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Coinbase

Coinbase says it was not involved in the DOJ’s Bitcoin ransom seizure

Coinbase CSO says ‘good ol’ fashioned police work’ landed the FBI the private keys.

Coinbase’s Chief Security Officer has refuted suggestions the U.S. crypto exchange was involved in any seizure of crypto assets related to recent Colonial Pipeline ransomware attack.

CSO Philip Martin took to Twitter on June 8 to explain the firm’s involvement, or lack of it, with the Department of Justice warrant for the seizure of Bitcoin.

“Coinbase was not the target of the warrant and did not receive the ransom or any part of the ransom at any point. We also have no evidence that the funds went through a Coinbase account/wallet.”

The official seizure story, in which government officials recovered 63.7 BTC, worth roughly $2.3 million at the time, had a number of irregularities. Federal investigators claimed to have obtained the Darkside group’s private keys but did not disclose how the FBI was able to commandeer them.

According to the affidavit, the private key for the subject address was in the possession of the FBI in the Northern District of California. This led to the connection with Coinbase which has servers in the area as a number of Twitter users pointed out. Martin refuted these claims stating:

“I’ve also read that because the seizure warrant specified property in the Northern District of California, it had to be targeted at Coinbase. Nope. What this likely means is that the private key is located at one of the many Northern California FBI field offices.”

He added that due to the exchange’s storage mechanisms which use a pooled hot wallet, it “wouldn’t make a ton of sense” to hand over a specific private key.

Questioning how the investigators acquired the private key he guessed that it was “some good ol’ fashioned police work to locate the target servers,” followed by a mutual legal assistance treaty (MLAT) request and/or some political pressure to get access.

Concerns arose over the abilities of authorities to access the cryptographic keys which played a role in yesterday’s market drop. However authorities have a variety of innovative ways to access private information. On the same day, reports surfaced detailing a fake encrypted communications app used by criminals that was secretly operated by the FBI in order to surreptitiously collect messages, private information, and monitor criminal activity on a massive scale.

In a newsletter on June 8, the founder of Quantum Economics and a former Senior Market Analyst at eToro Mati Greenspan, stated that the recovered ransom was actually bullish for Bitcoin as many had expected U.S. politicians to use crypto as a scapegoat for the attack and to enforce some heavy-handed regulations.

“Instead, they were clued in to what we already knew, that it is easier for authorities to catch criminals who use crypto than anything else.”

Greenspan added that the “only valid explanation for prices to be falling is that markets are random, especially in the short-term.” At the time of writing, BTC was trading down 2.2% over the past 24 hours at $33,000 after slumping over 10% since the beginning of the week.

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$2.3 million

Bitcoin Keys Cannot be Hacked: Skeptics Question the Official Colonial Pipeline Bitcoin Seizure Story

On June 7, the United States Justice Department and the Federal Bureau of Investigation (FBI) announced the “recovery” of 63.70 bitcoin from the funds Colonial Pipeline sent to the hackers. The official story has a number of inconsistencies and federal investigators did not disclose how the FBI was able to confiscate the Darkside gang’s private […]

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$2.3 million

FBI Agent Recovers Private Key to $2.3M in Bitcoin Paid to Colonial Pipeline Hackers

U.S. law enforcement officials from the Justice Department on Monday announced the seizure of $2.3 million dollars worth of crypto assets that were paid to the Colonial Pipeline hackers. Deputy Attorney General Lisa Monaco explained during a news conference that federal agents “recaptured the majority of the ransom Colonial paid to the Darkside network.” FBI […]

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$2.3 million

FBI Agent Recovers Private Key to $2.3M in Bitcoin Paid to Colonial Pipeline Hackers

U.S. law enforcement officials from the Justice Department on Monday announced the seizure of $2.3 million dollars worth of crypto assets that were paid to the Colonial Pipeline hackers. Deputy Attorney General Lisa Monaco explained during a news conference that federal agents “recaptured the majority of the ransom Colonial paid to the Darkside network.” FBI […]

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$6 Trillion

Whistleblower Edward Snowden Says $6 Trillion in Stimulus Is ‘Good for Bitcoin’

The infamous whistleblower and privacy activist Edward Snowden commented on bitcoin on Friday, after the Biden administration said this week it was shooting for 6 trillion dollars in stimulus proposals. Following the $6 trillion in stimulus headlines, Snowden commented on the situation and said it was “good for bitcoin.” Edward Snowden Jabs Biden’s 6 Trillion-Dollar […]

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Ben Davenport

Bitgo Chosen to Manage Seized Cryptocurrencies for the US Marshals Service

The U.S. Marshals Service has published a contract showing the crypto custodian Bitgo has been chosen to manage law enforcement’s seized bitcoin acquired through criminal forfeiture. The contracted deal is $4.5 million for the storage, maintenance, and disposal of cryptocurrencies according to documents released on Wednesday. USMS Pens a Deal With Bitgo During the last […]

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bitcoin

Darknet Market Joker’s Stash Retires After Raking in $1 Billion in Cryptocurrencies

One of the largest darknet marketplaces for selling identity data and stolen credit card information, Joker’s Stash retired last month after making off with a cool $1 billion in cryptocurrencies. Weeks ago, U.S. and European officials seized some of the web portal’s servers tied to Joker’s Stash site, but were unable to completely shut operations […]

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