No Credible Evidence US Government Hacked Chinese Bitcoin Wallets to “Steal” $13 Billion BTC

Why It Matters

The episode underscores how inadequate cryptographic practices can expose massive crypto assets to theft and how attribution in blockchain crimes remains fraught, often exploited for geopolitical narratives. It also illustrates law‑enforcement’s expanding capability to trace and seize illicit cryptocurrency, shaping future regulatory and security responses.

Summary

China’s National Computer Virus Emergency Response Center accused the United States of orchestrating the 2020 LuBian Bitcoin exploit that drained roughly 127,000 BTC from wallets using a weak MT19937‑seeded key generation process. Open‑source forensics by Arkham, MilkSad, Blockscope and others confirm the theft was enabled by a 32‑bit entropy flaw, not by a state‑level operation, and trace the stolen coins to U.S. Department of Justice forfeiture actions against the Prince Group. The DOJ now holds the assets as proceeds of fraud and money‑laundering, while Chinese officials cite the four‑year dormancy of the funds to allege a U.S. state actor, a claim unsupported by independent technical evidence.