Overview
- China’s cybersecurity agency CVERC released a report alleging a U.S. state-level operation stole roughly 127,000 BTC from the LuBian mining pool in December 2020, calling it a “black-eats-black” scheme.
- The U.S. Department of Justice rejects the accusation and says the Bitcoin was lawfully seized as criminal proceeds linked to Chen Zhi, who is charged over a large-scale fraud and money-laundering network.
- Blockchain firms including Arkham, Elliptic and TRM traced mid-2024 movements of the long-dormant LuBian coins into wallets labeled as U.S. government–controlled, preceding the DOJ’s October 14 forfeiture filing.
- TRM Labs told Decrypt the funds originated from 25 unhosted wallets controlled by Chen as of 2020 and noted an insider-theft theory in filings, while saying there is no public proof yet of how U.S. authorities obtained wallet control.
- Chen’s lawyer Matthew L. Schwartz said he is working with experts to trace the coins and called the government’s claims against his client “seriously misguided,” as analysts warn the dispute is fueling a diplomatic flashpoint with potential market repercussions.