A headline like “China Accuses U.S. of stealing 127,000 BTC” is built to explode across crypto Twitter and mainstream feeds alike. It fuses geopolitics, jaw-dropping on-chain numbers, and a mystery straight out of a cyber-thriller. But what actually happened to those 127K Bitcoin? Who really owned the coins, how did they move, and why is Washington now controlling one of the largest single BTC troves in history?
In mid-October 2025, U.S. authorities said they had seized roughly 127,271 BTC—worth about $14–15 billion at the time—from wallets tied to an alleged criminal network linked to Chen Zhi and the Prince Holding Group operating out of Cambodia. It was billed as the largest crypto forfeiture action in American history and pushed the government’s Bitcoin holdings to the mid-300K range, depending on the day’s price action.
Around the same time, independent blockchain researchers and analytics firms resurfaced a different but intersecting narrative: the still-murky 2020 LuBian mining pool hack in which 127,426 BTC vanished, the largest BTC theft ever by current valuation. Investigators have tied many of the addresses in question to LuBian, raising thorny questions about how that stash flowed and who ultimately controlled the keys before the U.S. stepped in.
Against this backdrop, Chinese-language media discussions and social posts erupted with claims that Washington had “stolen China’s Bitcoin.” While that rhetoric is splashy, the public record shows a more complicated picture—one that mixes on-chain forensics, criminal forfeiture, and the opaque corporate and political connections of a now-defunct mining pool. This article unpacks the story carefully, separating the provocative accusation from the documented facts, and explaining what it means for Bitcoin, crypto policy, and U.S.–China tech rivalry.
The 127K BTC Number Why It Keeps Showing Up
The figure ~127,000 BTC appears again and again because two major threads converge around it:
The DOJ’s record seizure tied to Chen Zhi
The U.S. Department of Justice and U.S. Treasury described a sweeping action against a transnational scam network allegedly orchestrated by Chen Zhi, with the government asserting control over 127,271 BTC. Coverage by mainstream and crypto media alike called it a record, putting U.S. holdings north of $36 billion worth of Bitcoin at the time.
2020 LuBian mining pool heist
Separately—but in ways that appear connected—Arkham Intelligence and other researchers mapped 127,426 BTC stolen from the LuBian mining pool over December 28–29, 2020. The theft allegedly exploited weak key generation and forced LuBian’s disappearance not long after. By 2025, the stash had appreciated to ~$14.5 billion and ranked among the largest single BTC hoards tracked on-chain.
Multiple outlets have since reported that the addresses listed in U.S. filings overlap with, or are traceable to, the LuBian cluster, blurring lines between “funds stolen from LuBian” and “funds seized from Chen-linked operations.” That blurring has fueled competing narratives about who stole whom—and who had lawful claim to the coins when the U.S. finally moved.
What U.S. Authorities Say Happened
U.S. prosecutors describe a massive, years-long fraud enterprise—including “pig-butchering” schemes and human trafficking ties—laundering proceeds through mining and shell companies. In this telling, the 127K BTC were proceeds of crime, therefore subject to forfeiture under U.S. law. That’s why the coins landed in government custody, not because Washington “stole” them from China, but because a court process and seizure warrants determined they were illicit assets. Mainstream outlets such as CBS and WIRED framed the action as record-setting, noting earlier high-profile federal seizures (e.g., Silk Road, Bitfinex).
From the U.S. perspective, then, the story is straightforward: criminal case, traceable BTC, forfeiture. Whether or not the coins ever belonged to a Chinese mining pool is secondary; the key claim is that they became tainted through a sprawling criminal operation—therefore the state could seize and ultimately liquidate or hold them according to law and policy.
Where the “China Says the U.S. Stole It” Narrative Comes From
After the seizure news broke, Chinese-language commentary and some crypto outlets cast the move as a U.S. “grab” of assets “belonging to China,” especially if the wallets could be linked back to LuBian, a Chinese-connected pool. The rhetoric suggests a geopolitical expropriation—America taking China’s Bitcoin—rather than a legal forfeiture of criminal proceeds. In short, the accusation is a framing: if LuBian was a Chinese entity and those addresses map to LuBian, then U.S. custody equals “theft.” Researchers, however, caution that ownership and control of keys across those years isn’t publicly established in a way that supports that leap.
