The 2020 Lubian Hack and Chen Zhi Connection

In 2020, the Lubian mining pool was targeted in a cyberattack, resulting in the theft of 127,000 BTC. Later, the stolen Bitcoins were linked to Cambodian businessman Chen Zhi. The U.S. Department of Justice (DOJ) accuses Chen Zhi of running large-scale cryptocurrency fraud and money laundering operations. In this context, CVERC alleges that the U.S. may have indirectly supported the attack and disguised its seizure as a legitimate operation.

“This is a typical example of a state-level hacking organization orchestrating the theft while the ‘thieves clash among themselves,’” CVERC commented.

The CVERC report also stated, “The attack was carried out using advanced tools, suggesting a state-sponsored hacker group. The U.S. seizure may be part of a larger operation involving the same attackers.”

2024 Transfers and Blockchain Analysis

The stolen Bitcoin remained dormant for nearly four years. Subsequently, in mid-2024, they were quietly transferred to new wallets. Blockchain analysis firm Arkham Intelligence later traced these wallets to the U.S. government. This development prompted CVERC to investigate U.S. involvement.

U.S. Response and International Tensions

The DOJ rejected China’s allegations, stating that the Bitcoin were part of Chen Zhi’s fraud and money laundering network, and that the seizure was a legitimate law enforcement operation.

The incident highlights rising tensions between the U.S. and China over cybersecurity and global control of digital assets. Cryptocurrencies are increasingly becoming a strategic tool of national power.

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Will China Respond to the US Bitcoin Strategy?

As the United States establishes its Strategic Bitcoin Reserve, speculation is growing about whether China will counter with its own national crypto strategy. On March 7, US President Donald Trump signed an executive order creating a “Strategic Bitcoin Reserve” and “Digital Asset Stockpile,” funded initially by Bitcoin and other digital assets seized from criminal cases.

While the US shifts its stance on Bitcoin, China may take steps to avoid falling behind. On March 3, Bitcoin advocate David Bailey revealed that China is reportedly developing its own strategy in response to Trump’s executive order. Bailey also noted claims that China held closed-door meetings on Bitcoin following the 2024 US elections, though no official confirmation was made.

How Much Bitcoin Does China Hold?

If China adopts a Bitcoin reserve strategy, the amount of Bitcoin it holds could rival the US reserves. The US currently holds 198,109 BTC, worth over $17 billion. David Sacks, the White House’s AI and crypto czar, stated that the US plans to hold its Bitcoin as a long-term store of value and will use “budget-neutral strategies” to acquire more.

China has not made any official statements regarding its Bitcoin reserves or sales strategies. In 2020, China seized 195,000 BTC from the PlusToken Ponzi scheme, which were transferred to the national treasury. CryptoQuant CEO Ki Young Ju suggested that China may have already sold some of its BTC.

If China still holds its reserves and follows the US strategy, it could become one of the largest Bitcoin holders globally.

US Bitcoin Strategy: The Start of Geopolitical Competition

The US’s adoption of Bitcoin marks the beginning of a global competition among nation-states. On March 7, Jan3 CEO Samson Mow pointed out that some Bitcoin supporters have downplayed the Strategic Bitcoin Reserve because the US hasn’t immediately purchased BTC, but he believes the move will have significant effects.

Mow stated that the “real race” for Bitcoin adoption among nation-states has begun and emphasized that there are “budget-neutral” ways to acquire BTC, such as issuing bonds or selling gold.

Mow also mentioned that the US holds only 112,000 BTC, a large portion of which will be returned to Bitfinex. “In that case, China would be in pole position with 194,000 BTC,” he added. Mow predicted that the US would likely increase its Bitcoin holdings to avoid losing out to China.

While Beijing’s stance on Bitcoin reserves remains unclear, Hong Kong lawmakers are exploring the possibility of accepting Bitcoin under the “one country, two systems” framework. On December 30, Hong Kong Legislative Council member Wu Jiexhuang stated that Hong Kong could examine the market impact of US spot Bitcoin ETFs, noting that Trump’s proposal to turn BTC into a strategic reserve asset could affect traditional markets.

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