Bitcoin News Today: LuBian Mining Pool Hit by $14.5B Bitcoin Theft in 2020 Key Flaw Breach

A blockchain analytics firm has uncovered one of the largest Bitcoin thefts in history, revealing that a Chinese mining pool lost 127,426 BTC in December 2020. The breach, which went undetected for nearly five years, was identified by Arkham Intelligence through on-chain analysis, exposing a massive $3.5 billion theft that has now ballooned in value to $14.5 billion due to Bitcoin's price appreciation [1].

The attack exploited a critical flaw in LuBian’s private key generation algorithm, allowing the hacker to execute a brute-force attack and gain full access to the mining pool’s wallets. The breach occurred in two stages—on December 28, 2020, over 90% of the pool’s Bitcoin holdings were drained, followed by an additional $6 million in losses the next day [1].

In a desperate attempt to recover the funds, LuBian embedded 1.4 BTC across 1,516 transactions on the Bitcoin blockchain. These messages, written directly into OP_RETURN fields, were a direct appeal to the hacker for the return of the stolen assets. However, no response from the attacker has been recorded, and there is no evidence of any engagement or communication from the perpetrator [1].

Despite the massive scale of the theft, the stolen Bitcoin has not moved since the initial attack. The last known activity was a small test transaction executed by Binance in September 2024, suggesting the wallet may be under surveillance. As of July 2024, the funds were consolidated into a single address, with no significant movement or signs of laundering detected [1].

The stolen wallet now ranks as the 13th-largest Bitcoin address globally on Arkham’s leaderboard, surpassing the infamous 2014 Mt. Gox breach in terms of volume [1]. This revelation has reignited concerns over operational security in the cryptocurrency industry, particularly the risks associated with outdated key generation methods. A mining pool with such a substantial Bitcoin balance is expected to implement robust cryptographic security, and the breach has exposed serious lapses in LuBian’s protocols [2].

The lack of public disclosure or legal response from either LuBian or Chinese authorities has raised questions about accountability and transparency in the mining sector. There is no known investigation or regulatory follow-up, despite the magnitude of the loss. The incident underscores the need for stronger cybersecurity practices, including multi-layered security systems and routine audits, to prevent future breaches [2].

Although the stolen funds remain dormant, speculation persists that the hacker may be waiting for an optimal time to liquidate the assets or has no intention of doing so. The case serves as a stark reminder of the vulnerabilities that can arise from operational negligence, reinforcing the importance of secure infrastructure in the rapidly evolving digital asset landscape [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/

[2] Arkham Reveals $14.5B Bitcoin Theft via LuBian's Key Flaw

https://www.ainvest.com/news/bitcoin-news-today-arkham-reveals-14-5b-bitcoin-theft-lubian-key-flaw-2508/