China Alleges the U.S. Hacked $15 Billion in Bitcoin From Chen Zhi as the Accused Scam Kingpin Fights the Record Seizure in Court
The Chinese government has accused the United States of orchestrating a cyberattack to seize roughly $15 billion in Bitcoin from Chen Zhi, the Cambodian-Chinese businessman U.S. prosecutors say ran one of Asia’s largest online scam empires. The dispute has sharpened tensions between Beijing and Washington and raised hard questions about cybersecurity, cross-border law enforcement, and who ultimately controls a record-breaking pile of seized cryptocurrency.
Who is Chen Zhi and What Are the Allegations Against Him?
Chen Zhi, the 38-year-old founder and chairman of Cambodia’s Prince Holding Group, is accused of building a sprawling cyberfraud operation behind a public image of business success and philanthropy. U.S. prosecutors allege he directed at least 10 forced-labor compounds across Cambodia where trafficked workers were coerced into running cryptocurrency investment-and-romance schemes — the so-called “pig-butchering” scams — defrauding victims worldwide, including more than 250 Americans, with one reportedly losing $400,000 in crypto. Authorities say the network laundered its proceeds through more than 100 shell companies tied to real estate, gambling, banking, aviation, and crypto mining. In October 2025, the U.S. and U.K. jointly sanctioned 146 individuals and entities linked to Prince Group, the largest coordinated action ever taken against cryptocurrency-enabled fraud.
What Led to the Seizure of $15 Billion in Bitcoin?
On October 14, 2025, the U.S. Department of Justice unsealed an indictment charging Chen with wire fraud and money laundering conspiracy and announced the seizure of 127,271 Bitcoin — worth roughly $15 billion at the time, the largest forfeiture in DOJ history. The civil forfeiture action was filed by the U.S. Attorney’s Office for the Eastern District of New York alongside the Justice Department’s National Security Division. Notably, the indictment ties those exact coins to Bitcoin that had vanished from the LuBian mining pool years earlier, an acknowledgment that sits at the center of China’s counter-narrative. (wired.com)
How Did China Respond to the Bitcoin Seizure?
In November 2025, China’s National Computer Virus Emergency Response Center (NCVERC) published a technical report alleging the U.S. government was behind a December 2020 cyberattack on the LuBian Bitcoin mining pool that drained roughly 127,000 coins. Its central argument: the stolen Bitcoin sat completely dormant for nearly four years before moving to new wallets in mid-2024, a pattern the agency said does not match ordinary criminal behavior and instead points to a “state-level hacker operation.” Blockchain-intelligence firm Arkham Intelligence later tagged the destination wallets as U.S.-government-controlled, and Chinese state media leaned in hard — Beijing Daily branded the affair “black eating black,” accusing Washington of seizing the funds with no mention of repaying global victims while posing as a “global police.” (business-standard.com)
How Did the LuBian Bitcoin Actually Disappear?
Independent blockchain analysis has filled in much of the technical picture. According to Elliptic, LuBian — a mining operation with infrastructure in China and Iran that once controlled almost 6% of global Bitcoin mining — lost about 127,000 BTC in late December 2020, worth roughly $3.5–4 billion then, because of a weakness in the algorithm it used to generate cryptographic keys that left the wallets vulnerable to brute-force attacks. In the days after the breach, LuBian spent more than $40,000 broadcasting hundreds of on-chain transactions to the attacker’s wallets carrying an embedded plea: “Please return our funds, we’ll pay a reward.” Chinese state media says Chen posted over 1,500 such messages and bounty offers. Nothing was ever returned. The coins stayed frozen in place until mid-2024, when they finally moved — the shift that ultimately surfaced in U.S. custody.
What Is the Current Status of Chen Zhi?
On January 7, 2026, Cambodia extradited Chen to China at Beijing’s request, after revoking his Cambodian citizenship by royal decree in December 2025. Chinese state broadcaster CCTV aired footage of a hooded, handcuffed Chen being escorted off a plane in Beijing alongside two other Chinese nationals, Xu Jiliang and Shao Jihui. China’s Ministry of Public Security described him as the “ringleader of a major cross-border online gambling and fraud criminal syndicate” and said he had been placed under “compulsory criminal measures,” with wanted notices to follow for other key members. (apnews.com)
How Has the U.S. Responded to China’s Accusations?
Washington has still not publicly answered China’s specific claim that it hacked the LuBian wallets, and the DOJ indictment does not explain how investigators obtained the private keys — a silence that has fueled ongoing speculation. U.S. authorities maintain only that the seized Bitcoin represents the proceeds of fraud and money laundering and that the forfeiture followed established legal procedures. The case has since moved into a contested legal phase: in early 2026, Chen’s defense team — which includes the prominent litigation firm Boies Schiller Flexner and former federal prosecutors — asked a U.S. federal court to throw out the forfeiture, arguing the coins are legitimate revenue from industrial-scale mining rather than scam proceeds and that the government’s chain of on-chain evidence is incomplete or misinterpreted. Analysts note a procedural wrinkle: under the Fugitive Disentitlement Doctrine, a court can bar someone evading jurisdiction from using its resources to contest a seizure — but once a defendant is in custody, as Chen now is, that bar dissolves, opening the door to a fight on the merits. (cryptonomist.ch)
What Does This Mean for Victims and the Future of Cryptocurrency Security?
The human cost is easy to lose amid the geopolitical sparring. The U.S. Treasury estimates Southeast Asian scam operations stole at least $10 billion from American victims in the past year, and while the seized hoard could in theory fund restitution, Washington has announced no compensation plan. The value of the coins has also swung sharply with the market: initially pegged near $14–15 billion, the 127,271 BTC was worth roughly $8.8 billion by March 2026, underscoring how volatile any eventual recovery will be. The episode exposes deep vulnerabilities in the crypto ecosystem — weak key generation, the ease of laundering through “clean” mined coins, and the murky question of how states themselves acquire and hold seized assets — and it is likely to set precedent for how courts handle massive cross-border crypto hoards.
In the end, China’s allegation that the U.S. effectively hacked $15 billion in Bitcoin from Chen Zhi has layered a state-versus-state cyber dispute on top of an already tangled criminal case. With Chen now in Chinese custody, a forfeiture battle underway in U.S. courts, and thousands of scam victims still awaiting any restitution, the contest over who controls the coins — and how they were obtained — is far from settled.
