Cybercrime: US tracks down, seizes Bitcoin ransom Colonial Pipeline paid hackers

*Detectives state the cryptocurrency is not as untraceable as cybercriminals think after all

*Ransom payments are the fuel that propels the digital extortion engine…. The United States will use all available tools to make these attacks more costly and less profitable for criminal enterprises, says Deputy Attorney-General Lisa Monaco

Gbenga Kayode | ConsumerConnect

The United States Department of Justice (DOJ) has disclosed that it was able to track down the digital wallet containing 63.7 Bitcoins and seize the assets in the process.

At the time the Colonial Pipeline, which systems the hackers attacked paid the ransom, the Bitcoins were worth $4.4 million, agency report said.

Bitcoin digital concept   Photo: Getty Images

ConsumerConnect had reported that a hacker group shut down the iconic Colonial Pipeline with a ransomware attack May 2021.

The disruption to operations at the gasoline facility had caused a spike in East Coast fuel prices, and resulted in the company’s paying a ransom in Bitcoin to regain control of its network thereafter.

According to Colonial Pipeline, the company said it paid the ransom because it was unsure of the extent to which its network had been compromised in the cyberattack.

Whereas as it company was deciding to pay the ransom, it simultaneously, was working closely with the US Federal Bureau of Investigation (FBI) and the DOJ’s new digital investigations unit so as to help track the payment to a Russian hacker group known as Darkside.

Deputy Attorney-General Lisa Monaco said: “Following the money remains one of the most basic, yet powerful tools we have.

“Ransom payments are the fuel that propels the digital extortion engine, and today’s announcement demonstrates that the United States will use all available tools to make these attacks more costly and less profitable for criminal enterprises.”

A fresh perspective on confiscating digital assets

Hitherto, it was reportedly believed in the digital ecosystem, that payments made to criminals and scammers using Bitcoin were untraceable and not retrievable, an assumption said to be a major reason that the digital currency is favoured by criminal enterprises around the world.

Nonetheless, in the aftermath of the cyberattack on the Colonial Pipeline May this year, it was gathered the US investigators reviewed the Bitcoin public ledger and were able to track multiple transfers and identify that approximately 63.7 Bitcoins, representing the proceeds of Colonial’s ransom payment, had been transferred to a specific address.

Report said the FBI has the “private key,” or the rough equivalent of a password needed to access assets accessible from the specific Bitcoin address.

US also stated the digital assets the agency discovered were involved in money laundering, and could there be seized under criminal and civil forfeiture statutes.

Meanwhile, the Colonial Pipeline has been commended on its “big help” to track and seize the criminals’ digital assets

Monaco further said the fact that Executives at Colonial contacted the FBI immediately actually aided the search for the slush funds.

The Attorney-General stated: “Today’s announcements also demonstrate the value of early notification to law enforcement; we thank Colonial Pipeline for quickly notifying the FBI when they learned that they were targeted by DarkSide.”

As news of the government’s seizure was announced, the value of Bitcoin plunged eight percent, according to CNBC.

The move may be related to the discovery that the digital currency may not be as anonymous and untraceable as several people had thought, report noted.