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Cryptocurrency prices plunged across the board after the FBI said it seized most of the millions of dollars in Bitcoin sent to an affiliate of the “DarkSide” hacker group behind a major pipeline hack American last month.
The FBI said it seized 63.7 BTC – worth around AU $ 2.8 million – which was paid by Colonial Pipeline to the group to regain control of its systems after the ransomware attack, which led to huge queues for gasoline in the eastern United States in the wake of the panic. purchase.
Justice Department seizes $ 2.3 million in cryptocurrency paid to ransomware extortionists: @TheJusticeDept today announced that it has seized 63.7 bitcoins believed to be proceeds of a May 8 ransom payment to cyberactors by DarkSide. https://t.co/qnCAN8oibW pic.twitter.com/brNopjSN3E
FBI (@FBI) June 7, 2021
The FBI made the announcement around 6 a.m. AEST, and crypto prices fell across the board about 45 minutes later.
Bitcoin fell from around US $ 35,500 to less than US $ 34,000, while Ethereum fell from over US $ 2,700 to less than US $ 2,600.
By lunchtime, BTC traded at US $ 33,789, down 8.1% from 24 hours ago, while ETH changed hands for US $ 2,594, down 6.9%.
Every crypto top 100 other than Theta Fuel (# 41) – which was up 9.0% – and Tether stablecoin was in the red at 12:28 p.m. AEST.
Coin360
The fact that the FBI can seize payment for ransomware in a way undermines a central argument in favor of cryptocurrencies, namely that they are free from government censorship.
The FBI said it had the “private key” – the approximate equivalent of a password – for the wallet containing the 63.7 Bitcoins, but did not say how it got it.
We’re probably not going to know how the FBI obtained the private key to DarkSide’s bitcoin wallet for some time. If ever.
Likewise, it would be great to understand more details about the cryptocurrency address seized by law enforcement “located in the Northern District of California”
Chris Bing (@Bing_Chris) June 7, 2021
There has been speculation that hackers could have used a “non-custodial” wallet where the private key is stored on a private company’s server, making it vulnerable to an FBI warrant.
If it did, it would be a security hole for a group engaged in illegal activity, but hackers are not considered particularly sophisticated.
Most security-conscious Bitcoiners use a hardware wallet – a small device the size of a USB drive – to store their private keys.
Q: “How did the FBI seize bitcoin from ransomware attackers?” “
A: Assuming they weren’t stupid enough to use an exchange, my bet is a hot wallet hosted on a server in the US, streaming txns through clearnet. Network monitoring is one thing…. find original IP => input.
Jameson Lopp (@lopp) June 7, 2021
Clarification via @KenDilanianNBC: Although Bitcoin is not stored on a server, the private keys to unlock Bitcoin may have been. Either way, an FBI official just told reporters that no matter where the Bitcoin wallet is, the FBI can still access it. They won’t say how.
Geoff Bennett (@GeoffRBennett) June 7, 2021
Colonial Pipeline paid 75 BTC in the ransomware attack. Apparently 15% of the BTC went to the DarkSide hackers and the rest to the affiliate group. DarkSide, a Russian-speaking group, operates a “ransomware as a service” operation and apparently takes a 15% cut.
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