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Crypto tumbles after US tracks Bitcoin ransom paid to hackers

Bruce Whitfield asks VALR.com’s Farzam Ehsani exactly how the FBI followed the ransom paid by Colonial Pipeline.

© Daniil Peshkov / 123rf.com

Colonial Pipeline paid a $ 4.4 million (more than R59m) ransom on May 7 to cybercriminals who shut it down.

The pipeline operator said it carried 45% of the East Coast’s supply of diesel, gasoline and jet fuel at the time.

The hackers had encrypted the Colonial files and demanded that the ransom be paid in bitcoins.

They were identified as a Russian-based group called DarkSide.

CONNECTED: Cybercrime is no longer a virtual reality

The US Department of Justice announced that investigators have managed to extract more than $ 2 million in cryptocurrency payments made by Colonial Pipeline.

Bruce Whitfield finds out what makes this kind of tracking possible from Farzam Ehsani, co-founder and CEO of VALR.com.

The advantage of bitcoin is that every transaction ever made is actually visible in the public blockchain bitcoin, says Ehsani.

Obviously, transactions take place between addresses. You can think of these addresses as a string of letters and numbers, so you don’t have to know who’s behind a particular address … but there’s a record for each transaction.

Farzam Ehsani, co-founder and CEO – VALR.com.

When regulators see that bitcoin has been used to spread illegal activity, they very often turn to the public blockchain … as much as we can with you … and try to track the flows of these coins.

Farzam Ehsani, co-founder and CEO – VALR.com.

There are more and more sophisticated tools that help law enforcement, as well as exchangers like us, to make sure we can understand if someone leaves a little trace somewhere that you can actually pick up which address belongs to which country if it stays. enough information.

Farzam Ehsani, co-founder and CEO – VALR.com.

Some of the other cryptocurrencies are more difficult to track at this stage.

Ehsani also emphasizes the language used to describe the ransom bitcoins being “seized.”

They say they have a “private key” to the bitcoins in question.

Farzam Ehsani, co-founder and CEO – VALR.com.

Think of it as a mailbox number so that everyone can see it … but the “private key” is the actual key of the person who owns the mailbox … to access what is inside the mailbox.

Farzam Ehsani, co-founder and CEO – VALR.com.

The FBI said it owned the private key and therefore re-cloned the bitcoin that was paid for the ransom.

Farzam Ehsani, co-founder and CEO – VALR.com.

Hear Ehsani’s explanation for The Money Show:

This article first appeared on CapeTalk: Crypto collapses after the United States tracks a Bitcoin ransom paid to hackers

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