Authorities from the US successfully recover a ransom in Bitcoin by Colonial Pipeline. Last May, a cyberattack allegedly by a Russia-backed hacker group ‘DarkSide’ stopped the operations of the company. Ransomware seems to be circulating in the system now.
Colonial Pipeline controls nearly 45% of the fuel for the U.S. East Coast. Its CEO, Joseph Blount, gave the ransom demanded by the hacker on a control room’s main computer. It is approximately $4.4 million in 63.7 Bitcoin.
US Federal Government’s Operation against Ransomware
The operation was by a ransomware task force by the US federal Government. This type of attack is now on a regular basis. And now, there is a growing concern in the public and the authorities.
“By going after an entire ecosystem that fuels ransomware and digital currency, we will continue to use all of our tools and all of our resources to increase the costs and the consequences of ransomware attacks and other cyber-enabled attacks.”
Deputy Attorney General Lisa Monaco
The Deputy National Security Advisor, Anne Neuberger, has claimed that Bitcoin and cryptocurrencies “enable” this kind of crime. The other US high ranking government officials, like Janet Yellen, the Secretary of Treasury are also on the same position.
“That’s the way folks get the money out of it. On the rise of anonymity and enhancing cryptocurrencies, the rise of mixer services that essentially launder funds.”
Deputy National Security Advisor, Anne Neuberger
A representative from the Department of Justice claims that the funds were from a Bitcoin wallet.
Crypto Community’s Opinion
The members of the crypto community and specialized media are unconvinced. Jordan Schachtel, an independent journalist, questioned the whole operation. He says that “russian Hacking” has been used “illegitimately” for many times before. Schachtel hints at the probability of the Federal Authorities withholding important key information.
He also pointed out some inconsistencies in the investigation. For instance, the authorities claimed to acquire the hacker’s Bitcoin wallet password. He stated:
“Why do you need a court order if you have the password to their wallet? The reverse is also true. If the bitcoin was transferred to a custodial wallet, you dont need the password (keys).”
Schachtel is wondering how the authorities acquired the private keys. The report only states that the ransom has been transferred to a “particular address, for which the FBI has the private key.” The available information seems to rule out the possibility of the Feds getting a BTC wallet private keys. The hackers could have utilized a centralized exchange as the custodian of the ransom.
“So it looks like I was right. The FBI did not obtain the private keys. Instead, they took legal action against an exchange or some kind of custodial wallet that has servers in N California (Coinbase, lol?). These “hackers” were grossly incompetent.”
Other Speculations
A partner at Anderson Kill Law, Preston Byrne, summarized the entire operation. Schachtel and Byrne both concluded that the US did not do anything inventive.
As of now, BTC trades at $34,127. In the daily chart, the largest cryptocurrency by market cap has been journeying downwards after the sideways movement in the last few weeks.
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