Is the confiscation of 15 billion BTC from Prince Group a new form of digital bullying?

In October 2025, the U.S. Department of Justice announced the seizure of 127,000 bitcoins belonging to Chen Zhi, founder of the Prince Group in Cambodia, causing a huge stir in the global cryptocurrency field. This batch of digital assets, once valued at $15 billion, went from being "victim assets" stolen in 2020 to being identified as "subject matter" in 2025. It not only turned Chen Zhi from a victim into a transnational defendant but also exposed many deep-seated contradictions between cross-border law enforcement and Bitcoin regulation in the digital economy era. The Sa Jie team, through an overview of the "Chen Zhi" case, explores the technical truth and legal controversies behind this case. By introducing discussions of cryptocurrency private key-related issues, it reveals the challenges and shortcomings in cross-border crime governance in the digital age, providing an important example for examining the legal positioning and regulatory path of cryptocurrencies. Case Analysis On December 29, 2020, the LuBian mining pool suffered a major hacking attack, with a total of 127,272.06953176 Bitcoins (worth approximately $3.5 billion at the time, now worth $15 billion) stolen by the attackers. The holder of this huge amount of Bitcoins was Chen Zhi, chairman of the Prince Group of Cambodia. Following the hacking attack, Chen Zhi and his Prince Group repeatedly posted messages on the blockchain in early 2021 and July 2022, appealing to the hackers to return the stolen Bitcoins and offering to pay a ransom, but received no response. Strangely, after this huge amount of Bitcoin was stolen, it remained dormant in a Bitcoin wallet address controlled by the attackers for four years, almost untouched. This clearly doesn't conform to the typical behavior of hackers eager to cash out and pursue profits; it seems more like a precise operation orchestrated by a "nation-state hacking organization." It wasn't until June 2024 that the stolen Bitcoin was transferred to a new Bitcoin wallet address, where it remains untouched to this day. On November 9, 2025, the National Computer Virus Emergency Response Center's "Technical Source Tracing Analysis Report" clearly pointed out that the core cause of the "theft" of LuBian mining pool assets was a lack of technical compliance. The mining pool did not follow the industry-standard 256-bit binary random number standard for generating private keys, but instead arbitrarily used 32-bit binary random numbers combined with the unencrypted and insecure MT19937-32 pseudo-random number generator, significantly reducing the difficulty of cracking the private key; theoretically, the cracking time was only 1.17 hours. This systemic vulnerability provided attackers with an opportunity to precisely gain control of the assets. On-chain data shows that after these assets were transferred in December 2020, they were not quickly split and converted into cash like typical "stolen" assets, but instead remained dormant in specific wallet addresses for four years. In 2023, the CVE-2023-39910 vulnerability, exposed by the international security research team MilkSad, directly linked 25 target addresses in the US Department of Justice indictment to the addresses attacked by the LuBian mining pool. Further tracking by on-chain analysis firm ARKHAM confirmed that these assets ultimately flowed to wallet addresses controlled by the US government, meaning that the US had already effectively controlled these assets before their judicial seizure in 2025.

Dual Controversy over Jurisdiction and Liability

In October 2025, the U.S. Department of Justice officially announced the completion of the confiscation process for these 127,000 Bitcoins. It is noteworthy that the U.S. did not use traditional criminal extradition procedures, but instead chose to initiate civil confiscation proceedings, making the Bitcoins themselves the "defendant." The confiscation only required proof that the assets "probably originated from illegal activities." Simultaneously, the U.S. claimed jurisdiction over the case based on the "minimum contact principle," citing "259 U.S. victims and losses of approximately $18 million," thus circumventing many obstacles in cross-border law enforcement.

This outcome triggered a chain reaction: Chen Zhi's side denied the charges, claiming the assets were legally obtained; LuBian mining pool stated it would pursue the stolen assets through legal means; and the global cryptocurrency market experienced brief fluctuations, with investors beginning to re-examine the "anonymity" and "security" of virtual currencies.

