China vs. USA: The Bitcoin Battle

China’s National Computer Virus Emergency Response Center has released a striking report accusing the U.S. government of seizing 127,000 Bitcoin—worth roughly $13 billion—that it claims were originally stolen from the Chinese mining pool LuBian. The allegation is rapidly turning into a geopolitical flashpoint.

According to the report, the LuBian hack occurred in December 2020, when the stolen Bitcoin was valued around $3.5 billion. For several years, the funds remained untouched, only beginning to move in mid-2024 before ultimately landing in wallets that Chinese analysts now link to U.S. authorities. The U.S. Department of Justice confirmed in October 2025 that it had seized the same Bitcoin as part of an investigation, though it firmly denies China’s claim that the U.S. was behind the original theft.

Beijing argues that the long dormancy of the stolen coins suggests a state-level operation rather than typical cybercriminal activity, noting that ordinary hackers would likely have liquidated the assets quickly. Chinese officials say the scale, sophistication, and patience behind the hack indicate a government-orchestrated effort.

The DOJ, for its part, says the seizure was connected to a criminal case against Chen Zhi, head of Cambodia’s Prince Group, who was charged with running a large-scale crypto fraud and forced-labor network. The department maintains that the Bitcoin represented criminal proceeds, not the product of a state-backed hack.

Interestingly, on-chain records show that Chen Zhi reportedly sent multiple blockchain messages to the hackers pleading for the return of the funds and offering a ransom—messages that went unanswered.

The confiscated Bitcoin now makes up an estimated 39 percent of all BTC controlled by the U.S. government, according to blockchain analysis. With Donald Trump recently boasting that the U.S. is “far ahead of China” in crypto adoption, the timing of these allegations adds another layer of political tension.

Whether China has credible evidence or is simply engaging in geopolitical gamesmanship remains unclear. Still, analysts warn that this dispute could mark the beginning of a new kind of rivalry—what some are already calling a “crypto cold war” between Washington and Beijing.