China accuses US of $13 bn Bitcoin theft, calls it state-backed hacking

China's cyber agency has accused the US of stealing $13 billion in Bitcoin from the LuBian mining pool in 2020, calling it a state-backed hack; the US has denied such allegations

China’s top cybersecurity agency has accused the US government of orchestrating one of the world’s biggest cryptocurrency thefts, worth around $13 billion in Bitcoin. The agency claims the American government directed the 2020 hack of the LuBian Bitcoin mining pool, marking China’s latest attempt to link large-scale cyberattacks to the US, Bloomberg reported.

 

According to the National Computer Virus Emergency Response Centre (NCVERC), the theft of 127,272 Bitcoin from LuBian in December 2020 was a “state-level hacker operation”. The agency said the slow and quiet transfer of the stolen coins indicated a government-backed operation, rather than a regular cybercrime.

 

Link drawn between stolen Bitcoin and US seizure

 

The NCVERC report, released last week, connected the stolen Bitcoin from LuBian, once among the world’s largest mining pools, to tokens later confiscated by the US government. US authorities said those assets were tied to Chen Zhi, chairman of Cambodia’s Prince Group, who was charged in October for wire fraud and money laundering.

 

In an October 8 indictment filed in New York, US prosecutors alleged that Chen and his associates laundered illicit funds to run large-scale crypto mining operations, including LuBian. The indictment stated that wallet addresses linked to LuBian “received large sums of cryptocurrency from sources unrelated to new mining".

 

The US Department of Justice (DOJ) has since filed a civil forfeiture complaint seizing 127,271 Bitcoin, calling it the largest-ever crypto forfeiture action by the US government. Federal prosecutors in the case declined to comment on when or how the Bitcoin was obtained, Bloomberg reported.   

 

China calls it a 'black eats black' operation

 

In its report, the Chinese cybersecurity agency alleged that US hackers had stolen Chen’s Bitcoin as early as 2020.

 

“The US government may have already used hacking techniques as early as 2020 to steal the 127,000 Bitcoins held by Chen Zhi,” the report said. “This is a classic ‘black eats black’ operation orchestrated by a state-level hacking organisation.”

 

The accusation adds to a series of recent Chinese claims of US cyberattacks. Earlier this year, Beijing alleged that Washington exploited a flaw in Microsoft Exchange servers to hack Chinese companies. In October, China said it had “irrefutable evidence” of a US cyberattack targeting the National Time Service Centre. However, analysts have noted that China’s cyberattack claims often lack detailed technical proof, unlike some of the US’s public attributions against foreign actors.

 

Chen’s legal team challenges US charges

 

Meanwhile, Chen Zhi’s lawyer has sought more time in court to trace the stolen Bitcoin connected to LuBian. Attorney Matthew L Schwartz, from Boies Schiller Flexner, argued that the government’s claims against Chen were “seriously misguided".

 

“As we explained in our submission to the Court, we are working closely with cryptocurrency experts to trace the Bitcoin that the government seized over a year ago, and which was stolen back in 2020,” Schwartz said in a statement to Bloomberg.

 

Prosecutors confirmed that Chen is not in US custody, even though the indictment was unsealed last month.