People ran away but the money stayed! The US accurately harvested the Cambodian BCH group, with 15 billion Bitcoin injected into the treasury!

Written by: White55, Mars Finance

The U.S. Department of Justice has made a record seizure of $15 billion in Bitcoin, revealing the national cryptocurrency strategic reserve.

The U.S. Attorney's Office for the Eastern District of New York, along with the National Security Division, announced in a joint statement released on October 14 that the U.S. government has filed a civil forfeiture lawsuit against approximately 127,271 bitcoins and successfully seized this batch of assets worth about $15 billion. This batch of cryptocurrency is closely related to a large “pig butchering” scam network based in Cambodia, which is manipulated by Chen Zhicao, the founder of the Cambodian Prince Holding Group. This action represents the largest cryptocurrency asset seizure in the history of the U.S. Department of Justice, far exceeding the 94,000 bitcoins seized in the 2022 Bitfinex hacker case. It also further increases the total amount of bitcoins held by the U.S. government, bringing it closer to the “cryptocurrency strategic reserve” target proposed by the Trump administration.

Major Case Unveiled: The Prince Group's Fraud Empire and the $15 Billion Bitcoin Seizure Case

The U.S. District Court for the Eastern District of New York formally charged Chinese citizen Chen Zhi (also known as Vincent) on October 8, accusing him of building a transnational criminal network in over 30 countries through the Prince Group of Cambodia, carrying out large-scale cryptocurrency investment fraud.

The indictment shows that the Chen Zhi gang operated at least 10 fraud parks in Cambodia, causing global victims to suffer losses of billions of dollars through the “pig butchering” scam. The civil forfeiture lawsuit points to approximately 127,271 bitcoins, which are currently under the control of the U.S. authorities. The U.S. Department of Justice emphasizes that this batch of crypto assets was obtained by the defendants through fraud and money laundering activities, originally stored in non-custodial wallets under their control, and the U.S. authorities have now obtained the private keys and taken over the fund storage addresses. According to on-chain analysis firm Arkham, this batch of bitcoins is highly associated with the assets of the LuBian mining pool, which were suspected to be stolen in 2020. LuBian is a bitcoin mining pool that has facilities in China and Iran, and the stolen assets were worth approximately $3.5 billion at the time of the incident, now valued at over $14 billion.

The Inside Story of Pig Slaughtering: A Combination of Forced Labor Camps and Modern Slavery

The Prince Group is superficially one of the largest conglomerates in Cambodia, with businesses covering various fields such as real estate, finance, aviation, charity, and hospitality. Chen Zhi himself has also attended public events multiple times as a “Chinese entrepreneur” and received coverage from Cambodian official media. However, according to U.S. prosecutors, this criminal network is described as a “combination of modern slavery and high-tech fraud.” The Prince Group has set up multiple “forced labor scam camps” within Cambodia, detaining and controlling hundreds of trafficked individuals. In these camps, detainees are forced to participate in online investment scams, reaching out to global victims through social media, dating apps, and other channels, using “high-yield investments” or “emotional trust” as bait to lure victims into transferring cryptocurrency into wallet accounts controlled by the group.

Scammers typically spend weeks or even months building trust, gradually leading victims to “invest,” and ultimately cut off communication or block them after the funds have been transferred, resulting in huge losses. A Department of Justice document points out that hundreds of people have been lured or trafficked to Cambodia and forced to engage in cryptocurrency investment scams in scam parks.

Pursuit and Technology: Large Money Laundering Networks and On-Chain Asset Tracking

Chen Zhi closely collaborates with the vice-chairman and financial assistants of the management of Taizi Group Holdings' subsidiaries to manipulate the flow of billions of dollars in illegal funds. These accomplices oversee the operations of both legal and illegal activities and liaise with banks, government officials, and other partners on behalf of Chen Zhi. Law enforcement agencies described a layered money laundering process: stolen cryptocurrency is repeatedly transferred through small-scale dispersion and consolidation across numerous wallets, designed to thwart blockchain analysis. The civil complaint from the U.S. Department of Justice identifies specific address clusters and transaction flows that it claims can be traced back to corporate criminal activities. Investigators identified wallet clusters and transaction patterns attributed to the operations of Prince Group. The complaint traces the funds through repeated “spraying” (small-scale dispersion) and “funneled” (cross-wallet consolidation) techniques used to obscure the source.

