Behind the slashing of 150 billion BTC from the BCH group is a new type of digital bullying?

In October 2025, the U.S. Department of Justice announced the seizure of 127,000 Bitcoins belonging to Chen Zhiming, the founder of the Cambodian Prince Group, causing a huge uproar in the global Crypto Assets field.

This batch of digital assets, which once had a market value of up to 15 billion USD, from the “victim assets” stolen in 2020 to the “involved targets” identified in 2025, not only turned Chen Zhi from a victim into a multinational defendant but also exposed many deep-seated contradictions in cross-border law enforcement and Bitcoin regulation in the era of the digital economy.

The Sa Sister team introduced the case overview of “Chen Zhi” to explore the technical truths and legal disputes behind this case. By introducing discussions related to encryption private keys, it reveals the challenges and cooperation shortcomings in transnational crime governance in the digital age, providing an important sample for us to examine the legal positioning and regulatory path of Crypto Assets.

Case Analysis

On December 29, 2020, the LuBian mining pool suffered a major hacking incident, resulting in the theft of a total of 127272.06953176 Bitcoins (worth approximately 3.5 billion USD at the time, now valued at 15 billion USD). The holder of this large amount of Bitcoin is Chen Zhi, chairman of the Cambodian BCH Group.

After the hacking incident, Chen Zhi and his BCH group released messages multiple times on the blockchain in early 2021 and July 2022, calling out to the hackers, hoping that they could return the stolen Bitcoin and were willing to pay a ransom, but received no response.

But strangely, after this batch of huge Bitcoins was stolen, it remained dormant in a Bitcoin wallet address controlled by the attackers for as long as 4 years, with almost no movement. This clearly does not align with the typical behavior of hackers eager to cash out and pursue profits, but rather resembles a precise operation orchestrated by a “nation-state hacking organization.” It wasn't until June 2024 that this batch of stolen Bitcoins was transferred to a new Bitcoin wallet address, and it has remained untouched since.

On November 9, 2025, the “Technical Traceability Analysis Report” from the National Computer Virus Emergency Handling Center clearly pointed out that the core reason for the “theft” of LuBian mining pool assets was the lack of technical compliance. The mining pool did not follow the industry-standard 256-bit binary random number standard to generate private keys, but instead arbitrarily adopted a 32-bit binary random number paired with the non-encryption secure MT19937-32 pseudorandom number generator, significantly reducing the difficulty of cracking the private keys, with a theoretical cracking time of only 1.17 hours. This systemic vulnerability provided attackers with an opportunity to accurately gain control over the assets.

On-chain data shows that this batch of assets, after being transferred in December 2020, did not get quickly liquidated like conventional “stolen” assets, but remained dormant in specific wallet addresses for four years. In 2023, the CVE-2023-39910 vulnerability exposed by the foreign security research team MilkSad directly linked the 25 target addresses in the U.S. Department of Justice indictment to the attacked address of the LuBian mining pool. Further tracking by on-chain analytics firm ARKHAM confirmed that these assets ultimately flowed to wallet addresses controlled by the U.S. government, indicating that the U.S. had effectively gained control of this batch of assets before the judicial forfeiture in 2025.

Dual Disputes on Jurisdiction and Liability Determination

In October 2025, the U.S. Department of Justice officially announced the completion of the seizure process for a batch of 127,000 Bitcoins. Notably, the U.S. did not employ traditional criminal extradition procedures but chose to initiate a civil forfeiture process, treating the Bitcoins themselves as the “defendant” and only needing to prove that the assets “likely derived from illegal activities” to complete the confiscation. At the same time, the U.S. claimed jurisdiction over the case based on the argument that “the case involves 259 American victims with losses of approximately $18 million,” circumventing many obstacles in cross-border law enforcement under the “minimum contacts principle.”

This disposal result triggered a chain reaction: Chen Zhi's side denied the accusations, claiming that the assets were legally obtained; the LuBian mining pool stated that it would seek to recover the stolen assets through legal means; meanwhile, the global Crypto Assets market experienced a brief fluctuation, and investors began to reassess the “anonymity” and “security” of virtual currencies.

As of now, this batch of Bitcoin is still held by the U.S. Department of Justice, and its final ownership and disposal method are still in legal proceedings. However, this case has set a record for the scale of cross-border seizure of Crypto Assets, becoming a landmark case in global virtual currency law enforcement.

(1) Core Disputes

During the trial of the Chen Zhi case, the legal nature of Bitcoin became a primary focus, and this issue has always been a point of contention globally. In our judicial practice, its property attributes are recognized, and it is believed that Bitcoin possesses the possibilities of management, transfer, and legal interest protection value, falling under property data; the Hangzhou Internet Court has also ruled in civil cases that Bitcoin has property attributes and should be protected by law.

