Bitcoin (BTC) Price Drops as US Seizes Most Colonial Ransom

Bitcoin (BTC) Price Drops as US Seizes Most Colonial Ransom

The price of Bitcoin slipped again on Tuesday amid a sharp sell-off among digital currencies.

The reason for the move was unclear, but it may be related to concerns over cryptocurrency security after US officials managed to recoup most of the ransom paid to hackers who targeted Colonial Pipeline.

Court documents say investigators were able to access the password to one of the hackers’ bitcoin wallets. The money was recovered by a recently launched working group in Washington created as part of the government’s response to an increase in cyberattacks.

Bitcoin accelerated its slide to fall below the $32,000 level on Tuesday morning. The world’s largest cryptocurrency then rallied slightly, trading down 9% at $32,854.99 as of 4:01 p.m. ET.

Smaller digital coins also fell, with Ether dropping around 8% to $2,499.28 and XRP more than 7%.

Learn more about cryptocurrencies from CNBC Pro

In April, 2021 was shaping up to be a banner year for digital assets, with bitcoin surging above $60,000 for the very first time. But a recent fall in crypto prices has shaken confidence in the market. Bitcoin dropped to nearly $30,000 last month and is currently down around 50% from its all-time high.

The digital currency is only up about 12% year-to-date, even though its price has more than tripled from a year ago.

The United States recovers most of the colonial ransom

Decrypt crypto media Decrypt reported there were unfounded rumors that the attackers’ bitcoin wallet had been “hacked”, an unlikely scenario.

DarkSide, which reportedly received $90 million in bitcoin ransom payments before shutting down, operated a so-called “ransomware-as-a-service” business model, in which hackers develop and market ransomware tools and sell them to affiliates who then carry out attacks.

According to blockchain analytics company Ellipticalthe funds seized represented the bulk of the DarkSide subsidiary’s share of the ransom paid by Colonial.

John Hultquist, vice president of analytics at Mandiant Threat Intelligence, called the move a “welcome development.”

“It has become clear that we need to use multiple tools to stem the tide of this serious problem, and even law enforcement needs to broaden their approach beyond building cases against criminals who may be beyond the reach of the law,” Hultquist said.

“In addition to the immediate benefits of this approach, a greater focus on disturbances can discourage this behavior, which develops in a vicious circle,” he added.

Crypto crackdown