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Anatomy of a Conspiracy: A Forensic Analysis of the Chen Zhi Forfeiture, the LuBian Hack, and the Geopolitics of Cryptocurrency

by Gemini 2.5 Pro, Deep Research. Warning, LLMs may hallucinate!

I. Executive Assessment: Fact, Misinterpretation, and Disinformation in the 127,000 BTC Seizure

This report provides a forensic analysis of a complex conspiracy theory alleging the United States government orchestrated a $15 billion Bitcoin theft, subsequently disguising it as a legal asset forfeiture. The analysis of the transcript and associated evidence reveals that the narrative is not simple disinformation but a sophisticated “truth-sandwich” structure. It functions by wrapping a false central accusation—that the U.S. government hacked and stole 127,000 Bitcoin (BTC) in 2020 via a secret “backdoor”—inside a verifiably complex and largely accurate macroeconomic observation. This observation, which forms the alleged motive, is that the U.S. is strategically leveraging the cryptocurrency ecosystem, particularly USD-backed stablecoins, to create a new global buyer base for U.S. Treasury debt, thereby reinforcing the dollar’s global dominance.

The core of the disinformation narrative—specifically, the allegation that the U.S. government acted as a “state-level hacking organization” ¹ to steal the funds, only to “legalize” the theft five years later with a manufactured legal justification—originates directly from a technical analysis report published by China’s National Computer Virus Emergency Response Center (CVERC).¹ The transcript is, therefore, a propagation of this specific, state-sponsored counter-narrative.

A comprehensive, evidence-based assessment of the claims leads to the following key findings:

1. Confirmed (Core Timeline): The central timeline of events is factually accurate. A massive hack occurred on or around December 29, 2020, resulting in the theft of approximately 127,272 BTC ¹ from a mining pool (LuBian) owned by Chen Zhi.²These funds remained dormant for nearly four years before being moved in June 2024.³ In October 2025, the U.S. Department of Justice (DOJ) announced a civil forfeiture of approximately 127,271 BTC ⁵ linked to Chen Zhi. Blockchain analysis confirms the funds seized in 2025 are the exact same funds stolen in 2020.¹

2. Confirmed (Geopolitical Motive): The transcript’s most complex economic claim is substantially correct. The U.S. government is engaged in an open and public strategy to co-opt dollar-backed stablecoins. Federal Reserve officials have explicitly noted that this new demand for digital dollars “lowers borrowing costs for the U.S. government” ⁷ and “contribut[es] to the dollar’s dominance”.⁷ This strategy, codified in legislation like the GENIUS Act ⁸, aims to create a new, global, and captive buyer base for U.S. Treasury bonds.⁹

3. Debunked (Technical Method): The claim that the theft was enabled by a “backdoor” in the Bitcoin protocol is demonstrably false. There is zero evidence of a protocol-level flaw.¹² Research, including the CVERC report itself, provides a definitive, alternative explanation: a catastrophic implementation flaw in the victim’s(LuBian’s) own wallet software, which used a weak 32-bit pseudo-random number generator, making the private keys trivial to brute-force.³

4. Debunked (Victim Portrayal): The transcript’s portrayal of the “victim” is a gross and deliberate omission. “A Cambodian Chinese named Chen Zhi” is not a simple citizen. The U.S. DOJ identifies him as an indicted fugitive ⁵ and the alleged chairman of the Prince Holding Group, a U.S.-designated Transnational Criminal Organization (TCO).¹⁵ He is charged with operating a vast network of “forced-labor scam compounds” ⁵ that perpetrated “pig butchering” scams, stealing billions of dollars from victims worldwide.¹⁵ The seized funds are identified by the DOJ as the proceeds of these crimes.⁵

5. Unsubstantiated (The Central Accusation): The core allegation—that the U.S. government itself executed the 2020 brute-force attack ¹—remains an unproven assertion by a geopolitical rival. The 4-year dormancy of the funds ¹ is the primary “evidence” cited, but it is circumstantial and does not preclude other hypotheses.

This report will now forensically deconstruct each of these elements, separating verifiable fact from strategic disinformation.

II. The Central Incident: Deconstructing the $15 Billion Forfeiture

A. The Subject: Chen Zhi and the Prince Group Criminal Empire

The transcript’s narrative hinges on a deliberate and critical oversimplification: the characterization of the funds’ owner as merely “a Cambodian Chinese named Chen Zhi”. This portrayal, which frames the U.S. government action as an arbitrary “robbery”, is an inversion of victimhood.

