usbitcoinreservessurge

A major legal disclosure in October 2025 revealed that the U.S. government has officially seized 127,271 Bitcoins linked to the Cambodian Prince Group, a stash valued at nearly fifteen billion dollars at current market prices. This immediately sparked speculation across the crypto community did law enforcement manage to crack a Bitcoin private key, or was the seizure the result of a deeper technical flaw hidden in plain sight?

According to industry veterans like Cobo co-founder Shenyu, the U.S. did not brute force the private keys. Instead, the case traces back to a serious randomness flaw known today as the “Milk Sad” incident. Between 2019 and 2020, thousands of Bitcoin wallets were created using a weak pseudo-random number generator called Mersenne Twister MT19937-32. This algorithm was never designed for cryptographic key generation, and its predictable structure allowed skilled actors to enumerate possible keys and drain wallets.

During that period, more than fifty three thousand Bitcoins sat across over two hundred thousand vulnerable addresses. Funds poured into these wallets not only from individual miners and smaller holders but also from large, centralized transfers. The Lubian mining pool became a major concentration point, quickly rising into the top ranks of global mining operations despite having no clear public team or background. By early 2020, Lubian-branded miner payouts alone had deposited more than fourteen thousand Bitcoins into these weak private key addresses.

On December 28, 2020, the vulnerability erupted visibly. In a single day, over one hundred thirty six thousand Bitcoins were moved out from the compromised wallets. At that time, Bitcoin traded around twenty six thousand dollars, meaning around three point seven billion dollars shifted in hours. Yet because the market was experiencing a strong rally and mining pool payouts had recently slowed, analysts could not confirm whether this was a theft or a coordinated internal withdrawal. No official alarm was raised, and the coins went silent on-chain.

Years later, everything resurfaced when the Libbitcoin Explorer team unintentionally repeated the same vulnerability. Its bx seed command also relied on the same weak random generator, and hackers began exploiting it in 2023. The vulnerability was finally traced back to the earlier Lubian era, and researchers matched the massive December 2020 outflows to the same weak key range. By then, a large portion of those coins had already been consolidated and, according to legal filings, were linked to money laundering activity tied to the Prince Group.

The U.S. Department of Justice confirmed that hardware devices linked to the group were seized and later transferred into cold storage controlled by U.S. Marshals. On-chain data shows that nearly ten thousand Bitcoins were recently moved into an official U.S. escrow address. Rather than deciphering keys through raw computing power, law enforcement likely gained access by seizing mnemonic phrases, backup files, or exported key material from compromised servers and wallets. The real vulnerability was not mathematics, but poor randomness and careless security practices.

What began as a technical oversight in random number generation eventually became a massive black hole of lost funds. Wallets appeared secure on the surface but were mathematically guessable due to limited entropy. Many victims continued depositing funds without knowing that their keys sat in a narrow, predictable range.

The event reinforces a simple truth in the most brutal way: control of a wallet only matters if its cryptographic randomness is truly secure. The phrase “Not your keys, not your crypto” is only valid when those keys are generated correctly. Without reliable entropy, ownership becomes an illusion and billions can disappear before anyone even knows a vulnerability exists.
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