Bitcoin News Today: LuBian Bitcoin Heist Revealed After 5-Year Undetected Breach

A blockchain intelligence firm has revealed that one of the largest Bitcoin heist incidents in history occurred in late 2020, when 127,426 BTC were stolen from a Chinese mining pool known as LuBian. The breach, which went undetected for nearly five years, was uncovered through on-chain analysis conducted by Arkham Intelligence. At the time, the stolen Bitcoin was valued at around $3.5 billion, and as of now, the assets are estimated to be worth over $14.5 billion [1].

The theft reportedly involved a breach of LuBian’s custodial security systems, allowing the hacker or group to exfiltrate a significant amount of Bitcoin in a single transaction on December 28, 2020. Approximately 90% of the pool’s Bitcoin was transferred out in a single move, followed by the movement of an additional $6 million worth of funds from another linked address just days later. The pool’s operators reportedly attempted to secure the remaining 11,886 BTC by distributing them across multiple wallets [1].

In a notable move, LuBian’s managers reportedly used the “OP_RETURN” method to send over 1,500 on-chain messages to the attackers in a desperate attempt to recover the stolen funds. These messages, which cost the managers 1.4 BTC, were interpreted by Arkham as communications from the rightful wallet owner [1]. Evidence suggests that the breach may have been facilitated by the use of a substandard private key generation method, which compromised the pool’s security.

Despite extensive investigation, no public attribution has been made to any individual or entity involved in the theft. Arkham traced the movement of the stolen funds but did not identify the perpetrator in its official findings. The lack of attribution has led to speculation but remains unconfirmed [1].

The stolen assets remain largely dormant, with the last recorded movement occurring in July 2024, when some of the funds were consolidated. Based on Arkham’s insights, the affected wallet now ranks as the 13th largest Bitcoin wallet. The pool’s operators and the attackers have not made any transactional steps to recover or utilize the assets since the theft, with Arkham continuing to monitor the related addresses and movements [1].

The incident has reignited discussions about the vulnerabilities in the custodial infrastructure of major mining pools and the broader crypto industry. Analysts have highlighted the risks associated with insufficient key-generation protocols and asset custody practices. While LuBian has not publicly commented on the breach, the event has brought attention to the need for more robust on-chain monitoring and real-time detection systems [1].

The scale of the heist has also intensified scrutiny over the operational resilience of large-scale mining operations. With the stolen funds remaining undisturbed since the breach, concerns persist about how such an incident could go undetected for so long. The incident underscores the risks associated with centralized custodial systems and raises questions about the adequacy of current security frameworks. However, no evidence has been found to suggest that other major crypto assets were involved [1].

The revelation has prompted calls for enhanced security measures across the industry, including the adoption of advanced anomaly detection and blockchain surveillance tools. The LuBian breach now stands as a landmark case in the history of crypto crime, serving as a case study for the vulnerabilities that can exist even in prominent players within the digital asset ecosystem [1].

Source: [1] LuBian Bitcoin Theft Uncovered After Five Years (https://coinmarketcap.com/community/articles/688eef19d638b90b44164df1/)