Was Bitcoin "stolen" or "seized"? The mysterious connection between $14 billion worth of Lubian old coins and the US government

Billions of Dollars in Bitcoin Related to U.S. Department of Justice Fugitive Are Being Transferred

Wallets associated with Zhi Chen transferred nearly $2 billion worth of bitcoin on Wednesday. Last week, the U.S. government charged him in connection with an alleged $14 billion crypto scam.

Summary:

According to data from Arkham Intelligence, wallets linked to the alleged scammer Zhi Chen have transferred approximately $1.7 billion worth of bitcoin, which were recently sanctioned by the U.S. Treasury Department.

The 15,959 bitcoins transferred appear to be connected to Zhi Chen’s Prince Holding Group, which prosecutors say operates a global crypto scam and forced labor network.

Zhi Chen remains at large, and investigators are questioning how the U.S. government obtained another batch of bitcoin worth $14 billion related to his operations.

On-chain data indicates that the mastermind behind the $14 billion crypto scam, who is currently evading capture by the U.S. government, has begun moving billions of dollars in bitcoin to new wallets.

According to analysis by Arkham Intelligence, wallets associated with Zhi Chen—a dual Chinese and Cambodian national allegedly at the core of a global “pig-butchering” crypto scam network—have moved nearly $2 billion in bitcoin from wallets recently sanctioned by the U.S. Treasury Department to new addresses.

These 15,959 bitcoins were transferred from addresses blacklisted by the Treasury last week to four new wallets. As of now, the total value of these tokens exceeds $1.72 billion.

Zhi Chen is the founder and chairman of the Cambodia-based multinational conglomerate Prince Holding Group. The U.S. Department of Justice alleges that Prince Holding Group is at the center of a global crypto scam network involving forced labor and causing billions of dollars in victim losses.

Last week, federal prosecutors announced criminal charges of wire fraud and money laundering against Zhi Chen, who remains at large.

Prosecutors also revealed that the U.S. government has seized more than $14 billion worth of bitcoin from Prince Holding Group and is advancing the largest forfeiture action in the history of the Department of Justice.

The funds transferred today from wallets associated with Prince Holding Group are not the same batch of funds as the $14 billion in bitcoin currently controlled by the U.S. government. These funds belong to other assets of the organization. Arkham speculates that this transfer may be an attempt to obscure the connection with the wallets sanctioned by the U.S.

There are still many uncertainties regarding the bitcoin related to Zhi Chen and Prince Holding Group.

The $14 billion in bitcoin currently controlled by the U.S. government was recently identified by Arkham as the same funds allegedly stolen in the 2020 Chinese mining pool Lubian theft incident.

However, the U.S. Department of Justice pointed out last week that Lubian was one of the companies used by Prince Holding Group to launder scammed bitcoin.

As a result, some on-chain analysts have recently suggested that the $14 billion in bitcoin that disappeared in 2020 may never have been stolen at all; or, conversely, that the “theft” may have been carried out by the U.S. government or hackers working for the government.

Since 2020, this batch of related bitcoin was only moved again in the summer of 2024—transferred to wallets believed to be controlled by U.S. law enforcement agencies.

On-chain intelligence firm Elliptic recently summarized:

“It remains unclear how these bitcoins came under the control of the U.S. government. It is also unclear who ‘stole’ these bitcoins from Zhi Chen or Lubian, or whether a theft actually occurred.”