Harry Robertson, 08 June 2021
Bitcoin’s fans have long argued that its decentralized design makes it a currency free from government control and manipulation. But on Monday, the US Justice Department said it had reached into a bitcoin “wallet” and swiped back $2.3 million that Colonial Pipeline had paid to hackers after a ransomware attack in May.
Analysts said the dramatic move raised questions about just how free from state oversight bitcoin really is.
“The rapid move by US agents in tracing and tracking the ransom paid, then retrieving it after gaining access to a private key to unlock the bitcoin wallet, is a blow to crypto fans who have lauded its untraceable nature,” said Susannah Streeter, senior investment analyst at broker Hargreaves Lansdown.
“One of bitcoin’s most lauded qualities – its decentralized nature, away from the scope of government interference – is now under question.”
The Justice Department said the FBI had tracked down the ransom payment that Colonial Pipeline made to the hacker group DarkSide in May. It said the FBI knew the key for the wallet and swooped in after a judge gave it the go-ahead. Yet it did not say how the FBI came to know the key, which is effectively a password to the storage facility.