Arkham Exposes $3.5B Lubian Heist as Largest Bitcoin Hack
Blockchain intelligence firm Arkham has exposed the world’s largest Bitcoin hack at Chinese mining pool Lubian. On December 28, 2020, attackers exploited weak 32-bit entropy in Lubian’s Trust Wallet code to siphon 127,426 BTC—$3.5 billion at the time, now worth about $14.5 billion. They drained 90% of the pool’s reserves before Lubian transferred the remaining 11,886 BTC into recovery wallets. A further $6 million in BTC and USDT was stolen the following day. Lubian never disclosed the breach and quietly shut down in early 2021 amid regulatory crackdown rumors. Instead, it attempted to recover funds through over 1,500 small transactions. Arkham’s on-chain analysis reveals that private key generation failures, not regulation, caused the crypto hack. The stolen coins lay dormant until their consolidation into a single address in 2024, making the hacker the 13th-largest holder of BTC. This Bitcoin hack underscores critical vulnerabilities in wallet security and the urgent need for improved transparency and operational controls in centralized crypto platforms.
Bearish
The disclosure of the world’s largest Bitcoin hack is likely to weigh on market sentiment. In the short term, traders may react with caution, fearing similar vulnerabilities in other centralized platforms, leading to selling pressure on BTC. Historically, major hacks have triggered temporary price declines as trust in security wanes. Over the long term, the market may absorb the news as firms strengthen wallet security and transparency measures. However, lingering doubts about centralized custody could continue to limit bullish momentum, keeping overall market outlook bearish.