China Accuses US of Stealing 127,000 BTC in 2020 Hack – $13 Billion Crypto Controversy Erupts in 2025
- What's the Controversial US Seizure All About?
- The 2020 Hack: $13 Billion Gone in a Flash
- US Response: Standard Asset Seizure or Cyber Heist?
- Escalating Cyber Tensions Between Superpowers
- What This Means for Crypto Investors
- Unanswered Questions at the Heart of the Dispute
- Historical Context: Not the First Crypto Clash
- What's Next in This High-Stakes Crypto Drama?
- FAQ: China's Accusations About US Bitcoin Theft
In a shocking revelation that's rocking the crypto world, Chinese cybersecurity authorities have accused the United States government of orchestrating a massive bitcoin heist back in 2020. The alleged theft of 127,000 BTC (worth approximately $13 billion today) from Chinese mining pool LuBian has resurfaced as a major diplomatic flashpoint in 2025, with Beijing claiming forensic evidence links the stolen funds to US government wallets.
What's the Controversial US Seizure All About?
This explosive accusation comes from China's National Computer Network Emergency Response Technical Team (CVERC), which published a detailed technical report tracing the movement of stolen BTC from the 2020 hack to wallets allegedly controlled by US authorities. The report suggests this wasn't just criminal investigation work, but potentially state-sponsored cyber warfare.
The timeline shows these coins sat untouched for nearly four years before suddenly moving in mid-2024. Blockchain analysis firm Arkham Intelligence identified the destination addresses as belonging to US government entities. "The sophistication of the original hack and the four-year dormancy period before movement suggests this was a carefully planned state operation," noted a BTCC market analyst reviewing the report.
The 2020 Hack: $13 Billion Gone in a Flash
The incident traces back to November 2020 when mining pool LuBian lost over 90% of its assets in what appeared to be a devastating cyberattack. At the time, the stolen BTC belonged to Chen Zhi, president of Cambodia's Prince Group - now facing US fraud charges unrelated to this hack.
CVERC's technical analysis claims the attack bore hallmarks of "nation-state hacking tools," with digital fingerprints allegedly linking to US cyber operations. Their 85-page report includes blockchain timestamps, wallet movement patterns, and technical indicators that supposedly connect the dots to US intelligence agencies.
US Response: Standard Asset Seizure or Cyber Heist?
Washington maintains this was a legitimate seizure of criminal assets as part of their investigation into Chen Zhi's alleged fraud scheme. The Department of Justice has previously confiscated crypto in similar cases, though never on this scale.
However, China's cybersecurity experts point to troubling questions: How did US authorities obtain the private keys to wallets containing stolen coins? Why did they wait four years to MOVE them? These unanswered questions fuel Beijing's suspicions of direct US involvement in the original hack.
Escalating Cyber Tensions Between Superpowers
This accusation comes just three weeks after China alleged the NSA hacked its National Time Service Center between 2022-2024. The two nations have been trading increasingly sharp accusations about cyber operations, with China calling Washington "the greatest source of chaos in cyberspace" and the US countering that China represents "the most active and persistent cyber threat."
The timing is particularly sensitive as both nations navigate tense trade negotiations. Some analysts suggest the crypto allegations could be leverage in broader diplomatic talks. "When nation-states fight over $13 billion in Bitcoin, it's never just about the money," observed a geopolitical risk analyst at TradingView.
What This Means for Crypto Investors
For the crypto market, this high-stakes dispute creates both risks and opportunities:
- Increased regulatory scrutiny on cross-border crypto transactions
- Potential volatility as the story develops
- Growing importance of transparent blockchain analytics
- Stronger demand for decentralized custody solutions
As always with geopolitics affecting crypto markets, the BTCC research team advises maintaining a diversified portfolio and avoiding reactionary trades based on headlines. This article does not constitute investment advice.
Unanswered Questions at the Heart of the Dispute
Several critical mysteries remain unresolved in this international crypto drama:
- If this was a legitimate seizure, why didn't the DOJ announce it as they have with previous major crypto confiscations?
- How did US authorities gain access to wallets containing coins stolen from a Chinese entity?
- What explains the four-year gap between the hack and the movement of funds?
Until these questions receive satisfactory answers, the controversy seems likely to continue straining US-China relations in both cyberspace and traditional diplomacy.
Historical Context: Not the First Crypto Clash
This isn't the first time crypto has become entangled in US-China tensions. Recall the 2019 allegations about China's crypto mining dominance, or the 2021 crackdown on mining operations. Each event has shaped the geopolitical landscape of digital assets.
What makes this case different is the direct accusation of state-sponsored theft rather than just regulatory differences. The $13 billion at stake WOULD represent the largest crypto heist in history if China's claims prove accurate.
What's Next in This High-Stakes Crypto Drama?
Market watchers should monitor several developing aspects:
- Official US response to the detailed technical allegations
- Potential retaliatory measures from China
- Impact on Bitcoin's price stability
- Changes in global crypto regulation approaches
One thing's certain - as cryptocurrency becomes increasingly intertwined with national security and international relations, we can expect more complex controversies like this to emerge. The lines between cybercrime investigations, economic warfare, and diplomatic posturing are blurring in our digital asset future.
FAQ: China's Accusations About US Bitcoin Theft
How much Bitcoin was allegedly stolen?
China accuses the US of stealing 127,000 BTC in a 2020 hack, worth approximately $13 billion at current 2025 prices.
What evidence does China present?
CVERC's report includes blockchain analysis showing the stolen BTC moved to wallets identified as US government-controlled after four years of inactivity.
How does the US explain the Bitcoin seizure?
US authorities claim it was a legitimate confiscation as part of a fraud investigation against Cambodian businessman Chen Zhi.
Why is this coming up now in 2025?
The stolen coins only moved in mid-2024, triggering fresh investigations and the current diplomatic dispute.
Could this affect Bitcoin's price?
While the market has absorbed the news so far, prolonged tensions could impact investor sentiment, especially regarding regulatory risks.
