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According to a recent report by Bloomberg, the cybersecurity arm of China has openly accused the US government of orchestrating the theft of approximately $13 billion in Bitcoin (BTC), adding tension to the ongoing cyber relations between the two nations.
China Alleges State-Level Operation
The incident in question revolves around the theft of 127,272 BTC from the LuBian Bitcoin mining pool in December 2020, constituting one of the most substantial crypto heists in history.
The Chinese National Computer Virus Emergency Response Center suggests that this large-scale hack was likely a planned “state-level hacker operation” orchestrated by the US.
The agency points to the discreet and delayed movement of the stolen Bitcoin as indicative of governmental involvement rather than typical criminal behavior.
The report further links the Bitcoin from LuBian, a former Bitcoin mining firm, to tokens seized by the US government, which authorities claim are linked to Chen Zhi, the chairman of the Cambodian conglomerate Prince Group.
Chen Zhi had been accused by the US of participating in a wire-fraud conspiracy and running a money-laundering scheme in October. Notably, details on when and how the Bitcoin was confiscated by the US remain undisclosed.
The narrative put forth in the report suggests that the US government might have employed hacking tactics as early as 2020 to appropriate the 127,000 Bitcoin associated with Chen Zhi, characterizing the operation as an example of a “black eats black” maneuver orchestrated by a state-level hacking entity.
Bitcoin Forfeiture Fallout
Federal prosecutors involved in the Chen case have refrained from disclosing the methods used to gain control of the Bitcoin, following the Department of Justice’s civil forfeiture complaint seizing the 127,271 BTC, which stands as the most substantial forfeiture action undertaken by the US government.
Recent statements from the Chinese government have highlighted a growing trend of accusing the American government of engaging in hacking activities.
Earlier this year, China asserted that the US exploited vulnerabilities in Microsoft Exchange servers to target Chinese companies. Just last month, China alleged that it possessed undeniable evidence of a US cyber attack on the National Time Service Center.
In response to the allegations, a lawyer representing Chen Zhi has filed a request for additional time in a US court to allow for tracing of the stolen BTC from LuBian. The attorney, Matthew L. Schwartz has criticized the government’s claims against Chen as being “seriously misguided.”
Schwartz, who serves as counsel to Mr. Chen and the Prince Group, stated that they are collaborating with cryptocurrency experts to trace the Bitcoin seized over a year ago and stolen back in 2020. T
At the time of writing, BTC was trading at $102,550, recording losses of 3% in the 24-hour time frame.
Featured image from DALL-E, chart from TradingView.com