The individual in question is Chen Zhi, also known as “Vincent,” a 37-year-old Cambodian national ⁵ and the founder and chairman of the Prince Holding Group, a multinational conglomerate based in Cambodia.⁵ On October 14, 2025, an indictment was unsealed in federal court in Brooklyn, New York, charging Chen Zhi with wire fraud conspiracy and money laundering conspiracy.⁵

According to the U.S. Department of Justice (DOJ), Chen Zhi allegedly directed the Prince Group’s operation of “forced-labor scam compounds” across Cambodia.⁵ These compounds allegedly held individuals against their will, compelling them to engage in “pig butchering” cryptocurrency investment fraud schemes that stole billions of dollars from victims in the United States and around the world.⁵ These operations reportedly involved horrific conditions, including compounds surrounded by barbed wire where trafficked workers were beaten or tortured if they failed to meet quotas.¹⁷

Simultaneous with the indictment, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Prince Group as a Transnational Criminal Organization (TCO).¹⁵ This action, coordinated with U.K. officials, imposed sweeping sanctions against 146 associated entities and individuals.¹⁵ Chen Zhi himself is designated as “at large” by the Justice Department.⁵

The 127,271 BTC seized by the U.S. government are, according to the official civil forfeiture complaint, “proceeds and instrumentalities of the defendant’s fraud and money laundering schemes”.⁵ This context is entirely omitted from the transcript, which inverts the narrative to paint the U.S. as the criminal and the indicted head of a TCO as the victim.

B. The Asset: Correcting the Record on the “LuBian” Hack

The transcript claims the incident began with a hack of the “world’s largest Bitcoin mining pool, Ruben” or “Ruan pool”. This appears to be a transcription error. The research materials discussing “Ruben” ²⁰ show no connection to a 2020 Bitcoin mining pool hack.

The actual entity, as identified by blockchain analysis firm Elliptic ⁶ and the CVERC report ¹, was the “LuBian” mining pool. LuBian was a significant bitcoin mining business with operations in China and Iran, which at one point reportedly controlled nearly 6% of the global Bitcoin hash rate.⁶ Elliptic’s analysis identifies LuBian as one of the mining businesses operated by Chen Zhi’s Prince Group.⁶

Despite the name error, the transcript’s other details are highly accurate, pointing to a common and detailed source:

• Date: The hack occurred on or around December 29, 2020.¹

• Amount: The theft totaled 127,272.069 BTC.²

• Owner: The funds belonged to Chen Zhi.¹

Crucially, the central claim that connects the two main events is confirmed as fact. The 127,271 BTC targeted in the DOJ’s 2025 civil forfeiture action are the same bitcoins“stolen” from the LuBian pool in 2020.¹ The DOJ indictment itself lists the 25 Bitcoin addresses where the funds were held, which Elliptic identifies as the LuBian addresses controlled by Chen from which the bitcoins were “stolen”.⁶ This factual link is the lynchpin upon which the entire conspiracy theory is built.

C. The Timeline: The “Strange” Dormancy and Reactivation

The transcript correctly identifies the most suspicious element of the case: “what’s strange is that for more than 4 years, the stolen bitcoins will never be spent”. This dormancy is also the central pillar of the CVERC’s allegation. CVERC’s report argues that this behavior “deviates from the typical pattern of quick liquidation of gains” and instead “resemble[s] a precision operation orchestrated by a ‘state-level hacking organization’”.¹

The detailed timeline of the asset, reconstructed from the technical reports, confirms this anomaly.

The timeline confirms the factual basis for the suspicion. The 3.5-year delay between the theft and the first movement of the funds, followed by the DOJ’s announcement of a seizure of those same funds, is the anomaly that the CVERC report exploits to build its “thieves falling out” narrative.¹

III. Technical Analysis: The “How” of the Theft and Seizure

A. The Core Question: “How did the US manage?”

The transcript poses the core technical question: “isn’t the cryptocurrency supposed to be safe? You can’t take it without a private key, right?”. It then presents a false dichotomyas the only possible answer: “it means either the technology has flaws or the US intentionally built in a back door”.

Continue reading here (due to post length constraints): https://p4sc4l.substack.com/p/gemini-25-pro-this-report-provides