According to cryptocurrency experts, the hacking of the Colonial Pipeline isn’t the end of Bitcoin.
The Colonial Pipeline, a thousands-mile-long oil transfer pipe that delivers petroleum across the country, was the target of a cyberattack last month.
The pipe’s operators were said to have paid a ransom to the hacking organization DarkSide to terminate the attack, but not before significant swaths of the East Coast were left without fuel.
The ransom was paid in bitcoin and was said to be worth roughly $5 million.
On June 7, Deputy Attorney General Lisa Monaco stated that detectives had recovered 64.7 bitcoins from the hackers, worth roughly $2.3 million at the time, by getting access to a bitcoin wallet containing them.
According to Reuters, the FBI accessed the wallet after obtaining its private key, according to an affidavit filed on Monday. It’s unclear how this occurred.
The price of bitcoin dropped the next day, falling by roughly 7% as of 7:30 a.m. ET Tuesday morning, according to CNBC, which cited potential concerns about the cryptocurrency’s security.
Experts spoke with Washington Newsday about what the ordeal means for bitcoin and whether confidence in its security has been shattered. There are also various viewpoints on how the FBI handled the investigation.
Nicolas Christin is a computer science associate professor at Carnegie Mellon University in Pittsburgh, Pennsylvania. He does not believe that the occurrence will have an impact on people’s trust in the digital currency.
He explained, “It just reinforces the fact that bitcoins are traceable, which has never been in doubt.” “Other, less traceable cryptocurrencies exist, but they don’t appear to have been employed here.
“The fundamental technology has nothing to do with this. Imagine you have the most impenetrable and secure safe in the entire world. If somebody manages to steal the key, they will still have access to the safe’s contents.”
Christin explained the FBI could have gained access to the wallet if the hackers had sent their bitcoins to an intermediary service, such as an online exchange.
He added: “That intermediary could have been subpoenaed/coerced by the authorities to surrender the money that had been deposited there.”
Glen Goodman, author of The Crypto Trader, agreed that this could have been a potential method the FBI used—but voiced doubt that it happened.
He told Washington Newsday: “It’s possible. This is a brief summary.