The New York Times claims that something happened this week that changed Bitcoin's reputation as a "secure, decentralized and anonymous" cryptocurrency.
We all know that Bitcoin was originally used by criminals to make illegal transactions without revealing their names or locations. The digital currency quickly became very popular with drug dealers and all those who wanted to hide from the tax authorities.
"This week, federal officials were able to recover most of the ransom (in Bitcoin) paid in the recent Colonial Pipeline ransomware attack. This means that a fundamental misconception about cryptocurrencies has been dispelled:
"They are not as difficult to detect as those who use them for illegal transactions."
The fact that federal investigators tracked ransom money through at least 23 different electronic accounts owned by the DarkSide (hacking team) before gaining access to one of the accounts showed that the authorities knew.
"These are digital footprints," said Kathryn Haun, a former federal prosecutor and venture capitalist at Andreessen Horowitz.
"There is a trail and the authorities seem to be able to follow it very well."
Haun added that the speed with which the Ministry of Justice was able to obtain most of the ransom was "pioneering."
On the contrary, he stated that obtaining records from banks often requires months or years of bureaucracy, especially when these banks are abroad.
Detecting a user's transaction history is easy and is done with the public key it has, authorities said.
The confiscation of the ransom, however, requires the acquisition of the private key, which is somewhat more difficult. Of course no one knows how the federal agents managed to get DarkSide's private key.
Justice Department spokesman Marc Raimondi declined to comment further on how the FBI acquired DarkSide's private key. According to court documents, the investigators had access to the password for one of the hackers' Bitcoin wallets, but did not specify how they obtained it.
The FBI does not appear to be using any underlying vulnerabilities in blockchain technology, cryptocurrency experts say. Federal agents could have obtained DarkSide private keys by planting a spy in the DarkSide network, hacking into computers that stored their private keys and passwords, or forcing their private wallet service to deliver it through someone research warrant.
George is still wondering what he is doing here….
