Bitcoin Updates: China Challenges Validity of US $13 Billion Crypto Seizure

China has made new accusations against the United States, claiming it played a key part in one of the most significant

thefts ever recorded—the 2020 LuBian mining pool breach. The controversy, which involves 127,000 stolen Bitcoin (currently valued at about $13 billion), has heightened friction between the countries as China’s cybersecurity authorities question the U.S. government’s right to confiscate the assets, reports.

The National Computer Virus Emergency Response Center (CVERC), an agency linked to the Chinese government, alleges that the U.S. Department of Justice (DOJ) gained possession of the stolen Bitcoin through a “state-backed hacking group” connected to the initial theft,

reports. Blockchain analysis company states the stolen Bitcoin sat untouched for nearly four years before being moved to wallets identified as U.S. government-controlled in mid-2024, reports. CVERC’s findings claim this timeline and transaction pattern are unusual for typical cybercriminals, instead pointing to a deliberate, long-term plan, reports.

The LuBian incident, which has been linked to Cambodian businessman Chen Zhi and his Prince Group, was first brought to light in 2020 but resurfaced after the DOJ filed a civil forfeiture action in October 2025 to claim the funds as proceeds from fraud,

reports. While U.S. officials describe the seizure as a standard measure against illicit assets, Chinese authorities argue it is part of a larger strategy to weaken China’s position in the crypto sector, reports.

The U.S. Treasury and DOJ have not issued public responses to CVERC’s allegations, but their official remarks stress the lawfulness of the asset seizure. “The funds are currently held by the U.S. government,” the DOJ announced, describing the move as the “largest asset forfeiture in department history,”

reports. CVERC, however, challenges this version, claiming the U.S. had already controlled the Bitcoin for over a year before the legal filing and has not explained how it obtained access, reports.

This episode highlights the increasing tension between China and the U.S. over the regulation of digital assets. While the U.S. seeks to lead in crypto oversight, China has imposed stricter rules on domestic mining and limited exports of rare-earth elements vital for technology production,

reports. The LuBian case adds a new dimension to this competition, with China using cybersecurity issues to contest U.S. authority in blockchain law enforcement.

As the world’s two largest economies engage in this high-stakes standoff, the results may influence international standards for asset recovery and government-backed cyber operations. For now, the $13 billion in confiscated Bitcoin stands as a powerful symbol in the intensifying struggle for dominance in digital finance.