Two things complicate the simple “China’s Bitcoin” claim:
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LuBian’s 2020 hack means the coins left LuBian custody years before the U.S. moved. If an outside attacker ripped the keys, LuBian no longer owned the BTC after the hack.
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U.S. filings argue the coins were proceeds of crime, not the legitimate fruits of a Chinese business. If a court agrees, legal title vests with the state through forfeiture.
Thus, while the accusation resonates in political discourse, the public record supports a criminal-forfeiture narrative rather than a state-on-state asset seizure.
The LuBian Link What On-Chain Analysts Found
The LuBian mining pool surged into the global top tier in 2020 before vanishing in 2021. In August 2025, Arkham and other investigators detailed how 127,426 BTC were siphoned from LuBian in two bursts across Dec. 28–29, 2020, possibly exploiting a weak-entropy key generation flaw. That research framed the theft as the largest in crypto history by current valuation.
Shortly after U.S. authorities announced the 127K BTC action against Chen Zhi, dormant LuBian-linked wallets suddenly moved ~11,886 BTC (~$1.3B)—spurring speculation that whoever held the keys was reacting to the DOJ spotlight. Whether those movers were the original hacker, associates, or third-party opportunists remains unclear. What we do know is that several address clusters cited in public-facing analytics align with LuBian’s 2020 flows.
This is the forensic fog that fuels narratives on all sides. If the same addresses or downstream clusters tie LuBian’s stolen stash to Chen-linked operations, then both stories can be true: a Chinese pool was hacked, and U.S. authorities later seized a large portion of those very coins from criminal actors—not from China itself.
Seizure vs. Theft: Why the Words Matter
“Theft” implies unlawful taking from a rightful owner. “Seizure” implies state action against contraband or criminal proceeds under judicial process. In digital asset disputes, the words aren’t mere semantics—they define who is made whole and who gets wrecked.
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If LuBian truly lost the keys in 2020 and never regained control, then LuBian was no longer the owner of that BTC when the U.S. seized it.
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If, alternatively, LuBian or a legitimate successor somehow re-controlled the keys later (not publicly evidenced), the question would become whether those coins were untainted—which, again, the DOJ disputes.
The line between hack loot and forfeitable assets is where on-chain attribution meets legal standards. That is also where geopolitical messaging gets loudest. Calling it “America stealing China’s Bitcoin” is a political narrative; calling it a record forfeiture is the legal narrative.
The U.S. Bitcoin Hoard: How Big—and Why?
By aggregate estimates, the U.S. government now holds well over 300,000 BTC, counting prior seizures (e.g., Silk Road, Bitfinex case) and the 127K BTC tied to the Chen action. Different trackers peg the figure slightly differently depending on liquidations and market movements, but the mid-300K headline has been widely reported. The Chen-linked seizure alone was framed as ~$14–15B in Bitcoin at the time, the largest in U.S. history.
That raises a policy question: is the U.S. building a “strategic Bitcoin reserve” or simply custodying forfeited assets until they can be auctioned? Commentary in the crypto press sometimes blurs the two. Officially, the U.S. has periodically auctioned seized coins in the past; whether that continues at the same cadence is a policy choice, not a settled doctrine of “reserving” BTC for state strategy.
Did the U.S. “Steal” China’s Bitcoin?
Short answer: there’s no public evidence that the U.S. stole lawfully held Chinese state or Chinese corporate Bitcoin. The public filings and major-outlet reporting describe a criminal forfeiture. The LuBian hack complicates who had possession/ownership when, but if the coins were hack proceeds later used by a criminal enterprise, seizure is the expected legal outcome.
That’s why the “China accuses…” framing, while click-worthy, should be read as a political contention rather than a proven legal claim. It reflects outrage at seeing a China-linked BTC stash end up in U.S. custody, not a confirmed instance of state-on-state asset theft.
