China has alleged that the United States has unlawfully seized approximately 127,000 Bitcoin, valued at around $13 billion, that were linked to the 2020 hack of the LuBian mining pool. These claims have been framed by Chinese authorities as evidence of a US state-backed cyber operation, which they assert has taken advantage of law enforcement mechanisms to unjustly acquire these funds.
In response, the US Department of Justice (DOJ) has refuted these accusations, asserting that the Bitcoin in question was seized legally as part of an investigation into Cambodian businessman Chen Zhi. Chen is currently facing multiple allegations, including running fraudulent cryptocurrency schemes and involvement in human trafficking operations throughout Southeast Asia. Recently, the DOJ initiated a civil forfeiture case aimed at reclaiming approximately 127,271 Bitcoin, which has been valued at over $15 billion. Officials have indicated that this operation was conducted in collaboration with international partners, focusing on providing compensation to victims affected by Chen’s extensive criminal network.
China’s cybersecurity agency, the Cybersecurity Review and Emergency Response Center (CVERC), has emphasized that recent Bitcoin transfers linked to the LuBian hack occurred concurrently with the public disclosure of the DOJ’s civil forfeiture case. CVERC’s analysis casts doubt on the US’s timeline, suggesting that the transfers indicate access to the Bitcoin may have been gained well before the DOJ’s formal announcement. This timing discrepancy has become a central element in Beijing’s challenge against Washington’s narrative.
The spat over the LuBian funds has reignited concerns regarding digital asset sovereignty and the implications of cross-border cryptocurrency regulation. Experts have pointed out that the broader struggle between the US and China over Bitcoin represents a significant issue surrounding global finance, emphasizing how cryptocurrencies, as non-sovereign assets, enable nations to exert influence using their legal frameworks and technological capabilities.
The Financial Stability Board has raised alarms over considerable gaps in worldwide cryptocurrency regulation, warning that the lack of a unified governance framework has led countries to act independently for strategic advantages. China’s concerns are rooted in a long-standing apprehension regarding Western hegemony in blockchain infrastructure and financial oversight. Consequently, Beijing has been advocating for its own blockchain standards and promoting the digital yuan as a countermeasure.
On the other hand, the US has historically employed assertive enforcement strategies, illustrated by actions against notable cases like Silk Road and Bitfinex, intending to strengthen its jurisdictional claims and enhance its role in global cryptocurrency oversight. Nonetheless, critics caution that such fragmented enforcement could diminish international trust, as different major powers apply their own interpretations of justice, transforming crypto seizures into tools of geopolitical maneuvering instead of purely serving in crime deterrence.