However, in criminal justice practice, the qualification of Bitcoin still has ambiguous areas. The United States adopts the qualification of “criminal proceeds” in this case, incorporating it into the scope of civil forfeiture, which stands in stark contrast to the “securities qualification” used in the Ripple case, reflecting the contextual characteristics of virtual currency qualification.

From the perspective of our country's legal framework, Bitcoin does not have the status of legal tender, and its trading and speculation activities are considered illegal financial activities. However, this does not negate its protected status as “virtual property.” This institutional conflict between “trading prohibition” and “property protection” is also reflected in the Chen Zhi case.

There are three main viewpoints in the theoretical community: the “computer information system data theory” believes that Bitcoin is essentially electronic data and does not possess the material attributes of traditional property; the “property theory” asserts that it has economic value and disposability and should be protected under property law; the “contraband theory” believes that it fosters illegal transactions and should be classified as a legally prohibited item. The conflict among these three viewpoints essentially reflects the challenge of adapting digital economic innovation to the traditional legal system.

(2) Program Focus

The biggest legal controversy arising from the Chen Zhi case lies in the claim of cross-border jurisdiction by the United States. In this case, the main party involved, Chen Zhi, is a Cambodian businessman, with most of the activities occurring in Southeast Asia. The victim mining pool is located within China, and the United States claims comprehensive jurisdiction based solely on the weak connection of “there being 259 American victims,” which has sparked widespread discussion in the international community about “judicial long-arm jurisdiction.”

From the perspective of international law principles, the exercise of jurisdiction is usually based on the principles of territoriality, personality, or protection. The “minimum contacts principle” adopted by the United States in this case originates from its domestic civil procedure law and applies this principle to cross-border virtual currency cases, breaking through the traditional jurisdictional boundaries of international law. This practice may lead to an escalation of jurisdictional conflicts, and if various countries follow suit, it will plunge the virtual currency field into a chaotic situation of “jurisdictional competition.”

In comparison to similar cases in our country, the 'Lantian Gerui Electronic Technology Co., Ltd. Bitcoin cross-border recovery case' involved the main culprit Qian Zhimin converting 40 billion yuan of illicit funds into Bitcoin and fleeing to the UK. Our judicial authorities need to initiate civil recovery procedures in the UK based on the Sino-British judicial cooperation mechanism and the '2002 Proceeds of Crime Act.' This process faces multiple obstacles such as differences in legal definitions and difficulties in evidence recognition. A comparison of the two cases shows that the different judicial philosophies and law enforcement models of various countries lead to vastly different outcomes in the handling of cross-border virtual currency cases.

(3) Responsibility Determination

In terms of criminal liability determination, the Chen Zhi case involves multiple suspicions such as theft and money laundering. However, due to the cross-border nature of the case and the peculiarities of virtual currency, the applicability of traditional criminal charges faces challenges. In our country's judicial practice, similar cases are often convicted and punished under the crime of illegally absorbing public deposits, money laundering, or fraud. For example, in the Jingmen “first virtual currency case,” the criminal gang circulated funds through virtual currency and was ultimately identified as a cross-border online gambling crime. In contrast, the United States avoided complex criminal convictions in this case and chose to quickly implement asset confiscation through civil forfeiture procedures, reflecting the differentiated strategies of different judicial systems in dealing with virtual currency crimes.

Writing at the End

Chen Zhi's Bitcoin case reflects the opportunities and challenges of the virtual currency era. Virtual currencies like Bitcoin have realized an innovation in value transmission methods through blockchain technology, but their anonymity and decentralization characteristics have also become tools for criminals, posing risks to financial security and social stability.

Currently, the global regulation of virtual currencies is in an exploratory phase, where one cannot negate the value of technological innovation due to fears of risk, nor can one allow risks to spread unchecked. China’s regulatory approach of “strictly preventing risks and legally protecting” aligns with the overall requirements for financial security and also reserves space to respond to technological changes. With the maturity of on-chain regulatory technologies, the improvement of legal systems, and the deepening of international cooperation, the governance framework for virtual currencies will gradually become clearer.

For the average person, the warning significance of the Chen Zhi case is particularly profound: the “anonymity” of virtual currencies is relative, and the “security” is fragile. Any attempt to use virtual currencies to evade regulation and seek illegal benefits will ultimately face legal sanctions. In the wave of digital financial innovation, only by adhering to the legal bottom line and respecting market risks can one truly enjoy the dividends brought by technological progress.

The story of Bitcoin continues, and how to find a balance between innovation and risk to build a regulatory system that is both inclusive and prudent will be a long-term issue faced by countries around the world.