Why This Story Resonates Globally
A proxy for U.S.–China tech rivalry
Bitcoin is more than a price chart. It’s become symbolic infrastructure—and any narrative that one superpower grabbed the other’s digital gold will go viral. The LuBian dimension, the Chen indictment, and the DOJ action let all sides project ideological and strategic meanings onto a very technical story.
A cautionary tale for mining pools and custodians
If a top-six mining pool can be defeated by key-generation weaknesses, anyone can. The LuBian hack underscores that operational security and cryptographic hygiene are existential. Weak entropy, sloppy key management, and over-centralized control can doom even a market leader.
On-chain transparency cuts both ways
The same transparency that lets skeptics scrutinize state actions also lets law enforcement trace tainted coins across years and chains. That duality is part of Bitcoin’s power: pseudonymity is not immunity.
Market Impact: Did 127K BTC Shake the Price?
Historically, major government moves—whether seizures, wallet consolidations, or auction headlines—spark volatility. But the immediate market effect depends on expectations and liquidation timelines. In past episodes (e.g., Mt. Gox distributions), the market often priced in supply overhangs, with sell-pressure materializing only when coins hit exchanges. For the 127K BTC, traders will watch custody addresses, auction filings, and any OTC signals.
Meanwhile, wallets linked to LuBian showed activity shortly after the DOJ announcement, a reminder that headline risk and on-chain maneuvers can collide. That can spark short-term fear, but it also improves price discovery, because the market can see coins move—or not.
Compliance, Custody, and the Future of Bitcoin Forfeitures
The Chen action is a blueprint for future multi-billion-dollar forfeitures: cross-border investigations, sanctions, KYC-AML link-analysis, and address-level evidence. As forensic tooling gets better, we should expect more cases, larger seizures, and longer battles over ownership versus possession.
For exchanges and miners, the takeaway is clear:
Implement hardened key management, internal segregation of duties, just-in-time signing policies, and independent entropy sources for keygen.* Auditable custody wins trust—and may be your only defense when the next forfeiture notice lands.
Bottom Line
The story headline—“China accuses U.S. of stealing 127K BTC”—is great SEO because it captures the geopolitical drama of a record-size Bitcoin haul. But the facts on record paint a different picture: a criminal-forfeiture by the U.S., intersecting with a historic 2020 hack of a China-linked mining pool. Until there is public, adjudicated evidence that the coins were lawfully owned by a Chinese entity at the time of U.S. seizure, the charge of outright “theft” is better understood as political rhetoric than legal reality.
FAQs
Q: Did the U.S. really seize 127,000 BTC?
Yes. The DOJ announced control over ~127,271 BTC tied to an alleged criminal enterprise led by Chen Zhi, calling it the largest crypto forfeiture in U.S. history. Multiple outlets corroborated the figure and context.
Q: Is that the same BTC stolen from LuBian in 2020?
Partly overlapping clusters are likely, according to independent analyses and reporting. Arkham documented the LuBian hack at 127,426 BTC in Dec. 2020; U.S. filings list addresses that researchers connect to the LuBian cluster. That doesn’t mean LuBian still owned the coins in 2025.
Q: So did the U.S. “steal” China’s Bitcoin?
There’s no public evidence of U.S. theft from a lawful Chinese owner. The government describes a forfeiture of criminal proceeds, not a state-to-state asset grab. Claims of “theft” reflect political framing, not proven legal fact.
Q: Why did LuBian’s wallets move after the DOJ announcement?
Shortly after the seizure news, LuBian-linked wallets moved ~$1.3B in BTC after years of dormancy, likely in reaction to new legal and forensic pressure. The exact operators of those addresses remain unconfirmed.
Q: What does this mean for Bitcoin’s price and future seizures?
Large government actions become overhang narratives, but actual impact depends on whether coins hit the market. As for the future, expect more high-value seizures, tougher compliance, and improved on-chain attribution—which can both deter crime and stir controversy.
Also Read: China May Start Reopening After Winter Olympics: Top Adviser
