According to a report by blockchain analysis firm Arkham, the sudden disappearance of China’s large mining pool Lubian during the last bull market may be related to a previously undisclosed Bitcoin theft case involving 127,000 Bitcoins, which were worth approximately $3.5 billion at the time.
On Sunday, Arkham pointed out on social media platform X that Lubian may have been robbed of 127,426 Bitcoins in December 2020, which, based on current prices, is valued at about $14.5 billion. Arkham identified this incident as the largest cryptocurrency theft in history, far surpassing the Bybit attack in February 2024, which was valued at $1.5 billion.
Source: Arkham
Arkham noted that although hackers almost emptied Lubian’s entire Bitcoin reserves, the incident remained completely unreported for over four years, and neither the mining pool nor the hackers have acknowledged that this breach occurred.
At its peak, Lubian was one of the top ten Bitcoin mining pools globally, accounting for about 6% of the world’s Bitcoin hash rate around mid-2020. However, the mining pool mysteriously ceased operations in early 2021. At that time, external observers generally attributed the cause to regulatory pressure from China and Iran, as it was reported that Lubian’s mining rigs were located in these two countries.
Arkham now speculates that Lubian’s shutdown was a direct consequence of a catastrophic security flaw, which likely stemmed from a defect in its private key generation algorithm, making it vulnerable to brute-force attacks.
As a last resort, Lubian spent 1.4 BTC to send over 1,500 small transactions, embedding messages within the transactions to request the return of the stolen funds. The mining pool also transferred the remaining approximately 11,880 Bitcoins into a recovery wallet.
Currently, Lubian still retains 11,886 Bitcoins, valued at approximately $1.35 billion. Meanwhile, the hackers still possess the stolen Bitcoins, with their last known movement of funds occurring in July 2024 during a wallet consolidation.