Bitcoin News Today: Arkham Reveals $14.5B Bitcoin Theft via LuBian's Key Flaw

Arkham Intelligence, a leading blockchain analytics firm, has uncovered what may be the largest Bitcoin theft in history. According to its investigation, a Chinese mining pool known as LuBian lost 127,426 BTC in December 2020, valued at approximately $3.5 billion at the time. With Bitcoin’s price increase, the stolen assets are now estimated to be worth $14.5 billion [1]. This theft far exceeds the infamous 2014 Mt. Gox breach, which involved the theft of 25,000 BTC.

The attack occurred in two phases: on December 28, 2020, over 90% of LuBian’s BTC reserves were drained, and a further $6 million in BTC and USDT was stolen a day later from a wallet on Bitcoin’s Omni layer. LuBian attempted to recover the stolen funds by rotating the remaining assets to new wallets and sending 1.4 BTC in 1,516 transactions as recovery messages embedded in blockchain data. These messages were part of a direct communication effort with the hacker [1].

Arkham’s analysis suggests that the breach was made possible by a critical flaw in LuBian’s private key generation algorithm, which was vulnerable to brute-force attacks. Despite the massive theft, LuBian retained control of 11,886 BTC, valued at $1.35 billion [1]. The stolen funds, however, have remained largely dormant, with the last known activity being a wallet consolidation in July 2024. There is no evidence that the funds have been laundered or cashed out, raising ongoing concerns about the security of digital assets and the risks associated with custodial operations.

The incident underscores the vulnerabilities in key management practices across the crypto industry. It also highlights the importance of robust cybersecurity measures in mining and custodial operations. The revelation has reignited discussions about transparency and the need for stronger security protocols to protect large-scale crypto holdings [1].

In parallel, Bitcoin is currently approaching a critical weekly close. After breaking down from a consolidation range, the price dropped below the $115,724 key support level, reaching a local low of $112,104. The current price of around $112,726 is above the 50-day moving average but significantly higher than the 100-day and 200-day averages, signaling a long-term bullish trend. However, the rejection near the $122,000 resistance level indicates growing selling pressure. A weekly close below $115,724 would confirm a breakdown and open the door for further declines toward the $110K–$112K range [1].

Conversely, a rebound above $115,724 before Sunday’s close would indicate strength and invalidate the breakdown, maintaining the bullish structure. The volume during the decline has been moderate, suggesting that this is a correction rather than a reversal of the broader trend. The next 48 hours will be crucial, as the weekly close could determine Bitcoin’s direction for the coming weeks [1].

Source: [1] Arkham Uncovers $3.5B Bitcoin Heist: The Largest Crypto Theft In History? (https://bitcoinist.com/arkham-uncovers-bitcoin-heist-largest-theft-history/)