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.

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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.