Data from Galaxy Research reveals that since March, the US Treasury Department has been authorized to retain confiscated digital currencies within a designated “Strategic Bitcoin Reserve.”
Following the inclusion of assets seized during the Prince Group investigation, this reserve expanded by an impressive 64% overnight. As a result, the US government’s Bitcoin holdings now exceed those of every institution except MicroStrategy.
Galaxy Research highlighted that this operation represents the largest asset seizure ever conducted by the US Department of Justice, involving 127,271 Bitcoins valued at roughly $15 billion.
The probe centers on Chen Zhi, chairman of Cambodia-based Prince Holding Group. Authorities accuse Chen of orchestrating an extensive criminal enterprise engaged in online illicit activities, forced labor camps, and investment fraud schemes commonly referred to as “pig-butchering.” The illegal profits were allegedly funneled through cryptocurrency mining firms such as Warp Data (operating between Laos and Texas) and LuBian (based in China).
LuBian gained notoriety in 2020 due to a significant private key vulnerability dubbed “Milk Sad,” which led to thefts totaling 127,000 BTC. Notably, wallet addresses cited in the DOJ’s recent indictment correspond with those linked to LuBian.com—targets compromised because of weak encryption during that timeframe.
According to Galaxy’s findings, Prince Group and LuBian are not independent entities but rather interconnected branches within one overarching criminal syndicate. The FBI confiscated wallet keys personally controlled by Chen Zhi uncovering over 127,000 BTC. Although Chen remains at large currently, he has been added to OFAC’s sanctions list.
This move aligns with Washington’s updated fiscal policy introduced via an executive order last March mandating that seized digital assets be retained as part of government reserves instead of being liquidated immediately. Consequently, the United States is positioning Bitcoin similarly to gold—as a valuable store-of-value asset often called “digital gold.”
The latest confiscation means America’s Strategic Bitcoin Reserve now holds approximately 3.5% equivalent value compared against its national gold reserves when measured in dollars. Galaxy Research states: “Apart from MicroStrategy,” the U.S. government stands as the world's largest holder of Bitcoin.”
*This information does not constitute financial advice.*