China accuses the United States of stealing 127,000 Bitcoin from Chen Zhi

The Chinese authorities’ accusation follows a seizure by the US Department of Justice.

The LuBian Bitcoin theft

In December 2020, the theft of 127,272 bitcoins from the Chinese mining pool LuBian made a lasting impression. Carried out by highly skilled hackers, it ranks among the largest cyberattacks ever seen in the global cryptocurrency sector. At current prices, the haul is worth the staggering sum of $13 billion.

Last week, the US Department of Justice seized 127,000 bitcoins belonging to Chen Zhi, a British-Cambodian tycoon, as part of an investigation into fraud and money laundering. The assets had remained untouched for almost four years. In the wake of the seizure, China’s cyber security agency accused the US government of having masterminded the hack. Here is what is known.

A “government operation”

According to Bloomberg, China’s National Computer Virus Emergency Response Centre believes the incident was a state-level hacking operation conducted by the United States. Chinese officials argue that the discreet theft appears more consistent with government action than ordinary criminal activity.

The report is unequivocal, stating: “The US government is believed to have used hacking techniques as early as 2020 to steal the 127,000 bitcoins held by Chen Zhi. This is a classic ‘black eats black’ operation, orchestrated by a state hacking organisation.”

For now, the federal prosecutors handling the Chen Zhi case have declined to provide further details about how the bitcoins were recovered. The seizure is the largest forfeiture ever carried out in the United States.

Fresh cyberattack claims against the United States

This is not the first time that the Chinese government has accused its US rival of launching cyberattacks against its interests. Earlier this year, Beijing said that the United States had exploited a vulnerability in Microsoft Exchange servers to target domestic companies. Xi Jinping’s government has also said it possesses “irrefutable evidence” of a US cyberattack on China’s National Time Service Centre.

That said, as our colleagues point out, such claims are generally fairly vague and do not include conclusive technical evidence. It will be interesting to see how the US authorities respond, and whether this case further strains the already turbulent relationship between the two countries.