In October 2025, the US Department of Justice filed a lawsuit against Cambodia’s Prince Group and its chairman, Chen Zhi, and seized approximately 127,271 bitcoins—valued at nearly $15 billion based on market prices at the time.
The origin of this massive sum traces back to December 2020, when the Lubian mining pool was hacked and 120,000 bitcoins were transferred, then worth about $3.5 billion.
Analysis shows the root cause of the asset seizure was the use of a weak pseudo-random number algorithm during private key generation, making the keys vulnerable to brute-force attacks.
Event Background: Five Years from Mining Pool Theft to Government Seizure
This $15 billion bitcoin asset seizure is, in reality, the culmination of a complex, five-year saga. The story began on December 29, 2020, when the well-known LuBian mining pool was hacked and about 120,000 bitcoins were transferred in a short period.
Based on the bitcoin price at the time, the assets were worth roughly $3.5 billion, now approaching $15 billion.
Subsequent investigations revealed that the actual control of these bitcoins belonged to Chen Zhi, chairman of Cambodia’s Prince Group. As a result, the incident became known as the "Prince Group Mining Pool Theft Case."
In October 2025, the US District Court for the Eastern District of New York disclosed the unprecedented scale of this crypto asset seizure, and the Department of Justice officially confiscated 127,271 bitcoins.
Technical Vulnerability: Fatal Flaws in Weak Random Number Generators
This incident exposed one of the most critical weaknesses in cryptocurrency security—the process of private key generation. Bitcoin private keys are supposed to be 256-bit random numbers, offering 2^256 possible combinations, theoretically impossible to crack.
However, tools like the Lubian mining pool used the Mersenne Twister MT19937-32 random number generator, which is not a true source of randomness.
This pseudo-random algorithm has serious design flaws. It’s akin to a "coin-flipping machine" stuck in limited patterns, drastically shrinking the possible private key space.
Once attackers understood this pattern, they could quickly brute-force all possible weak keys and unlock the corresponding bitcoin wallets.
According to research by the Milk Sad team, between 2019 and 2020, wallets with these weak keys held over 53,500 bitcoins at their peak.
Asset Tracking: From Hack to Government Seizure
The movement of these bitcoins illustrates the complex liquidity of crypto assets. On December 28, 2020, abnormal transactions appeared on-chain, and a large number of wallets within Lubian’s weak key range were emptied within hours—about 136,951 bitcoins were transferred in one go.
At the time, with bitcoin priced around $26,000, this amounted to roughly $3.7 billion.
The transaction fee was fixed at 75,000 satoshis, regardless of the amount, indicating the operator’s deep familiarity with the bitcoin network.
Some funds later returned to the Lubian mining pool for subsequent mining rewards, suggesting not all transferred assets ended up with the hackers.
In July 2024, these bitcoins were consolidated. US blockchain analytics platforms quickly identified the merged bitcoins as the "stolen" Lubian assets.
This allowed the US government to attribute the bitcoins to Chen Zhi and proceed with judicial seizure.
Market Response: Bitcoin Price Trends and Investor Sentiment
When this incident came to light, the bitcoin market was at a pivotal moment. In early 2026, bitcoin’s price dropped from a peak near $98,000 to around $60,000. By February 11, it had rebounded to about $67,000.
Futu Securities Senior Analyst Feng Wenhui noted that the current bitcoin Fear & Greed Index has fallen to nearly 15, entering "extreme fear" territory.
Historically, when the market is in "extreme fear," it often presents a contrarian opportunity. From a Fibonacci retracement perspective, this wave’s high was close to $126,000, falling to about $74,000. The initial rebound resistance is around $86,000, with further upside toward $95,000.
Regulatory Upgrades: New Global Compliance Requirements for Crypto
This event is driving significant changes in the global crypto regulatory landscape. In 2025, crypto-related IPOs surged to unprecedented levels, indicating the market’s belief that digital asset companies are structurally prepared.
Greater regulatory transparency has become a much-needed catalyst.
The "Genius Act," passed mid-2025, established a federal regulatory framework for "permissioned stablecoins," requiring them to be backed by 100% liquid asset reserves.
The "Clarity Act," passed by the House, further advanced this process, aiming to create a unified market structure for digital assets and clearly define the jurisdiction of the SEC and CFTC.
Industry analysts predict that stablecoin circulation will surpass $1 trillion by 2026. This shift is not driven by retail speculation, but by the modernization of corporate financial management.
Investment Strategies: Secure Storage and Platform Selection
With private key security issues in the spotlight, investors must reassess their asset storage strategies. Bitcoin lacks traditional passwords or account systems, and there are no banks or centralized institutions to verify identity.
In the bitcoin ecosystem, the only thing determining whether you can access funds is the private key.
Owning the private key means owning the bitcoin. If you lose the private key, the bitcoin is gone forever. If your private key is leaked, your assets can be transferred instantly by someone else.
In custodial wallets, the private key is managed by the platform’s servers, so users don’t actually hold their own keys. Asset security depends on the platform’s safeguards.
Nearly all major crypto thefts have occurred in custodial settings. Investors should carefully evaluate exchange security measures, including cold storage, proof of reserves, and insurance funds.
Market Outlook: Institutional Entry and Cyclical Shifts
The crypto market is undergoing structural transformation. According to market maker Wintermute, bitcoin’s four-year halving cycle may be over, and institutional products like ETFs are reshaping the market.
In 2025, altcoin rallies lasted an average of only 20 days, compared to over 60 days in 2024.
A handful of major assets absorbed most of the new capital, while much of the market struggled to maintain momentum.
In 2026, catalysts for market expansion may include institutional investment, strong rallies in bitcoin or Ethereum, or the return of retail investors.
ETFs and digital asset trusts have become "walled gardens." They provide sustained demand for large assets, but don’t naturally rotate capital into the broader market.
Conclusion
As of February 11, bitcoin was trading at $67,000 on Gate, with the market’s fear index at an extreme 15. The US Department of Justice’s treasury now holds an additional 127,271 bitcoins, still valued at about $15 billion.
The key to this massive asset seizure wasn’t quantum computers breaking encryption or hackers breaching firewalls—it was a seemingly minor technical detail: the choice of pseudo-random number generator.
As bitcoin ETFs attract a flood of institutional capital, the alarm for private key security has sounded. No matter how noisy the market becomes, the true determinant of asset ownership remains that string of 256-bit numbers: the private key.
