China has escalated a new front in the crypto policy wars, alleging the United States effectively stole 127,000 bitcoins that were originally hacked in 2020. The claim came from China’s National Computer Virus Emergency Response Center (CVERC), which framed the episode as a “state-level” cyber operation linked to the LuBian mining pool hack. U.S. outlets covering the charge say Washington counters that the coins were seized through legal processes tied to criminal probes.
The allegation, published over the weekend by Chinese state-aligned media, marks a high-stakes twist in a years-long saga involving a massive Bitcoin theft, cross-border investigations, and one of the largest crypto forfeiture cases in U.S. history. CVERC’s technical note implies the U.S. government, or actors aligned with it, used hacker-style tactics to take control of the cache and later moved to formalize possession via court actions. The Global Times amplified that framing, calling it a “typical case of ‘thieves falling out’” orchestrated by a sophisticated state-backed group.
The coins at the center of the storm
The number in dispute—roughly 127,000 BTC—traces back to the late-2020 compromise of LuBian, a once-sizable Bitcoin mining pool. Open-source blockchain analysts and investigative firms have since tied that theft to a cluster of wallets that went dormant and then sporadically moved funds in later years. In August 2025, on-chain sleuthing shared by Arkham Intelligence (and summarized by analytics shop Elliptic) spotlighted the 127,426 BTC figure and LuBian’s disappearance in early 2021, adding fuel to speculation about who held the keys and where the funds had gone.
Washington’s side: a record forfeiture case, not a heist
While Beijing’s narrative points to “theft,” U.S. sources highlight a sweeping law-enforcement push that culminated this fall in a record-breaking forfeiture action and sanctions against an alleged Southeast Asian scam empire. In mid-October, the U.S. Department of Justice said it had moved to forfeit roughly $15 billion in bitcoin—a stash of about 130,000 BTC—as part of a crackdown on “pig-butchering” fraud networks tied to the Prince Group and associated entities. Cybercrime specialists at Chainalysis and long-form reporting in WIRED documented the scope of that seizure and the multi-agency effort behind it.
Here’s the rub: the sizes overlap. Beijing’s 127K BTC claim and the DOJ’s ~130K BTC forfeiture are strikingly close, which is why this dispute is resonating. China argues the U.S. first “took” the coins and only later built legal cover; U.S. reporting frames it as the legal seizure of criminal proceeds linked to a years-long scam and money-laundering ecosystem. CoinDesk’s write-up notes that CVERC explicitly connects the disputed bitcoin to the LuBian hack and accuses the U.S. of involvement, while U.S. summaries insist the custody is law-enforcement driven.
What’s actually documented—and what isn’t
- Documented: a December 2020 theft of ~127.4K BTC from LuBian, tracked by independent researchers and later surfaced in 2025 investigations and media coverage.
- Documented: a U.S. forfeiture/seizure action for roughly 130K BTC in October 2025 tied to transnational fraud operations; details are described by Chainalysis and WIRED.
- Alleged (by China): that U.S. entities stole the LuBian coins via state-level hacking and later formalized possession through legal steps. The Global Times paraphrases CVERC’s claim and rhetoric.
- Contested: whether the coins in U.S. custody are the very same bitcoins taken from LuBian, and whether the initial U.S. role was investigative/legal from the start or something closer to “hack-on-hack,” as Beijing suggests. CoinDesk emphasizes that the accusation comes from CVERC; U.S. agencies have not characterized it that way publicly.
Why the 127K BTC dispute matters
First, the scale is enormous. At today’s valuations, that much bitcoin represents tens of billions of dollars—an amount large enough to matter for market structure, auction plans, and long-term supply dynamics if it were ever liquidated. Second, it drags crypto deeper into geopolitics: a Chinese government-linked body publicly accusing the U.S. of a state-orchestrated crypto theft is not just a technical quarrel; it’s a diplomatic one. Finally, it underscores the opacity that still surrounds major on-chain crime cases—years can pass before ownership and provenance are clarified in court, leaving room for competing narratives.
Market angle: noise or narrative?
For now, this is primarily a policy story with market implications at the margin. Headlines about mega-stashes often spark short-term volatility, but long-term impact depends on whether coins move. In earlier U.S. cases, movements from government-controlled wallets have reliably jolted trader sentiment; absent on-chain transfers or auction notices, markets may treat the dispute as headline risk rather than a structural shift.
Conclusion
- China’s CVERC accuses the U.S. of effectively stealing 127K BTC linked to the 2020 LuBian hack, calling it a state-backed operation.
- U.S. reporting points to a record DOJ forfeiture of ~130K BTC tied to Southeast Asian scam networks—described as a legal seizure, not a hack.
- Key facts remain contested, including whether the coins are the same and how the U.S. first gained control. Expect further clarity only as court records and agency statements emerge.
Until then, this is a rare case where on-chain forensics, criminal law, and geopolitics collide—another reminder that the future of digital assets won’t be shaped by code alone, but also by the courts and capitals that interpret it.