China’s cybersecurity agency has accused the US government
of involvement in the theft of roughly $13 billion in Bitcoin, marking another
instance of China attributing major cyberattacks to the US. The U.S. maintains
that the funds were seized legally.
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Christopher Perkins, a CFTC advisor and former Citi
executive, suggested that rather than downplaying such actions, the US could
treat offensive crypto operations against sanctioned actors as “national policy”.
US Could Authorize Private Crypto Seizures
Perkins proposed reviving a long-dormant constitutional
authority, letters of marque and reprisal, to allow Congress to authorize
vetted private actors to seize property from foreign adversaries.
Applied to
cryptocurrency, this could empower startups to target OFAC-sanctioned wallets,
such as those linked to North Korea’s Lazarus Group, and redirect recovered
assets into a national Bitcoin reserve.
US Seizes Bitcoin Tied to LuBian
In December 2020, 127,272 Bitcoin were stolen from the
LuBian mining pool, one of the largest crypto heists on record. China’s
National Computer Virus Emergency Response Center described it as a possible
“state-level hacker operation,” noting the slow and discreet movement of the
funds, according to Bloomberg report.
A recent report linked the stolen Bitcoin to US-seized
tokens connected to Chen Zhi, chairman of Cambodia’s Prince Group. Chen was
charged with wire fraud and money laundering. Authorities said he and
co-conspirators laundered funds to support large mining operations, including
LuBian. The US later seized 127,271 Bitcoin in its largest civil forfeiture.
China Expands Cyber Claims Against US
China described the theft as a “classic ‘black eats black’
operation” and has recently increased public accusations of US cyber
operations. These include alleged attacks on Microsoft Exchange servers and the
National Time Service Center. Analysts say China’s claims are often broad and
lack detailed forensic evidence.
In the US, Chen’s attorney, Matthew L. Schwartz, requested
more time to trace the seized Bitcoin. He called the allegations “seriously
misguided.” Chen remains outside US custody. Schwartz’s team is working with
cryptocurrency experts to track the funds.
This article was written by Tareq Sikder at www.financemagnates.com.
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