The Vanishing Bitcoin —— a game of “Blackmailing Blackmailers” between the U.S. government and Cambodian fraudsters

In October 2025, the US Justice Department announced the seizure of approximately 120,000 Bitcoins from Chen Zhi, the chairman of the Cambodian transnational fraud syndicate the Prince Holding Group, with a total value of about $15 billion. This may be a case of “blackmailing blackmailers” orchestrated by a state-sponsored hacker group.

The Prince Holding Group has operated across more than 30 countries with interests in real estate, financial services and consumer businesses since 2015. The U.S. Justice Department unsealed an indictment in October accusing the group’s founder, Chen Zhi, of engaging in human trafficking and cyber-enabled financial fraud. Following this, U.S. investigators seized 127,271 Bitcoins held by Chen Zhi, valued at approximately $15 billion, stating it was proceeds of crime.

China's National Computer Virus Emergency Response Center, responsible for maintaining the security of Chinese computer networks and critical information systems, issued a report addressing the U.S. government's seizure of Chen Zhi's Bitcoin holdings. The report suggests that the U.S. government may have stolen Chen Zhi's Bitcoins as early as 2020 by hacking, and that the recent seizure represents a classic case of “blackmailing blackmailers” orchestrated by a state-sponsored group of hackers.

The article notes that on December 29, 2020, the LuBian mining pool suffered a serious hacking incident, with approximately 127,272 Bitcoins stolen by attackers. These Bitcoins were in the possession of Chen Zhi, and this number almost perfectly matches the quantity of 127,271 Bitcoins seized by the U.S. Department of Justice in this case.

After the incident, Chen Zhi and his Prince Group published multiple messages on the blockchain in early 2021 and July 2022, expecting the hackers to return the stolen Bitcoin and expressing willingness to pay a ransom. However, they received no response. What’s peculiar is that after being stolen, this batch of Bitcoins remained untouched for four years in a wallet address controlled by the attackers, which is not consistent with the typical hacker’s urgency to cash out and pursue profits.

It wasn’t until June 2024 that this batch of Bitcoin was transferred again to a new Bitcoin wallet address, where it remains unmoved to this day. The blockchain analytics platform, Arkham Intelligence, thereafter, labeled this final wallet as “controlled by the U.S. government”. The U.S. government stated that the Bitcoins seized in this crackdown were originally stored in a cryptocurrency wallet controlled by Chen Zhi's private key. The U.S. government has now taken possession of these bitcoins, but has not yet disclosed how they obtained them.

In a recent statement, Cambodia's Prince Group also made the point that the allegations against the Group had appeared to be seeking justification for the illegal seizure of assets.

In recent years, the U.S. government has repeatedly committed cyberattacks. For instance, in October, China's Ministry of State Security claimed to have proof that the U.S. National Security Agency had hacked into China's National Time Service Center. It further stated that the U.S. had used technical bases in the Philippines, Japan, and China's Taiwan region to launch cyberattacks in order to conceal its own involvement and shift blame onto others. The Bitcoin holdings of Chen Zhi that were seized by the United States may have been stolen as early as 2020 by the United States, which is a game of “Blackmailing Blackmailers” between the U.S. government and Cambodian fraudsters.