China Accuses US of $13 Billion Bitcoin Hack Plot

China alleges the U.S. government masterminded a massive $13 billion Bitcoin heist. Explore the evidence, geopolitical tensions, and potential market impact.

China's cybersecurity agency has accused the U.S. government of orchestrating the theft of about$13 billion worth of Bitcoin. The accusation is the latest attempt by China to blame a massive cyber attack on the United States.

The theft of 127,272 Bitcoin tokens from LuBian Bitcoin mining that occurred in December 2020 was one of the largest crypto thefts in history.

The hack, according to China's National Computer Virus Emergency Response Center, may have been a US-led "state-level hacker operation". 

The reason is, the movement of Bitcoin stolen secretly and delayed is more in line with government-level actions than ordinary criminal behavior.

Reports published last week linked bitcoins stolen from LuBian, once one of the world's largest Bitcoin mining operations, to US government-seized tokens, which the US said were linked to Chen Zhi, the leader of Cambodian conglomerate Prince Group.

Chen was indicted by the U.S. for his involvement in an online fraud conspiracy and money laundering operation in October. The U.S. government declined to disclose when or how the bitcoins were seized.

"The U.S. government may have used hacking techniques as early as 2020 to steal 127,000 bitcoins owned by Chen Zhi," the report said. "This is a classic 'black eats black' operation orchestrated by a state-level hacking organization."

Federal prosecutors in Chen's case declined to comment on how they gained control of the Bitcoins, after the Justice Department filed a lawsuit for the seizure of 127,271 of them, making it the largest seizure of goods by the US.

The Chinese government has recently been increasingly vocal in accusing the US government of hacking attempts. Earlier this year, China accused the US of exploiting a security flaw in Microsoft Exchange servers to attack Chinese companies.

Last month, the Chinese government claimed to have "irrefutable evidence" of a U.S. cyberattack against China's National Time Service Center. 

China's accusations tend to be broad and lack the forensic detail that is sometimes included when the U.S. accuses foreign adversaries of hacking.

On Monday, Chen's lawyers filed a letter with a U.S. Court this week asking for additional time to track down the bitcoins stolen from LuBian. In his letter, attorney Matthew L Schwartz also called the government's allegations against Chen "grossly false."When the charges were opened last month, prosecutors said Chen was not in U.S. custody.

"As we made clear in our filing with the court, we are working closely with crypto experts to track the bitcoins that the government seized more than a year ago, and those that were stolen in 2020," Schwartz, chairman of Boies Schiller Flexner and legal counsel for Chen and Prince Group, said in a statement to Bloomberg.

Representatives of the US Department of Justice and the Chinese Embassy in Washington have not yet responded to requests for comment on this report.

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