LuBian Mining Pool Hacked in December 2020

Arkham Intelligence uncovered the hack on Saturday, revealing that the LuBian mining pool, which was the sixth-largest BTC mining pool at the time, was attacked on December 28, 2020. About 90% of its Bitcoin was stolen by hackers before the pool managed to transfer its remaining 11,886 BTC to recovery wallets. Neither LuBian nor the hackers reported the attack at the time.

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The hackers embedded OP_RETURN messages in 1,516 transactions to store wallet addresses. Arkham also noted that LuBian used a private key generation algorithm that was susceptible to brute-force attacks, which may have been the vulnerability exploited by the hackers.

The Aftermath and Crypto Security Warning

At the time of the hack, the stolen Bitcoin was worth $3.5 billion, but now, at current prices, it’s valued at around $14.5 billion. Arkham highlights this incident as a critical reminder for crypto users to implement robust private key management and security practices. The breach also serves as a warning for all cryptocurrency investors about the risks of weak algorithms and poor cybersecurity practices.

A Turning Point in Crypto Theft History

The LuBian hack surpasses the $1.5 billion ByBit hack from earlier this year, which was previously considered the largest crypto theft in history. This event, along with several other notable hacks, highlights the ever-present threats in the crypto space. In April, an elderly individual lost $330 million in Bitcoin via a social engineering attack, which was later laundered through 300 different wallet addresses.

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Wallet Breached via Social Engineering

The attack occurred on April 28, 2025, when a suspicious transaction involving 3,520 BTC was flagged by blockchain monitoring tools. Investigators later confirmed that the funds were drained from the victim’s wallet using sophisticated social engineering techniques.

Blockchain data revealed the victim had been holding more than 3,000 BTC since 2017, with no significant movements, indicating that the attacker likely spent months or even years preparing for the breach.

Funds Obscured Using Privacy Coins

Immediately after gaining control of the assets, the attacker began laundering the funds through over six instant exchange platforms, quickly fragmenting the BTC using a method known as a peel chain — where large sums are broken into smaller transfers to evade detection.

A significant portion of the stolen BTC was converted into Monero (XMR), a privacy-focused cryptocurrency known for its untraceable transactions. Following the conversion, Monero’s price surged by over 50%, briefly reaching $339.

Over 300 Wallets and 20+ Exchanges Involved

Security researchers tracking the stolen funds estimate that the laundering process involved more than 300 different wallets and over 20 exchanges or payment services. A majority of the assets were funneled through low-trust platforms and mixing services, making traceability extremely difficult.

In some cases, portions of the BTC were even bridged to Ethereum and moved into various DeFi platforms, further complicating the forensic trail. Exchanges have been alerted, and requests to freeze suspect accounts are underway.

No Links to Known Threat Actors

Despite the scale and complexity of the operation, cybersecurity experts say the laundering techniques do not match the typical signatures of well-known hacking collectives like Lazarus Group. The identity of the perpetrators remains unknown, though the use of pre-established exchange accounts and OTC desks suggests a well-orchestrated and premeditated plan.

Security Best Practices for Crypto Holders

In response to the attack, security professionals are urging crypto holders — especially those managing large Bitcoin reserves — to adopt strict protective measures. These include the use of multisignature wallets, minimizing exposure to internet-connected hot wallets, storing assets in cold hardware wallets, and regularly rotating private keys.

During the first quarter of 2025, cyberattacks on crypto platforms have led to losses exceeding $1.6 billion, with a significant portion tied to previous large-scale incidents. This case serves as yet another reminder of the critical importance of personal wallet security in the evolving threat landscape of digital finance.

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