A significant diplomatic clash has erupted between the United States and China over a controversial $13 billion Bitcoin seizure. China is accusing the US government of orchestrating the theft of 127,000 Bitcoin from LuBian Mining Pool in 2020, highlighting potential state-level hacking involvement. The US Department of Justice attributes the seizure to criminal activity. This accusation follows China’s formal complaint against the US, alleging they orchestrated the Bitcoin heist and accusing a state-sponsored hacker group of being responsible. The incident is impacting international relations and market stability for cryptocurrency as it raises concerns about large-scale Bitcoin holdings under government control. This dispute also poses questions regarding potential regulatory changes to improve security in cryptocurrency wallets in response to these events.