In a dramatic escalation of geopolitical tensions, China’s cybersecurity watchdog has accused the United States of masterminding one of the largest cryptocurrency thefts in history—a $13 billion Bitcoin heist from a Chinese mining pool. The allegations, detailed in a report by China’s National Computer Virus Emergency Response Center (CVERC), claim that U.S. intelligence agencies orchestrated the 2020 hack of the LuBian mining pool, stealing 127,272 Bitcoin tokens. This comes amid a broader pattern of mutual accusations of cyberattacks between the two superpowers, with Bitcoin’s soaring value amplifying the stakes.

The report, released on November 9, 2025, describes the operation as a ‘black eats black’ scheme, implying a state-sponsored theft disguised as criminal activity. According to CVERC, the hackers used sophisticated techniques, including spear-phishing and exploiting vulnerabilities in the mining pool’s infrastructure. The stolen Bitcoin, now valued at over $13 billion given the cryptocurrency’s price surge to around $105,000 per coin, was allegedly funneled through various channels before being seized by the U.S. Justice Department in what Washington claims was a legitimate law enforcement action.

Unraveling the 2020 LuBian Hack

The LuBian incident dates back to December 2020, when the mining pool, once one of China’s largest, reported the theft of 127,272 BTC. At the time, the haul was worth approximately $2.5 billion, but Bitcoin’s meteoric rise has inflated its value significantly. Blockchain analytics firm Arkham Intelligence uncovered details of the heist in August 2025, revealing previously undisclosed movements of the funds. Arkham’s analysis, cited in reports by The Block, linked the stolen assets to addresses later controlled by U.S. authorities.

China’s CVERC report points fingers at a ‘state-level hacking organization,’ alleging that the U.S. used the hack to disrupt Chinese cryptocurrency operations while enriching its own coffers. The agency claims evidence from malware analysis and IP tracing implicates American entities. This narrative contrasts sharply with the U.S. position, where the Justice Department announced in 2025 that it had seized the Bitcoin as part of an operation targeting Cambodia’s Huione Group, accused of money laundering and ties to North Korean hackers.

US Counterclaims and Seizure Details

The U.S. has dismissed China’s accusations as baseless propaganda. In a statement to Bloomberg, a Justice Department spokesperson reiterated that the seizure was lawful, stemming from investigations into transnational crime. The funds were linked to scams and laundering operations facilitated by Huione, with some tracing back to the LuBian hack. ‘This was not a hack by the U.S., but a recovery of illicit proceeds,’ the spokesperson said, emphasizing compliance with international law.

Blockchain data supports the U.S. narrative to some extent. According to on-chain analysis by CoinDesk, the stolen Bitcoin moved through mixers and exchanges before surfacing in wallets associated with Huione. The U.S. seizure, announced earlier in 2025, involved cooperation with Cambodian authorities and resulted in the freezing of assets worth billions. However, China’s report challenges this, suggesting the entire chain of events was fabricated to cover a U.S.-led cyber operation.

Geopolitical Context of Cyber Accusations

This incident fits into a long history of cyber finger-pointing between Beijing and Washington. China has previously accused the U.S. of attacks on its infrastructure, including the 2023 Volt Typhoon campaign attributed to Chinese hackers by U.S. officials. As reported by The Japan Times, the LuBian allegations represent China’s ‘most recent attempt to attribute major cyberattacks to the US,’ escalating rhetoric amid trade wars and tech rivalries.

The timing is notable, coinciding with Bitcoin’s all-time high and increased global scrutiny of cryptocurrency regulation. Posts on X (formerly Twitter) reflect public sentiment, with users like those from Bitcoin Magazine highlighting the feud’s impact on market volatility. One X post noted, ‘Bitcoin feud: China has accused the U.S. of seizing 127,000 Bitcoin worth $13 billion from a 2020 mining pool hack,’ capturing the online buzz and fears of regulatory fallout.

Impact on Cryptocurrency Markets

The accusations have rattled crypto markets, with Bitcoin dipping slightly to $105,026 amid uncertainty. Economic Times reported that the dispute ‘freezes 0.65% of Bitcoin’s supply,’ potentially shaking investor confidence. Market analysts fear heightened tensions could lead to stricter U.S. regulations or Chinese crackdowns, affecting global trading volumes. ‘The BTC price prediction is now shaky,’ as per the outlet, with traders monitoring for signs of liquidation or government sales of seized assets.

Beyond prices, the heist underscores vulnerabilities in crypto infrastructure. LuBian, a major player in Bitcoin mining before China’s 2021 crypto ban, exemplified the risks of centralized pools. Security experts, quoted in Coinpedia, warn that state actors increasingly target digital assets, blending cybercrime with espionage. ‘A massive Bitcoin mystery from 2020 has resurfaced, but this time, it’s not just about hackers and stolen crypto,’ the publication stated.

Technical Breakdown of the Alleged Hack

CVERC’s technical analysis details how attackers allegedly exploited LuBian’s wallet software vulnerabilities. The report claims the use of advanced persistent threats (APTs), similar to those in U.S.-attributed operations. IP addresses traced to U.S. servers and malware signatures matching known American tools form the basis of China’s evidence. However, independent verification is challenging, as blockchain’s pseudonymity complicates attribution.

In contrast, U.S. investigations, as detailed in Justice Department filings, trace the funds through a web of scams involving pig-butchering schemes and fake investment platforms run by Huione. Bloomberg reported that ‘China’s cybersecurity agency accused the American government of orchestrating the theft,’ but U.S. officials counter that the seizure disrupted criminal networks, recovering funds for victims.

Broader Implications for International Relations

This spat could strain U.S.-China relations further, especially in cyberspace governance. Experts from Financial Express note that ‘China alleges US role in $13 Billion ‘state-level’ Bitcoin hack,’ potentially prompting calls for international crypto treaties. The involvement of third parties like Cambodia adds layers, with Huione’s alleged ties to regional crime syndicates muddying the waters.

On X, sentiment ranges from skepticism to alarm. Posts discuss the heist’s scale, with one user stating, ‘China’s top cybersecurity agency claims the US orchestrated the largest Bitcoin HEIST EVER — 127,000 BTC snatched, worth a staggering $13 billion!’ Such reactions highlight public fascination and the potential for misinformation in crypto discourse.

Future of Crypto Security and Regulation

As the dispute unfolds, industry insiders are pushing for enhanced security measures. Mining pools and exchanges are advised to adopt multi-signature wallets and regular audits to prevent similar breaches. Brave New Coin reported that ‘China’s top cybersecurity agency has made explosive claims against the United States,’ urging a reevaluation of trust in centralized crypto entities.

The U.S. may respond with its own attributions, potentially escalating to diplomatic channels. Meanwhile, Bitcoin’s resilience shines through; despite the news, its market cap hovers at $2.09 trillion, per Economic Times. This episode may accelerate the shift toward decentralized finance, reducing reliance on vulnerable pools.

Economic Ramifications and Market Sentiment

Economically, the frozen assets represent a significant portion of Bitcoin’s supply, potentially influencing long-term prices if liquidated. Analysts from Yahoo Finance warn of ‘China Accuses US Of $13 Billion Bitcoin ‘State-Backed Crypto Heist’,’ suggesting volatility ahead. Traders are watching for U.S. government wallet movements, reminiscent of past Silk Road auctions.

Public discourse on platforms like X amplifies the drama, with users speculating on geopolitical motives. One post highlighted, ‘ China accuses the US of orchestrating a $13B Bitcoin hack. This is a major geopolitical shock that raises regulatory and custody risk for $BTC.’ Such sentiments underscore the intersection of technology, finance, and international politics in the crypto era.