China’s Allegations Against the U.S. in LuBian Hack
In a significant development regarding cybersecurity and international relations, China’s National Computer Virus Emergency Response Center (CVERC) has published a report alleging the United States’ involvement in the massive hack of LuBian, a once-prominent Bitcoin mining pool. This incident, which took place in December 2020, only came to light recently after Arkham Analytics labeled it as the largest Bitcoin heist ever, involving 127,272 Bitcoins valued at approximately $14.5 billion.
U.S. Government’s Civil Forfeiture Complaint
The CVERC’s findings emerged shortly after the U.S. filed a civil forfeiture complaint concerning the same amount of Bitcoin in a case against Chen Zhi, the founder of the Prince Group, who is believed to have been in possession of the funds before their theft. Importantly, the U.S. government had reportedly been in custody of these assets prior to the formal forfeiture filing in mid-October. The indictment indicates that this seizure represents the most significant forfeiture action undertaken by the Department of Justice to date.
Concerns Over U.S. Control of Stolen Assets
CVERC’s analysis raises eyebrows, particularly because it claims the U.S. has not clarified how it accessed these funds, with evidence suggesting the U.S. had control over the assets for over a year. Notably, data from Arkham indicates that on July 5, 2024, nearly all the stolen Bitcoin, amounting to 120,576 BTC, was transferred to an address tied to the U.S. government. This suggests a prolonged dormancy of the stolen coins, which contradicts typical behavior expected from hackers eager to sell their stolen assets for profit.
Attempts to Recover Stolen Bitcoin
Additionally, the report reveals that Chen Zhi and the Prince Group attempted to communicate with the hacker by sending numerous microtransactions to the hacker’s address, offering rewards for the return of the stolen Bitcoin, but to no avail.
Geopolitical Implications
This incident intertwines with larger geopolitical themes, as Arkham notes that the Bitcoin associated with LuBian constitutes nearly 39% of all Bitcoin holdings (326.5 BTC worth $34.2 billion) in U.S. government-affiliated addresses at the time of Arkham’s reporting. Supporting this narrative, U.S. President Donald Trump emphasized in a recent 60 Minutes interview that the U.S. leads globally in cryptocurrency adoption, observing China’s recent increased efforts in this domain.
The unfolding story not only addresses the technical aspects of cybersecurity but also reflects the ongoing tensions and rivalry in the technological and economic landscapes between the U.S. and China.
