A truly despicable criminal empire has come under the crosshairs of the Department of Justice.
And now, the U.S. government is 127,271 Bitcoin richer, worth roughly 14 billion dollars.
For years, a modern-day slavery operation ran in the shadows of Southeast Asia, disguised as a crypto investment opportunity.
At the center stands Chen Zhi, born in China in 1987, the chairman of the Prince Group and, according to U.S. prosecutors, the mastermind behind one of the largest forced-labor scam networks on Earth.
His syndicate perfected the art of “pig butchering,” elaborate online frauds that lure victims through fake relationships and false promises of lucrative crypto gains, only to strip them of everything.
The horror did not end with the victims in the US and UK.
The people running those scams were victims too.
Recruited under the guise of legitimate work, they were trafficked into heavily guarded compounds across Cambodia.
These were walled prisons lined with barbed wire and armed guards.
Inside, hundreds were forced to scam others under threat of violence.
Those who disobeyed were beaten, electrocuted, and tortured in rooms designed specifically for that purpose.
These were modern-day slaves, forced to flirt online to steal from lonely, unsuspecting people across the world.
The man behind it all, 38-year-old Chen Zhi, used his stolen wealth to build a financial empire.
He owned casinos, property developments, and even a commercial bank, using that influence to gain favor with Cambodia’s political elite.
Over 18 months, U.S. and U.K. investigators followed the digital footprint, tracing billions in stolen crypto as it moved through exchanges, mixers, and wallets.
The trail led directly to Chen’s empire and to 127,271 Bitcoin, sitting quietly in cold wallets under his control.
Those wallets now belong to the United States government, in what is officially the largest crypto forfeiture in Department of Justice history.
More Bitcoin seized in one case than any nation, except for the US and China, even holds.
This haul brings the US government’s total Bitcoin holdings to roughly 325,000 BTC, worth more than 37 billion dollars, increasing the country’s stack by 64 percent.
With geopolitical tensions mounting and the world searching for a neutral reserve asset, gold has added over 10 trillion dollars in market cap in just a year as central banks race to diversify.
So here is the question.
By pouring resources into law enforcement efforts that just further extended the United States lead in sovereign Bitcoin reserves, is the United States quietly signaling that its financial future is intertwined with Bitcoin?
Friday marked the largest liquidation event in crypto history.
Over $19 billion in positions were wiped out across centralized exchanges.
More than 1.6 million traders were liquidated with their accounts zeroed out in an instant.
In just one hour, Bitcoin fell 13% from peak to trough.
Altcoins, of course, suffered far worse.
ATOM, a vaporware token with a $2 billion market cap before the flash crash, briefly traded to zero before rebounding.
Prices have recovered from those extreme lows, but this was historic, nearly double the size of the second-largest liquidation event, 2021’s China mining ban sell-off.
The headlines point to Trump’s 100% tariff threats against China late Friday as the catalyst.
But in markets, headlines are usually used to assign blame after the fact.
In reality, the amount of leverage built up in the system made a rapid collapse like this inevitable.
On the day of the crash, Bitcoin futures open interest hit $100 billion.
You see, ever since the memecoin craze fizzled out in the spring, traders have been searching for their next hit.
With no “alt season” to chase, they turned to perpetual futures with massive leverage.
Perps are zero-sum games: the losers pay the winners.
When the losers run out of margin, the exchanges liquidate them to protect themselves.
Under normal conditions, those liquidations are absorbed naturally by market liquidity.
But when fear spikes rapidly, liquidity providers step back.
That’s when things unravel and that’s exactly what happened Friday.
Liquidity vanished and the exchanges’ Auto De-leverage kicked in.
Even profitable traders were forced out of winning positions because the platforms couldn’t pay them.
In total, open interest dropped $65 billion in a single day.
However, there’s some evidence that suggests this may be a coordinated attack.
One whale opened nine figures’ worth of shorts just minutes before the cascade began.
Public data shows his final short was placed at 4:49 PM, one minute before Trump’s tariff tweet at 4:50.
He then closed 90% of his Bitcoin short and all of his ETH short, locking in $190 to $200 million in profit in under 24 hours on Hyperliquid.
That kind of timing raises serious questions about insider information.
For leveraged traders and long-only funds, Friday was a wipeout.
But for long-term Bitcoin holders, it was just another Friday.
On-chain data shows over 60% of Bitcoin hasn’t moved in more than a year.
Treasury and ETF institutional wallets, holding over 2 million BTC, didn’t react at all as those markets were closed.
While $11 billion in Bitcoin open interest was cleared, history shows every major leverage flush like this, such as in 2020, 2021, and 2023, has reset the market and paved the way for stronger rallies.
In many ways, this weekend was a bull run reset.
A harsh reminder that those playing with leverage are just renting coins, while Bitcoiners own private keys.
Because in the long run, nothing beats Bitcoin in cold storage.
