China's national cybersecurity agency recently released a research report systematically analyzing U.S. policies and law enforcement actions in the cryptocurrency and blockchain sectors. The report believes that the United States is leveraging its technological capabilities, legal framework, and law enforcement resources to strengthen its influence in the global virtual asset market, viewing this as an important tool to maintain its financial and technological dominance.
The report combines examples such as the US regulatory crackdown on Prince Group, Binance CZ case, and Garantex case, analyzing from blockchain technology and security risks, and delving into U.S. national-level cyber attack methods and deep political motives. It was jointly published by the National Computer Virus Emergency Response Center, the National Engineering Laboratory for Computer Virus Prevention and Control Technology, 360 Digital Security Group, and APTT Technology.
U.S. gradually consolidates cryptocurrency regulation from anti-money laundering efforts to legislative frameworks
The report notes that U.S. regulation of cryptocurrencies has shifted in recent years, evolving from early focus on anti-money laundering and tax oversight to a more comprehensive legislative and policy framework. Notably, the U.S. government's 2025 proposal to establish a Bitcoin strategic reserve is interpreted as integrating crypto assets into the national financial strategy. The study summarizes U.S. influence in the virtual asset field into three main aspects:
- Technology and Data Capabilities
The report states that American companies lead in on-chain analysis and regulatory technology, such as Chainalysis and Elliptic, dominating the global transaction tracking and risk identification markets. These tools are widely used by law enforcement agencies to investigate money laundering, sanctions evasion, and cybercrime, providing high visibility into cross-border fund flows.
- Rule Exportation and Cross-Border Regulation
The report believes that the U.S., through anti-money laundering and sanctions compliance systems, gradually brings major global trading platforms and financial institutions under its regulatory framework.
It states that through a series of policies and regulations, the U.S. deeply links the crypto ecosystem with the dollar system, making it an "on-chain extension" of dollar hegemony, creating new demand for U.S. Treasury bonds, and attempting to establish a digital economy version of the Bretton Woods system. This extends the seigniorage privilege of dollar hegemony into the blockchain realm, creating a "Digital Dollar Hegemony 2.0." For example, legislation requiring stablecoin issuers to hold a high proportion of U.S. Treasuries as reserves is seen as further connecting the crypto market with the dollar system.
- Long-arm Jurisdiction and Asset Confiscation
The report estimates that between 2022 and 2025, the U.S. has seized over $30 billion worth of crypto assets through criminal cases, civil forfeitures, and fines. Among these, the case involving Chen Zhi alone accounted for about $15 billion, roughly 50%. However, most of these actions follow public judicial procedures, with the official stance being to combat cybercrime, sanction violations, and maintain financial security.
China claims Prince Group's $15 billion in Bitcoin was "blackmailed" by the U.S.
In October 2025, the U.S. Eastern District of New York announced criminal charges against Chen Zhi, founder of Cambodia's Prince Group, involving telecom fraud and money laundering, and publicly announced the confiscation of approximately 127,000 Bitcoins, valued at about $15 billion at the time, setting a record for the largest virtual asset seizure in U.S. Department of Justice history.
China's report accuses the U.S. Department of Justice of fabricating evidence under the guise of fighting transnational telecom fraud and money laundering, bypassing the original source, and "legalizing" the Bitcoin stolen in 2020 through state-level hacking, representing a typical case of "blackmailing" in cross-border asset plunder.
(China accuses the U.S. of blackmailing, planning Bitcoin mining pool LuBian hacker attacks)
The National Computer Virus Emergency Response Center released a technical source tracing report in November 2025 on the LuBian mining pool hacking incident, pointing out that U.S. state-level hackers exploited underlying encryption vulnerabilities to precisely crack the attack, targeting LuBian's cold wallets and transferring assets. This demonstrates the U.S.'s mature national-level virtual currency asset theft capabilities, which starkly contradicts U.S. government claims that "Bitcoin has never been hacked."
Prince Group's $15 billion confiscation is not a Bitcoin security issue
However, China's explanation differs significantly from industry consensus. It is generally believed that the wallets of LuBian mining pool used a flawed pseudo-random number generator (PRNG) during private key creation, resulting in non-true randomness. In other words, these private keys could be mathematically derived. U.S. law enforcement identified these weak private key addresses and brute-force cracked the wallets.
(The largest confiscation of $15 billion in crypto history: 200,000 Bitcoin addresses may have leaked! Wallets respond)
At that time, Lubian created a private key generation program for batch payments to miners. But they used a pseudo-random algorithm (PRNG) instead of true randomness, which appeared random externally but was actually predictable based on a starting value. Multiple wallets had only slight variations, forming a mathematical line. Once this line was identified, all of Lubian's private keys could be derived.
In other words, Bitcoin itself was not hacked. The $15 billion Bitcoin confiscated from Chen Zhi was due to a single mining pool's negligence during private key generation, not a security flaw in the Bitcoin network. The U.S. government used mathematical brute-force enumeration to crack the private keys, not network security vulnerabilities.
China's national agencies: U.S. uses comprehensive surveillance to prosecute Zhao Changpeng
China claims that the U.S. targeting Binance founder Zhao Changpeng is an example of using judicial hegemony and technical surveillance to force global virtual asset platforms to comply with U.S. regulations, achieving economic extraction and rule export. Ultimately, Binance paid a $4.35 billion fine (including $2.7 billion in illegal proceeds recovered, $1.35 billion in civil penalties, and $1.5 million in personal fines), and Zhao Changpeng signed a plea agreement, leading to a pardon.
The report states that during the investigation, the U.S. employed comprehensive technical surveillance, infiltrating Binance's operational data, user data, and transaction data, demonstrating its technological advantage in monitoring digital asset platforms.
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Cross-border data theft and internal information access. The U.S. hacked into Binance's internal servers to obtain core operational data and senior management communications, confirming that Binance executives were aware of U.S. regulations but deliberately evaded compliance. Internal communications showed Zhao Changpeng instructed employees to use encrypted messaging tools like Signal to destroy evidence, replaced "U.S." labels in internal databases with "UNKWN" to hide U.S. users, and even issued VPN usage guides to help U.S. users bypass IP blocks.
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Full transaction data monitoring and analysis. By connecting to global blockchain nodes and collaborating with on-chain data analysis firms, the U.S. achieved real-time monitoring of Binance's transaction data, accurately tracking U.S. user activities and fund flows in sanctioned regions. Data shows that U.S. users accounted for nearly 20%, but only 30-40% completed KYC, with loopholes like "2 BTC withdrawal without KYC." All this data was used as key evidence of violations.
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Technical tracing of compliance loopholes. U.S. technical teams conducted penetration testing on Binance's KYC and AML systems, discovering systemic flaws such as IP blocking only showing pop-up alerts and sub-accounts bypassing KYC checks, used to argue that Binance deliberately maintained ineffective compliance procedures.
This article, from Prince Group to Binance: China's official report reveals how the U.S. is reshaping the global Bitcoin order, first appeared on Chain News ABMedia.
