U.S. Department of Justice Seizes $15 Billion in Bitcoin
The U.S. Department of Justice (DOJ) has made the largest financial seizure in its history. They took about 127,000 bitcoins, worth around $15 billion. This is a huge amount of digital money.
What makes this case special is how the U.S. got the bitcoins. Experts found a big flaw in how thousands of Bitcoin wallet addresses were made. This flaw made the wallets unsafe.
The Prince Holdings Group and the Bitcoin Seizure
Last week, the DOJ said it seized 127,000 bitcoins linked to a big international scam group called the Prince Holdings Group. This group is connected to a large fraud and scam ring.
The seizure links two big stories in the Bitcoin world. One is the sudden disappearance of the Lubian bitcoin mining pool in 2021. The other is the U.S. crackdown on Cambodia’s Prince Group. This group is said to be run by Chen Zhi, known as the “pig-butchering kingpin.”
The DOJ says Chen Zhi’s Prince Group ran a huge forced-labor scam in Cambodia. They tricked people into fake digital investment schemes called pig-butchering scams. Chen and his team are accused of laundering billions of dollars. They used shell companies, real estate projects, and bitcoin mining to hide their money.
Lubian Mining Pool’s Role in the Scam
Lubian Mining was a well-known bitcoin mining pool. It had facilities in China and Iran. At its best, Lubian controlled about 6% of Bitcoin’s total mining power.
In early 2021, Lubian suddenly stopped working. Reports later showed that 127,000 bitcoins were stolen from Lubian. At that time, these coins were worth about $3.5 billion. This theft confused many in the Bitcoin community because the coins disappeared for years.
The Flaw in Bitcoin Wallets
New research shows Lubian’s loss was not a usual hack. Instead, the problem was a flaw in how Lubian created its Bitcoin wallet keys. The software used a weak random number generator. This made the wallet keys predictable and easy to guess.
Shenyu, co-founder of Cobo and F2Pool, first reported this issue. He explained that the wallet creator used a Mersenne Twister pseudorandom number generator (PRNG). This PRNG created more than one private key before resetting, which made the keys less random and vulnerable.
Because of this flaw, someone could calculate the private keys and take control of the bitcoins. Shenyu found that over 220,000 Bitcoin addresses had this same weakness. Despite warnings, some people still send funds to these risky addresses.
How the Bitcoins Were Moved and Seized
On December 28, 2020, the Lubian wallets were emptied in a two-hour period. Analysts noticed many transactions used the same unusual fee of 75,000 satoshis. About 136,951 bitcoins were moved to a few big addresses. These wallets stayed inactive for years.
In mid-2024, the coins moved again. In October 2025, the DOJ seized 127,271 bitcoins from Chen Zhi and his group. The seized addresses matched those from the Lubian case.
Blockchain firms Elliptic and Arkham Intelligence confirmed these coins were the same ones linked to Lubian. Arkham said the wallets were long known to belong to Lubian and now to the Prince Group’s money laundering network.
How the DOJ Likely Got the Bitcoins
The U.S. government has not said exactly how they got the private keys. Reports suggest it was not by hacking in the usual way. Instead, they probably used the flaw in the wallet key generation to find the private keys.
This case shows how weak cryptography can be a big risk in Bitcoin. The DOJ’s indictment explains how Chen laundered money by running bitcoin mines that made “clean” coins.
Lubian’s mining operations were part of this laundering network. But because their wallets were made with flawed software, the keys were never fully safe.
The discovery of this flaw helped U.S. investigators take control of the bitcoins. They may have done this without traditional hacking.
Conclusion
The DOJ’s seizure of 127,000 bitcoins is a landmark case. It reveals the dangers of weak cryptography in Bitcoin wallets. It also shows how law enforcement can use technical flaws to fight crime. The case against Chen
