Prince Group and Chen Zhi’s $15 Billion Bitcoin Seizure Under Fire
A dramatic new court filing in the United States District Court for the Eastern District of New York is raising questions about the largest Bitcoin forfeiture cases ever brought by the federal government concerning the Prince Group and Chen Zhi. The case centers on approximately 127,271 Bitcoin, that the Department of Justice alleges is connected to criminal activity. However, according to a March 10, 2026 motion filed by attorneys for claimant Chen Zhi, the government’s case may be built on misidentified images, unexplained evidence, and major gaps in the timeline of how federal authorities obtained the cryptocurrency.
Chen Zhi’s Court Filing
Understanding the Problems with the DOJ’s Case
U.S. authorities allege the Prince Group and Chen Zhi were involved in a global pig-butchering cryptocurrency fraud scheme that used fake online investment platforms to steal money from victims worldwide. Prince Group and Chen Zhi deny the DOJ’s charges and are innocent until proven guilty. The docket for this case is: USA v. Approximately 127,271 Bitcoin, 25-CV-5745.
Mr. Zhi’s filing argues that photographs cited by prosecutors as evidence of criminal conduct appear to have been taken from unrelated internet sources. According to Chen Zhi, one photograph presented as evidence of a criminal “phone farm” appears to originate from a Chinese-language news article discussing the use of mobile phones to artificially inflate viewership for e-commerce livestreams, not any criminal operation tied to the defendants. Another image referenced by prosecutors as evidence of violent conduct appears to have originated from an online article describing a bizarre accident during COVID-era lockdowns, in which a man’s testicles became stuck between the slats of a plastic chair. According to the filing, the image was presented in the government’s case as though it depicted injuries connected to criminal activity of the Prince Group, despite its unrelated origin.
Attorneys for the claimant argue that these images raise serious concerns about the accuracy and reliability of the government’s investigation and whether evidence used in federal pleadings was properly verified before being presented to the court. The concerns raised in the motion extend far beyond disputed photographs. The filing also highlights major unanswered questions about the Bitcoin itself, questions that go to the heart of how the government came into possession of the cryptocurrency in the first place. According to blockchain analysis cited in the filing, the Bitcoin at issue was transferred out of wallets associated with the claimant in December 2020 during what appears to have been a massive coordinated theft. More than 127,000 Bitcoin were moved within a two-hour window, an event that has since been widely reported by blockchain analysts as one of the largest cryptocurrency thefts ever recorded. The motion notes that cybersecurity researchers later discovered a vulnerability in wallet software used to generate the private keys controlling those wallets. The tool relied on a weak implementation of the Mersenne Twister pseudorandom number generator, meaning that the supposedly secure cryptographic keys may have been generated using only 32-bit entropy, making them potentially vulnerable to attack.
Who Actually Stole this Bitcoin?
After the Bitcoin was transferred out of the original wallets in December 2020, the filing states that the cryptocurrency was moved into intermediary wallets where it remained largely dormant for nearly three years, even as the value of Bitcoin rose dramatically. Then, according to blockchain records referenced in the motion, the Bitcoin was moved again in mid-2024 to a new set of wallets that the government now claims are under federal control. Despite these movements being visible on the public blockchain, the government’s complaint does not explain who carried out the original transfers, when the government first gained control of the cryptocurrency, or how federal authorities ultimately obtained it.
The filing also notes that the government previously stated in a public forfeiture notice that the cryptocurrency was “seized” on July 23, 2024, yet the complaint itself reportedly provides almost no detail about the circumstances of that seizure. Blockchain data also shows that after the 2020 transfers, the original wallet holders repeatedly attempted to recover the funds. According to the filing, more than 1,400 blockchain “OP_RETURN” messages were sent requesting that the Bitcoin be returned, costing the senders tens of thousands of dollars in transaction fees. However, none of those requests were answered.
Will Bitcoin be Deposited into the Strategic Bitcoin Reserve?
The stakes in this case are enormous. If the government prevails, the forfeiture will rank among the largest cryptocurrency seizures in history, and the Bitcoin could end up being deposited into the Strategic Bitcoin Reserve. But if the court determines that the government relied on inaccurate evidence or seized the Bitcoin without proper legal authority, the case could expose serious flaws in how federal authorities investigate and confiscate digital assets.
Were you Scammed?
The Prince Group case highlights a much larger problem with modern civil asset forfeiture: when billions of dollars in digital assets are seized, there is often no one in the system advocating for the victims whose property has been taken. Civil forfeiture allows the government to take property first and force the victims to spend years fighting to get it back. If you believe you were a victim of a cryptocurrency scam or pig butchering scheme, MDF Law PLLC represents investors and victims seeking to recover stolen digital assets. For a confidential consultation, contact MDF Law PLLC at (800) 767-8040 or visit www.mdf-law.com