The theft of the 127,272 Bitcoin tokens from the LuBian Bitcoin mining pool that took place in December 2020 ranks as one of the largest crypto heists in history. — Reuters
China’s cybersecurity agency accused the American government of orchestrating the theft of about US$13bil (RM53.65bil) worth of Bitcoin, representing China’s most recent attempt to attribute major cyberattacks to the US.
The theft of the 127,272 Bitcoin tokens from the LuBian Bitcoin mining pool that took place in December 2020 ranks as one of the largest crypto heists in history. The hack is likely a “state-level hacker operation” led by the US, according to the Chinese National Computer Virus Emergency Response Center, which said the quiet and delayed movement of the stolen Bitcoin suggests a government-level action rather than typical criminal behavior.
The report, published last week, links the stolen Bitcoin from LuBian, once one of the largest Bitcoin mining operations in the world, with tokens that were confiscated by the US government, which the US said are associated with Chen Zhi, the chairman of Cambodian conglomerate Prince Group. Chen was charged by the US with engaging in a wire-fraud conspiracy and operating a money-laundering scheme in October.
In an Oct 8 indictment filed against Chen in New York, the US alleged that he and co-conspirators laundered illicit proceeds by using them to fund “large-scale” crypto mining operations including LuBian. The indictment said addresses associated with LuBian “received large sums of cryptocurrency from sources unrelated to new mining.”
Federal prosecutors of the Chen case have declined to comment on how or when they obtained control of the Bitcoin. The Department of Justice filed a related civil forfeiture complaint seizing the 127,271 Bitcoin, making it the largest forfeiture action by the US.
John Marzulli, a spokesman for Brooklyn US Attorney Joseph Nocella, whose office is handling the case against Chen and the Bitcoin seizure, declined to comment to Bloomberg.
“The US government may have already used hacking techniques as early as 2020 to steal the 127,000 Bitcoins held by Chen Zhi,” the report wrote. “This is a classic ‘black eats black’ operation orchestrated by a state-level hacking organisation.”
The Chinese government has recently become increasingly vocal in accusing the American government of hacking campaigns. Earlier this year, China said the US exploited a flaw in Microsoft Exchange servers to attack Chinese companies. Last month, the Chinese government said it had “irrefutable evidence” of a US cyber attack against China’s National Time Service Center. China’s allegations tend to be broad and lack the forensic details that are sometimes included when the US accuses a foreign adversary of hacking.
A lawyer for Chen on Monday filed a letter with a US court this week asking for more time to allow Chen to trace the stolen Bitcoin from LuBian. In his letter, attorney Matthew L. Schwartz also called the government’s allegations about Chen “seriously misguided.” Chen is not in US custody, prosecutors said when the indictment was unsealed last month.
“As we explained in our submission to the Court, we are working closely with cryptocurrency experts to trace the Bitcoin that the government seized over a year ago, and which was stolen back in 2020,” Schwartz, chairman of Boies Schiller Flexner and counsel to Chen and the Prince Group, said in a statement to Bloomberg.
Representatives for the the Chinese embassy in Washington didn’t respond to a request for comment. – Bloomberg