As of now, this batch of Bitcoins remains in custody by the U.S. Department of Justice, and its final ownership and disposal are still under legal proceedings. However, this case has set a record for the scale of cross-border cryptocurrency confiscation, becoming a landmark case in global virtual currency law enforcement. (I) Core Controversy During the trial of the Chen Zhi case, the determination of the legal attributes of Bitcoin became the primary focus, an issue that has always been controversial globally. In my country's judicial practice, its property attributes are recognized, with Bitcoin considered to possess the potential for management, transfer, and protection of legal interests, thus constituting property data. The Hangzhou Internet Court has also ruled in civil cases that Bitcoin possesses property attributes and should be protected by law. However, in criminal justice practice, the characterization of Bitcoin remains ambiguous. In this case, the United States adopted the characterization of "proceeds of crime," including it within the scope of civil confiscation, which contrasts sharply with its "securities characterization" used in the Ripple case, reflecting the contextualized nature of virtual currency characterization. From the perspective of my country's legal framework, Bitcoin does not have the status of legal tender, and its trading and speculation activities are illegal financial activities. However, this does not negate its protected status as "virtual property." This institutional conflict between "transaction 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" argues that Bitcoin is essentially electronic data and does not possess the property attributes of traditional property; the "property theory" argues that it has economic value and disposability and should be included in the scope of property for protection; the "contraband theory" argues that it facilitates illegal transactions and should be identified as prohibited items by law. The conflict of these three viewpoints essentially reflects the difficulty of adapting digital economic innovation to the traditional legal system. (II) Procedural Focus The biggest legal controversy arising from the Chen Zhi case lies in the United States' claim to cross-border jurisdiction. In this case, the perpetrator, Chen Zhi, is a Cambodian businessman whose main activities occurred in Southeast Asia. The victimized mining pool was located in China, yet the United States asserted full jurisdiction based solely on the weak connection of "259 American victims." This practice has sparked widespread international debate regarding "long-arm jurisdiction." From the perspective of international law principles, the exercise of jurisdiction is usually based on the principles of territoriality, personal jurisdiction, or protection. The "minimum connection principle" adopted by the United States in this case originates from its domestic civil procedure law. Applying this principle to cross-border virtual currency cases breaks through the traditional jurisdictional boundaries of international law. This approach may exacerbate jurisdictional conflicts, and if other countries follow suit, it will plunge the virtual currency sector into a chaotic "jurisdictional battle." In contrast to similar cases in my country, such as the "Lantian Gerui Bitcoin Cross-border Recovery Case," the main perpetrator, Qian Zhimin, converted 40 billion yuan of illicit funds into Bitcoin and fled to the UK. Chinese judicial authorities had to initiate civil recovery proceedings in the UK through the Proceeds of Crime Act 2002, based on the Sino-British judicial cooperation mechanism. This process faced multiple obstacles, including differences in legal characterization and difficulties in evidence identification. The comparison between the two cases demonstrates how different countries' judicial philosophies and enforcement models lead to vastly different outcomes in cross-border virtual currency cases. (III) Determination of Liability Regarding the determination of criminal liability, the Chen Zhi case involved multiple suspicions, including theft and money laundering. However, due to the cross-border nature of the case and the special characteristics of virtual currencies, the application of traditional criminal charges faced challenges. In my country's judicial practice, similar cases are often convicted and punished as crimes such as illegally absorbing public deposits, money laundering, or fraud. For example, in the "first virtual currency case" in Jingmen, the criminal gang used virtual currencies to transfer funds and was ultimately convicted of cross-border online gambling. In contrast, the United States avoided complex criminal convictions in this case, opting instead for a swift civil confiscation process to recover assets, reflecting the differentiated strategies of different judicial systems in dealing with virtual currency crimes. In conclusion, the Chen Zhi Bitcoin case highlights the opportunities and challenges of the virtual currency era. While Bitcoin and other virtual currencies have innovated value transfer methods through blockchain technology, their anonymity and decentralized nature have also become tools for criminals, posing threats to financial security and social stability. Currently, global virtual currency regulation is in an exploratory phase; we must neither reject the value of technological innovation outright nor condone the spread of risks. my country's regulatory approach of "strictly preventing risks and protecting according to law" not only meets the overall requirements of financial security but also leaves room for responding to technological changes. With the maturation of on-chain regulatory technology, the improvement of legal systems, and the deepening of international cooperation, the governance framework for virtual currencies will gradually become clearer. For ordinary people, the warning from the Chen Zhi case is particularly profound: the "anonymity" of virtual currencies is relative, and their "security" is fragile. Any attempt to use virtual currencies to circumvent regulation and seek illegal profits will ultimately be punished by law. In the wave of digital financial innovation, only by adhering to the bottom line of the law and respecting market risks can we truly enjoy the dividends brought by technological progress. The story of Bitcoin continues, and how to find a balance between innovation and risk, and build a regulatory system that is both inclusive and prudent, will be a long-term challenge for countries around the world.