FBI Seizes 84% of Colonial Pipeline Bitcoin Ransom

A month after hackers shut down the Colonial Pipeline for a ransom of $4 million in bitcoin, the FBI got the majority of the money back.

Bitcoin, the digital currency idolized as free and far from the reaches of the government, was confiscated (some theorized “hacked”) this past week. The FBI took back $2.3M: half of the pipeline ransom. The Bureau followed the 75 bitcoins via the blockchain and, according to an affidavit uploaded by ABC News, seized the private key to the bitcoin account and took 63.7 bitcoin. Though the FBI secured 84.9% of the ransom in BTC, the crypto’s price is down to nearly half last month’s value.

Now, bitcoin enthusiasts like the editors at Decrypt will swear that there is no way the FBI could hack a private account that without the private key and account number, both long strings of numbers, the encryption makes it impossible to get in. But law enforcement could confiscate Bitcoin through other methods.

The blockchain is a ledger going back to the first block mined with all transactions perfectly traceable. With enough computer power, an agency can retrace steps hackers take and force the address owner to comply.

April Falcon Doss, executive director of the Institute for Technology Law and Policy at Georgetown Law, told NPR that while unlikely, there is even a theoretical possibility that the FBI outright hacked the private key.

But “The idea that the FBI would have, through some brute-force decryption activity, figured out the private key seems to be the least likely scenario,” She said. Still, a currency that is supposed to be “the future of finance” dropped more than 8% after the news that digital terrorists couldn’t rely on bitcoin for illegal activity.

Kevin Travers was a Reporter at deBanked.