Chinese Mining Pool Moves Dormant Bitcoin After Department of Justice Files Largest Forfeiture Case
A cryptocurrency wallet connected to the compromised LuBian mining pool transferred $1.3 billion in Bitcoin on Wednesday. According to Cointelegraph, the transfer occurred one day after federal prosecutors announced a $15 billion forfeiture action. Blockchain analytics firm Lookonchain detected 9,757 BTC moving to new addresses after three years of inactivity.
Arkham Intelligence identified a second transfer hours later involving 2,129 BTC worth approximately $238 million. The combined movement totaled 11,886 Bitcoin at current market prices. The original 127,426 BTC theft from LuBian occurred in December 2020 through a cryptographic vulnerability. Attackers exploited weak key generation algorithms susceptible to brute-force attacks.
The U.S. Attorney's Office for the Eastern District of New York unsealed an indictment Tuesday against Prince Holding Group chairman Chen Zhi. Federal prosecutors filed a civil forfeiture complaint for 127,271 Bitcoin currently in government custody. The seized cryptocurrency represents proceeds from forced-labor scam operations across Cambodia.
Government Holdings Expand While Victims Face Losses
The forfeiture action could increase U.S. government Bitcoin reserves from 198,021 BTC to approximately 325,292 BTC. We previously reported that 15 U.S. states are moving forward with plans for Bitcoin reserves, with Pennsylvania, Arizona, and New Hampshire proposing allocations up to 10% of public funds. The combined federal and state holdings would position the United States as the largest government Bitcoin holder globally.
Victims of the Prince Group's schemes reportedly lost over $16.6 billion through pig butchering scams. Americans alone lost $10 billion to Southeast Asia-based fraud operations in 2024. The FBI received reports showing these investment scams generated up to $30 million daily at their peak. Workers were forced to operate 76,000 fake social media accounts from compounds surrounded by barbed wire.
Chen Zhi faces wire fraud conspiracy and money laundering conspiracy charges carrying up to 40 years in prison. The Treasury Department designated Prince Group as a transnational criminal organization. Chen remains at large despite coordinated enforcement actions between U.S. and U.K. authorities.
Blockchain Analysis Reveals Criminal Network Operations
Elliptic analysis confirmed the seized Bitcoin originated from the 2020 LuBian theft. The mining operation controlled nearly 6% of global Bitcoin mining before disappearing in February 2021. LuBian maintained operations in both China and Iran prior to the breach. The stolen funds remained dormant until June 2024 when they moved to new wallets.
Cryptocurrency fraud continues expanding despite increased enforcement efforts. Chainalysis reported scam wallets received nearly $10 billion in cryptocurrency during 2024. Pig butchering revenue grew 40% year-over-year while targeted victim numbers increased 210%. Criminal networks operate from organized compounds in Southeast Asia where trafficked workers execute sophisticated campaigns.
The timing of the LuBian wallet movement suggests operators may be attempting to relocate assets before potential enforcement actions. Blockchain transparency enabled investigators to trace transactions through multiple wallet clusters. Federal authorities worked with analytics firms and exchange partners to identify financial flows. The case represents growing coordination between law enforcement agencies and cryptocurrency forensics providers across international borders.
