The safety myth of Bitcoin has been broken! The US government seized 127,000 Bitcoins from an electronic fraud group

Nakamoto 2025-10-28 00:00 48759人围观 BTC

On October 14, the U.S. Department of Justice announced that it had confiscated approximately 127,271 Bitcoins held by Chen Zhi, the leader of the "Pig Killing Pan" and founder of the Cambodian Prince Group. Based on the market value on that day, the tota

On October 14, the U.S. Department of Justice announced the confiscation of approximately 127,271 Bitcoins held by Chen Zhi, the leader of the "Pig Killing Pan" and the founder of the Cambodian Prince Group. Based on the market value on that day, the total estimated value was as high as $15 billion. The largest cryptocurrency seizure in history

Many people used to think that it is safest to keep Bitcoin assets in their own wallets without going through any third party. But Chen Zhi’s case shattered this imagination.

His 127,000 Bitcoins were quietly lying in a wallet that he personally controlled, but the US authorities were still able to follow the clues, lock the assets, and eventually took over control of these wallets!

The so-called assets on the blockchain, even if they are decentralized, will still leave traces in the face of real power and technical means, and cannot escape the law.

Is Bitcoin still safe?

The criminal network of the Prince Group

Chen Zhi, who comes from an ordinary family, has been running the Prince Group since 2015, which appears to be a regular enterprise, but secretly has built several fraud parks in Southeast Asia.

They deceive people from all over the place and force them to do one thing: chat with people on the Internet and trick people into investing in virtual currencies. This is what we often hear about the "pig killing plate".

These people are locked up in the park and have no freedom. And their "tools" are thousands of mobile phones, and behind them are countless social accounts. Every day, these accounts are looking for targets, and they could be anyone, or they could be right next to us.

Over the past few years, more than $16.6 billion has been stolen from this type of scam. This is not a number on a screen, but a real loss for many.

Although Chen Zhi is still on the run, this operation by the US government shows that illegal wealth transferred through cryptocurrency is not untraceable. The 127,000 Bitcoins have been successfully confiscated.

How is money "laundered"?

The Prince Group dispersed the defrauded money into 25 cryptocurrency addresses. There are two main sources of this money: one is the Bitcoin mining business he invested in himself, and the other is some exchanges that do not cooperate with the US investigation.

That alone is not enough. In order to make these black money completely "invisible", he used a more complex method, which can be summarized in eight words: "break the whole into pieces, gather the pieces into whole”

How does it work?

For example, a large sum of stolen money will be quickly split into dozens or even hundreds of parts and transferred to countless new addresses, just like sprinkles. This looks like a sum of money suddenly "disappearing" on the chain.
Then, the money scattered everywhere will be quietly gathered into a few core wallets through different paths.

Why bother?

This split is like playing a huge "spot the difference" game. The purpose is to completely cut off the original source of funds and make tracking extremely difficult.

Then give them black money and put them in the guise of "legality". In addition to splitting and merging, Chen Zhi also did another thing: he invested the defrauded money into a large-scale Bitcoin mining business.

He once boasted to others that the business was "very profitable because there are no costs." The “no cost” here is because the start-up funds for purchasing mining machines and electricity bills themselves come from fraud victims.

In this way, the "new Bitcoin" produced by mining seems to have become his legal income. The black money obtained through fraud was "laundered" in this way.

More than just online: A complex global money-laundering web. This huge money laundering system goes far beyond just online operations.

The investigation showed that they used 128 shell companies and 18 related personnel. These companies were registered in multiple overseas regions, and most of them had no real business.

Through them, black money is used to purchase luxury goods such as Picasso paintings, luxury watches, yachts, and private jets, further integrating into the financial system.

How did the United States get those 127,000 Bitcoins?

The underlying logic of Bitcoin is decentralized, and the government cannot directly shut down the network. So how did the US government open Chen Zhi’s encrypted wallets?

The author once again sorted out the entire process that was circulated on the Internet, as follows:

The “digital traces” of crime”
Chen Zhi's money laundering network is too complex for the human brain to remember. Therefore, he and his accomplices chose to store the most important "keys" - the wallet's private key and mnemonic phrase directly in the computer device. This paved the way for subsequent exposure.
The key "code book"”
An important breakthrough in the case came from one of Chen Zhi's subordinates. The Thai police arrested the accomplice during the operation and found the crucial "withdrawal mnemonic" (composed of 12 English words) in his computer. Through international cooperation, this critical tip was handed over to U.S. law enforcement.
From "Word" to "Control"”
After getting this string of words, the US authorities were like getting a code book with a key. Through technical means, they calculated the corresponding specific wallet address and quickly took freezing measures.
The “last mile” of the program”
After taking technical control, the U.S. courts then completed the legal "last mile": they first made a public announcement and asked the owner of the asset to come forward to claim it - of course, no one dared to claim it. In the end, the court adopted legal procedures and officially declared that the huge amount of Bitcoin had been confiscated and belonged to the US government.

At this point, this wealth worth 15 billion US dollars has completed the entire process from criminals to government confiscation.

summary

This confiscation incident forces us to think about a fundamental question: Where will the decentralized world represented by Bitcoin go?

Bitcoin's initial ideal of "transcending sovereignty" is being gradually diluted by reality and is beginning to be incorporated into the existing institutional framework.

This action by the government breaks the illusion of Bitcoin’s “absolute independence”. Decentralized assets are not illegal!

Looking back at the dramatic ups and downs of Bitcoin over the years, it is like a crazy roller coaster, with prices rising and falling, accompanied by news about various scams and money laundering.

In this process, we ordinary people are easily injured. China chooses not to get involved easily, but rather acts as a calm observation and cautious self-protection. It does not necessarily mean rejecting all future possibilities, but rather attaching more importance to keeping ordinary people's pockets first to prevent everyone from becoming a price in immature fanaticism.