The U.S. Department of the Treasury has designated the Prince Group as a transnational criminal organization and imposed sanctions on Chen Zhi and related individuals and entities. Chen Zhi is currently still at large, and the U.S. has issued requests for assistance to multiple countries, freezing related accounts and real estate assets.

U.S. Cryptocurrency Strategic Reserve: From Law Enforcement Seizures to National Strategy

The 127,000 bitcoins confiscated this time will further expand the already massive cryptocurrency holdings of the U.S. government. As of March 2025, the U.S. government holds approximately 200,000 bitcoins, primarily sourced from criminal assets seized by the Department of Justice. The Trump administration proposed including cryptocurrencies like bitcoin as part of the national strategic reserve assets, marking a transition for the U.S. from “petroleum hegemony” to “digital asset hegemony.” This strategy can be traced back to July 2024, when Senator Cynthia Lummis submitted the “Bitcoin Act of 2024,” which plans to gradually establish a national reserve of 1 million bitcoins through annual purchases.

The advancement of the U.S. cryptocurrency strategic reserve faces two major paths: on one hand, Trump plans to issue a presidential executive order instructing the Treasury to use the Exchange Stabilization Fund to directly allocate Bitcoin, bypassing the congressional approval process; on the other hand, the BITCOIN Act needs to pass votes in both the House and Senate, with core controversies including sources of funding, reserve scale, and custody mechanisms. This confiscation action subtly echoes the U.S. government's cryptocurrency strategic reserve plan. The Justice Department emphasized in a statement that “cryptocurrency is not a safe haven for criminals.” Investigators are able to trace funds through the blockchain, indicating that even complex money laundering methods are difficult to completely evade regulatory oversight.

Historical Cases and Patterns: How the U.S. Government Handles Seized Cryptocurrency

The U.S. government has established a certain pattern in dealing with confiscated cryptocurrencies. From historical cases, the total time from the arrest of those involved, the seizure of the funds, to the start of processing Bitcoin typically does not exceed 3 years. Usually, in cases where the judgment is effective and a guilty plea is entered, the processing of the involved Bitcoin will begin relatively quickly.

For example, in the “Silk Road” case, Bitcoin was seized in October 2013, and the first auction took place in June 2014. The U.S. government does not sell large amounts of Bitcoin all at once, but sells in batches to address market liquidity. For instance, in the Silk Road case, law enforcement agencies auctioned off the initially seized Bitcoin in the years following Ross Ulbricht's arrest: approximately 29,656 Bitcoins were auctioned in June 2014, about 50,000 Bitcoins in December 2014, around 50,000 Bitcoins in March 2015, and approximately 44,000 Bitcoins in November 2015.

Currently, major cases worth noting include: the seizure of 94,000 bitcoins from the Bitfinex hack (seizure date in February 2022) and the seizure of over 69,370 bitcoins from Individual X's hack (trial date in August 2023). The outcomes of these cases will provide precedents for the handling of the 127,000 bitcoins seized this time.

Global Impact and Future Trends: Geopolitical Games in the Era of Digital Gold

The U.S. cryptocurrency strategic reserve has triggered a chain reaction: not only causing violent fluctuations in Bitcoin prices but also prompting the Norwegian Sovereign Fund, Singapore's GIC, and others to begin evaluating Bitcoin allocation plans, pushing Bitcoin's market value to surpass $2 trillion. The U.S. is promoting Bitcoin as a reserve asset, while China is betting on central bank digital currency, and the European Union is exploring the path of ETH compliance, forming a tripartite balance of power. This differentiation represents the competition between different strategic paths for digital assets. Some analysts believe that if the U.S. successfully establishes a Bitcoin reserve, it could impose “crypto sanctions” on countries like Iran and North Korea that are seeking to de-dollarize, freezing their on-chain assets. This would be a new method of financial sanctions. In response to the impact of the U.S. cryptocurrency strategic reserve, Hong Kong is consolidating its Web3 position by accelerating the issuance of VASP licenses, launching a stablecoin sandbox, and establishing an ecological fund. This reflects how different jurisdictions respond to the U.S. digital asset strategy. This confiscation action also demonstrates the global expansion of U.S. law enforcement capabilities. The U.S. Department of Justice has stated it will cooperate with multiple Southeast Asian governments to investigate other leaders of the Prince Group and overseas financial institutions involved in money laundering. This case is just part of the U.S. action against Asian “pig butchering” networks; the Department of Justice is investigating other scam camps and the flow of crypto funds located in Myanmar, Laos, the Philippines, and Malaysia.