U.S. DOJ Moves to Forfeit $15B in Bitcoin Tied to Global Fraud Ring

Government Pursues Legal Claim to 127,000 BTC Seized in Cambodia-Based Case as LuBian Wallet Transfers $1.3B

TL;DR:

• U.S. prosecutors seek forfeiture of 127,271 BTC worth about $15 billion, allegedly linked to a transnational crypto fraud network.
• The Justice Department will gain control of the Bitcoin only if the defendants, led by Cambodia-based Chen Zhi, are convicted.
• A LuBian-linked wallet shifted 11,886 BTC — roughly $1.3 billion — shortly after the case was announced, marking its first movement in three years.

Federal prosecutors unveiled one of the largest cryptocurrency-related forfeiture cases in U.S. history, filing a claim to seize more than 127,000 Bitcoin tied to an alleged global investment and human trafficking scam run by Cambodian businessman Chen Zhi, founder of Prince Holding Group. The filing, unsealed on October 14, 2025, details a wide-ranging scheme that prosecutors say laundered billions in stolen funds through mining operations, shell companies, and digital asset exchanges. The Justice Department is seeking to confiscate the Bitcoin — valued at around $15 billion by current crypto price index data — if Chen and his co-conspirators are convicted on charges of wire fraud and money laundering conspiracy.

Court records show the Department of Justice filed its claim in the Eastern District of New York, marking what it described as one of the most significant efforts yet to recover crypto assets tied to organized financial fraud. The Treasury’s Office of Foreign Assets Control simultaneously sanctioned Prince Holding Group and affiliated entities, freezing related bank accounts and property portfolios allegedly used to conceal illicit proceeds. Federal officials clarified that the seized Bitcoin remains in government custody but will not be formally added to U.S. reserves unless the court authorizes forfeiture after conviction.

The Justice Department described the case as “a major strike against cyber-enabled human trafficking and financial crimes.” Analysts estimate the government currently controls roughly 198,000 BTC from previous seizures such as Silk Road and Bitfinex, and if the new forfeiture proceeds, total holdings could surpass 325,000 BTC — worth about $36 billion at current coin market cap valuations. The case also aligns with a broader U.S. strategy to formalize digital asset reserves under a strategic Bitcoin holding framework established earlier this year by executive order.

Blockchain analytics firms observed unusual network activity in parallel with the DOJ’s announcement. A wallet long associated with LuBian, a Chinese-Iranian mining operation, transferred about 11,886 BTC worth roughly $1.3 billion — its first movement in three years. The initial transaction moved 9,757 BTC, or approximately $1.1 billion, followed by another 2,129 BTC valued near $238 million. Analysts at Lookonchain and Arkham Intelligence flagged the transactions, noting the timing came within a day of the DOJ’s forfeiture filing. Some researchers speculated that the transfers could represent an attempt to reposition funds in anticipation of potential legal or enforcement risk.

Elliptic’s analysis linked the LuBian wallet to a 2020 breach that reportedly drained 127,426 BTC — then valued at $3.5 billion — through vulnerabilities in key generation software. Messages embedded in those historic transactions pleaded for the return of stolen coins, offering rewards to the hacker. While the Justice Department has not confirmed whether the seized assets stem from that same incident, investigators acknowledged notable overlaps in wallet lineage and transaction behavior.

According to the unsealed filings, Chen’s alleged network relied on a complex system of laundering channels, including Laos-based and Texas-based mining operations that converted tainted proceeds into newly mined Bitcoin. These businesses were described as generating “clean” digital assets to obscure the trail of criminal funds. Treasury disclosures also list luxury real estate holdings connected to Chen and his partners, such as a £12 million mansion, a £95 million London office property, and several high-end flats across the city’s financial districts that have since been frozen under sanctions orders.

The pending forfeiture has drawn international attention because of its potential scale and implications for government-held crypto reserves. Legal experts emphasize that the Bitcoin remains evidence in an active criminal proceeding, not a finalized state asset. If courts ultimately approve the DOJ’s forfeiture claim, the holdings could be sold, retained as part of the strategic Bitcoin reserve, or managed through existing asset disposal channels depending on Treasury policy.

Market observers said the broader crypto price environment showed minimal disruption despite the magnitude of the filing. Major exchanges reported stable liquidity levels, while on-chain data suggested limited spillover effects. Traders continued to monitor wallet activity for signs of additional large-scale transfers. Analysts noted that U.S. government control of even a fraction of total Bitcoin supply introduces new considerations for long-term liquidity, particularly as shifts in public holdings can subtly influence global crypto price index calculations over time.

This article has been refined and enhanced by ChatGPT.