China points to U.S. government behind $1.3 billion Bitcoin hacking

China has pointed to the U.S. government as responsible for a hacking incident worth $1.3 billion at a domestic Bitcoin mining pool, raising diplomatic tensions.

On the 11th (local time), Bloomberg reported that the China National Computer Virus Emergency Response Center (NCVERC) announced, "The U.S. government stole more than 120,000 bitcoins from China's LuBian (LuBian) bitcoin mining pool in December 2020," adding, "It appears to be a state-level hacking operation."

The LuBian mining pool launched in April 2020 and quickly grew to become the sixth-largest mining pool on the Bitcoin network at the time, but a large-scale hack at the end of that year caused it to lose most of its assets and shut down. Market research firm Arkham Intelligence classified the incident as one of the largest-ever virtual asset (cryptocurrency) thefts.

China argued, "The movement of the stolen bitcoins is very slow and covert, making it difficult to view it as the behavior of ordinary criminal organizations," and "There is a high possibility of government-level involvement." It also claimed that 127,000 bitcoins seized by U.S. law enforcement in the fraud and money laundering case of Chinese national Chen Zhi are linked to this incident.

The report asserted, "The U.S. government may have used hacking techniques since 2020 to siphon off the bitcoins held by Chen Zhi," and "This is a typical 'black eats black' case led by a state hacking organization."

The U.S. government has not issued an official statement, and Bloomberg reported that the Chinese government report related to these allegations was first made public last week.