China's cybersecurity department has publicly accused the US government of orchestrating the theft of approximately $13 billion in Bitcoin (BTC), straining ongoing cyber relations between the two countries, according to a recent report from Bloomberg.
China claims state-level operation
The incident in question revolves around the theft of 127,272 BTC from the LuBian Bitcoin mining pool in December 2020, making it one of the largest cryptocurrency heists in history.
China's National Computer Virus Emergency Response Center has suggested that the large-scale hack was likely a planned “state-level hacker operation” orchestrated by the United States.
The agency notes that the careful and delayed movement of stolen bitcoins indicates government involvement rather than typical criminal activity.
The report also links bitcoins from former bitcoin mining company LuBian to tokens seized by the U.S. government, which authorities say have ties to Cheng Zhi, chairman of Cambodian conglomerate Prince Group.
Chen Zhi was charged by the United States in October with participating in a wire fraud conspiracy and carrying out a money laundering scheme. In particular, details about when and how the Bitcoins were confiscated by the United States remain unclear.
The report suggests that the U.S. government may have employed hacking tactics in 2020 to embezzle 127,000 bitcoins associated with Chen Zhi, characterizing the operation as an example of a “black-eater” operation orchestrated by a state-level hacking organization.
Bitcoin confiscation fallout
Following the Justice Department's civil forfeiture of 127,271 BTC, federal prosecutors involved in the Chen case are refraining from disclosing the methods used to gain control of Bitcoin, making it the most substantial forfeiture case ever brought by the U.S. government.
Recent statements from the Chinese government highlight a growing trend of accusing the US government of involvement in hacking activities.
Earlier this year, China claimed that the United States had exploited vulnerabilities in Microsoft Exchange servers to target Chinese companies. Just last month, China claimed to have undeniable evidence of a cyberattack by the United States on its National Time Service Center.
Following this complaint, a lawyer representing Chen Zhi applied to the US court for additional time to allow him to trace the BTC stolen from LuBian. Attorney Matthew L. Schwartz criticized the government's claims against Chen as “grossly misguided.”
Schwartz, general counsel for Chen and Prince Group, said they are working with cryptocurrency experts to track down the bitcoins that were seized more than a year ago and stolen in 2020.
At the time of writing, BTC was trading at $102,550, registering a 3% loss in the 24-hour time frame.
Featured image from DALL-E, chart from TradingView.com
