Last week, China’s cybersecurity agency officially accused state actors, including the United States, of being behind the 2020 hack of a bitcoin mining pool known as LuBian, according to a report in Bloomberg. The hack led to a theft of 127,272 bitcoin from the mining pool, which is currently worth around $13 billion.

A bitcoin mining pool is an entity that aggregates hashing power from a multitude of miners to increase the frequency of new revenue coming in via finding blocks and their associated rewards.

A direct connection between the U.S. and the bitcoin theft is unclear, but the Chinese National Computer Virus Emergency Response Center claims that the fact that the hacker sat on the stolen funds for an extended period of time points to state-level involvement. Chinese authorities, and anyone else connected to the Bitcoin network for that matter, are able to track the movements of stolen funds on the blockchain, as all that data is public.

According to the U.S. government, the bitcoin in question is actually associated with a massive pig butchering scam affiliated with Chen Zhi, who is the chairman of the Cambodian conglomerate Prince Group, that also involved forced labor.

A pig butchering scam is a method of tricking a victim into investing in a fraudulent investment scheme after earning their trust over time via a usually romantic online relationship. Various forms of crypto are usually used in these scams, as the transactions are irreversible, although funds can be more easily frozen or recouped when stablecoins are involved.

The U.S. Department of Justice (DOJ) indicted Chen just last month, and it was claimed that 127,272 bitcoin had been seized as part of a related asset-forfeiture process. According to the DOJ, this was the largest asset forfeiture in U.S. history.

As explained in the indictment, the LuBian mining pool was allegedly a method used by Chen and his associates to launder funds generated from their illicit activities, as newly-mined bitcoin comes with a clean track record.

Some American bitcoin enthusiasts wondered if these seized assets would eventually find their way into a potential bitcoin strategic reserve, which Trump said he would establish while campaigning for president at the Bitcoin 2024 conference in Nashville, Tennessee.

While the exploration of a strategic bitcoin reserve was initiated by executive order early this year, it has not yet happened, and prediction market Polymarket currently puts the odds of it happening this year at 3% after peaking around 77% in March. Due to the recent pardoning of Binance co-founder Changepeng “CZ†Zhao and other crypto-related activities, the Trump administration’s priorities when it comes to Bitcoin and crypto have come under increased scrutiny.

What’s most interesting is wallet addresses listed in the US government $14B (127K BTC) seizure previously were named in a Milky Sad report ~2 years ago for having vulnerable private keys and now the USG says they have custody of them. https://t.co/sHNwMXhLKH pic.twitter.com/icLWKU33kC

— ZachXBT (@zachxbt) October 14, 2025

It’s unclear what exactly happened with these bitcoins and how the U.S. government obtained them at this time, as blockchain analysts have differing opinions on what really happened here. As Coinbase Director Conor Grogan stated on X, “I realize that it sounds weird because [I’m] contradicting literally what the [U.S. government] is saying in that document, it just [doesn’t] make a ton of sense though.â€

Growing Cyber War Between China, U.S., and Others

Whether the allegations made by China against the U.S. are true or not, there is clearly a growing cyber war taking place between these two great powers, which is viewed as a key aspect of what is oftentimes referred to as the Second Cold War.

For example, 60 Minutes ran a story last month on the targeting of local infrastructure by China in the United States for the purpose of gaining an advantage during a hypothetical hot war between the two nations. There have also long been concerns regarding potential backdoors in technology created by Huawei and other Chinese companies.

The U.S. has also played its own part in the growing global cyber warfare phenomenon, as it was allegedly behind the Stuxnet hacking plot against Iran’s nuclear program that sounded like it came directly out of a James Bond or Jason Bourne movie.

If bitcoin continues to develop as a trusted, digital reserve asset around the world, it’s likely that it and other crypto assets will continue to play a critical role in this growing battle for cyber supremacy. Unfortunately, this has been a key area of focus and success for the North Korean regime, as the associated Lazarus Group is thought or alleged to be behind many of the crypto and decentralized finance (DeFi) hacks over the years.

However, no official allegation has been made against Lazarus Group regarding last week’s exploit of DeFi protocol Balancer involving at least $120 million worth of crypto.