Bitcoin drops 8% on fears US Law Enforcement will hack into the network

Following news that the Department of Justice had revoked Bitcoin during the Colonial Pipeline ransomware investigation, Bitcoin dropped 8%.

Bitcoin price has dropped 8% in the past 24 hours amid news of US law enforcement recovering part of the funds hacked in the Colonial Pipeline hack. These funds are denominated in Bitcoin.

Colonial Pipeline is a fuel pipeline system based in the United States, serving the Southeastern United States. On May 7, the company fell victim to a ransomware attack that affected their payment system. Colonial subsequently froze operations to limit further damage, leading to fuel shortages throughout the region, Bloomberg reported.

Immediately after the attack, the company paid a 75 Bitcoin ransom, about $4.4 million at the time.

Yesterday, the Department of Justice (DoJ) announced that it had recovered $2.3 million of the said amount after “monitoring the amount,” said Lisa Monaco, Deputy Attorney General.

While it was initially reported that the attackers’ Bitcoin wallets were “hacked”, this may not be the case.

Instead, an affidavit from the Federal Bureau of Investigation (FBI) suggests that authorities were able to track the ransomed Bitcoins using a block explorer to a specific address. can hold 63.7 Bitcoins.

They then took control of the private key associated with this address, thus accessing the ransomed Bitcoin.

Users need both private keys and public keys for Bitcoin addresses to access funds. Both keys are a string of words and numbers. Matching the correct private keys with the corresponding public keys allows the user to control that Bitcoin.

Without these keys, it is nearly impossible to access the funds due to the level of encryption used.

It is likely that authorities could match the address in question to a specific identity or address associated with a US-based cryptocurrency service, such as an exchange or other supervisor.

However, an assistant special agent involved in the case, Elvis Chen, said he didn’t “want to give up our profession in case we wanted to use it again.” [phương pháp] this for future efforts.”

However, it appears that the market is trading as if the Bitcoin network has indeed been hacked, with the price of the leading cryptocurrency falling. At press time, Bitcoin is trading at around $33,200.

The rest of the market has also fallen significantly since the news broke. In the last 24 hours, Ethereum is down 10.3%, Dogecoin is down 13.3%, and Solana, a year-end standout cryptocurrency , dropped a whopping 18.7%.

However, Blockstream CEO Adam Back stated that the Bitcoin network was not hacked by the FBI as reported. He tweeted:

#Bitcoin was NOT hacked
No bitcoin wallet was hacked, nor is even known to be possible. Ransom hackers used a rented cloud server. The FBI got a subpoena and took control of it and recovered coins. That’s it.

— Adam Back (@adam3us) June 8, 2021

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