Bitcoin Drops As Over Concerns Of Cryptocurrency’s Security After US Government Seizes Most Of Colonial Pipeline Ransom

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BItcoin cryptocurrency slide down 8% late Tuesday following news that the U.S. was able to recover $2.3 million of the ransom that Colonial Pipeline paid after being hacked by a group called Darkside.  New concerns have risen about blockchain and cryptocurrency’s security after the U.S. was able to hack into private servers to obtain the “private key” to one of of the hacker’s wallet.

Other cryptocurrencies also slipped around 8%, the same as Bitcoin, according to Coin Metrics data.  Previously it was believed by many that blockchain was virtually impenetrable due to the complexity of how each problem-solving block is built upon another by users from around the world, but with the U.S. able to bypass the problem solving and just take the bitcoins, cryptocurrency owners were spooked.  “Because Bitcoin and other cryptocurrency is not based on any real world valuation nor is its value tied to anything, it is more volatile than regular currency or even fiat currency issued by a stable government.  Now when you have an entity demonstrate that it can bypass the normal blockchain cryptocurrency processes previously thought to be highly secure, that cryptocurrency is going to swing pretty significantly in value,” said Tomer Greenberg, a financial currency analyst with Israel’s central bank.

According to the FBI, they were able to hack into a server located in the U.S. which was operated by one of the hackers and obtain the hacker’s Bitcoin wallet password.  “Hacker’s like cryptocurrency because it was thought to be untraceable and secure, but with the FBI’s recent action, that could make hackers slow down on their ransomware attacks which have been growing every year,” says Jane Phillips, a former FBI agent who specialized in digital crimes.