Cambodia has detained and extradited Chen Zhi, the alleged operator of a sprawling “pig-butchering” and on-line fraud community, to China, creating a brand new query for crypto markets and legislation enforcement: what occurs to the Bitcoin nonetheless linked to him on-chain.
The arrest and handover have been introduced by Cambodian authorities this week after what officers described as months of joint investigative cooperation with Beijing. Chen’s Cambodian citizenship had been revoked by royal decree in December 2025, in response to studies from regional and worldwide retailers.
Reuters reported on Tuesday that Cambodia extradited three Chinese language nationals: Chen Zhi, Xu Ji Liang, and Shao Ji Hui, and that officers didn’t present particulars of the underlying allegations of their public assertion.
Bitcoin Windfall For China?
For Bitcoin, the rapid hook is the dimensions and obvious stasis of the remaining BTC footprint that Galaxy Digital’s head of firmwide analysis Alex Thorn says might be traced to Chen’s orbit. In a collection of posts on X, Thorn highlighted that US authorities beforehand seized 127,000 BTC related to the group, info that was unsealed in October 2025, however that Chen “nonetheless has greater than $2bn in BTC.”
pig-butchering rip-off king Chen Zhi arrested in Cambodia, extradited to China. the US beforehand seized 127k BTC from wallets related to this group (information unsealed in October 2025)
however zhi nonetheless has greater than $2bn in BTC. that is a pleasant pile of corn for the Chinese language 🌽 pic.twitter.com/jPQaflER8i
— Alex Thorn (@intangiblecoins) January 7, 2026
Thorn added: “we recognized 23,191 BTC related to him,” break up between 7,234 BTC nonetheless sitting in wallets tagged to Prince Group/LuBian and 15,957 BTC that, he stated, was moved out of OFAC-sanctioned wallets into new addresses shortly after the October unsealing.
Thorn framed the jurisdictional dilemma bluntly. “The US has an indictment for him however now that China is holding him there is no means the US will seize him,” he wrote. “Stays to be seen what occurs with these 23k BTC we have recognized. None of it has moved since he was arrested or extradited.”
Thorn additionally pointed again to a element that has lingered over the US forfeiture: the “Milk Unhappy” weak-entropy difficulty tied to LuBian wallets, which created a long-running idea that the 2020 compromise of a significant mining pockets cluster was much less simple than it appeared.
A Galaxy Analysis temporary revealed in October described the DOJ’s motion as its “largest-ever asset forfeiture,” saying US authorities seized 127,271 bitcoins and centered the case on Chen, whom prosecutors accused of operating a “vertically built-in felony conglomerate” spanning on-line playing, forced-labor compounds, and pig-butchering scams.
The temporary argued that the court docket paperwork listed pockets addresses that matched “1-for-1” a set of weak-entropy LuBian wallets recognized by cybersecurity researchers, however that these wallets “had practically zero bitcoin in them on the time of seizure,” with the seized BTC coming “virtually solely from wallets related to the Lubian.com exploiter.”
That historical past issues as a result of it reframes the open query across the 23,191 BTC Thorn says stays identifiable in the present day. If Thorn’s monitoring is correct, the subsequent transfer is about which jurisdiction, if any, can really attain the cash.
At press time, BTC traded at $90,374.
Featured picture created with DALL.E, chart from TradingView.com
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