic uncertainties, this dispute has broader consequences:
Crypto markets: The frozen 127,000 BTC represent about 0.65% of Bitcoin’s total supply—raising concerns about price volatility should movement or enforcement actions change.
The Economic Times
Cyber diplomacy: China’s public call‑out reflects increasing use of crypto incidents as tools in diplomatic signalling, especially amid strained U.S.–China relations.
Legal and regulatory frameworks: The case underscores weak international coordination around digital‑asset seizure, transparency and state involvement—raising the stakes for crypto regulation globally.
Why the Dispute Matters
For China, the allegations raise questions about sovereign protections of domestic crypto‑assets and mining infrastructure, and they reinforce Beijing’s narrative of U.S. dominance in cyber‑law enforcement. For the U.S., the accusations could prompt scrutiny of how crypto seizures are conducted, how transparent they are, and how they interact with global norms on sovereign cyber operations.
Next Steps and Uncertainties
At this stage, much remains unclear:
Independent forensic verification: Open‑source analysts are still unable to trace conclusively the origin of the hack or the full chain of custody for the assets.
Legal clarity: If China pursues diplomatic or legal challenge, the case could test international norms around jurisdiction, property rights in crypto and state‑sponsored hacking allegations.
Market reaction: Should the wallets move, or should enforcement change, crypto markets may respond sharply.
Conclusion
China’s allegation that the U.S. government played a role in one of the biggest Bitcoin hacks ever reported adds a new layer of complexity to both the crypto‑ecosystem and international relations. While the technical evidence remains contested, the dispute highlights growing intersections between cyber‑crime, state power and digital assets. As the world watches, the case may prompt deeper scrutiny of how crypto‑assets are governed, how theft and seizure are attributed, and how states interact in the emerging digitised financial frontier.
