The classic ransom is a suitcase full of unmarked US dollar bills. Bitcoin’s role in the Colonial Pipeline hack shows that the global crime currency has a rival. This is kind of a sign of Bitcoin’s success, but it also provides an opportunity for regulators to step up their interventions.
Colonial’s location highlights the ease of use of Bitcoin. A week ago, the fuel transport company paid a nearly $ 5 million ransom in digital currency to regain access to its computer systems, Bloomberg reported Thursday. In 2017, one of the biggest ransomware attacks called WannaCry claimed payment of Bitcoin from more than 200,000 victims. A year later, more than half of those violations resulted in Bitcoin, according to cybersecurity firm PurpleSec.
It reflects the rapid adoption of the 12 year old cryptocurrency. The market value of all Bitcoin in circulation of nearly $ 19 million topped $ 1 trillion for the first time in February. It’s currently around $ 50,360, according to Coinbase digital currency exchange.
It has also become more common in everyday transactions. Last year, National Football League player Russell Okung became the first in the sport to pay at least part of his salary with Bitcoin. More and more home sellers are accepting cryptocurrency, especially in countries with weak fiat currencies like Argentina.
However, anonymity is a legitimate concern of the supervisory authorities. The asset itself is unregulated, so no personal information is required to transfer or convert cryptocurrencies, although guard dogs are increasingly scrutinizing the digital exchanges and payment services associated with it. Banks that enable US dollar transactions must adhere to so-called Know Your Customer rules, according to which certain data about the parties involved must be recorded.
Since cryptocurrencies are not tied to such measures, they are used in nefarious programs, to finance terrorism and other illegal activities. This has led to an increase in federal investigations. For example, according to Bloomberg, the Binance crypto exchange is being investigated for possible money laundering by the U.S. Department of Justice and the Internal Revenue Service.
The new US stock exchange regulator Gary Gensler has also signaled further regulations for crypto activities. The demand for ransom demands shows that Bitcoin has gone from the edge of the conventional, but also gives Gensler and other watchdogs a reason to pick up the pace.
The Colonial Pipeline paid hackers nearly $ 5 million worth of bitcoins on May 7 to restore disabled computer networks, Bloomberg reported on May 13. After receiving payment, the hackers provided a decryption tool to allow access to their systems. The cyberattack resulted in Colonial, one of America’s largest fuel carriers, closing down pipelines, causing some residents in the southeastern part of the United States to line up over concerns about gas station bottlenecks.
The FBI has attributed the violation to DarkSide, a group specializing in ransomware, believed to operate out of Russia or Eastern Europe.