Bitcoin (BTC) Price Slides As US Seizes Most Of Colonial Bailout

A banner with the bitcoin logo is seen during the Bitcoin 2021 Convention cryptocurrency conference at the Mana Convention Center in Miami, Florida on June 4, 2021.

Marco Bello | AFP | fake images

The price of Bitcoin fell again on Tuesday. The world’s largest cryptocurrency continued to fall throughout the day amid a brutal sell-off among digital currencies.

The reason for the move was unclear, however it may be related to concerns about cryptocurrency security after US officials managed to recover most of the ransom paid to the hackers who attacked Colonial Pipeline.

Court documents said investigators were able to access the password to one of the hackers’ bitcoin wallets. The money was recovered by a recently launched task force in Washington created as part of the government’s response to the rise in cyberattacks.

Bitcoin accelerated its decline on Tuesday morning, dropping nearly 11% at 11 a.m. ET to a price of $ 31,629, according to data from Coin Metrics. Smaller digital currencies also tumbled, with Ether dropping nearly 13% to $ 2,368 and XRP dropping more than 12%.

In April, 2021 was looking to be a banner year for digital assets, with bitcoin having passed $ 60,000 for the first time. But a recent drop in cryptocurrency prices has shaken confidence in the market. Bitcoin sank to nearly $ 30,000 last month and is currently down nearly 50% from its all-time high.

The digital currency is now up just 9% since the beginning of the year, although its price is still more than triple what it was a year ago.

The United States Recovers Most of the Colonial Bailout

On Monday, US law enforcement officials said they had seized $ 2.3 million in bitcoins paid to DarkSide, the cybercriminal gang behind a crippling cyberattack on Colonial Pipeline.

According to a court document, the Federal Bureau of Investigation was able to access the “private key” or password of one of the hackers’ bitcoin wallets. Bitcoin has often been the currency of choice for hackers demanding ransom payments to decrypt data locked by malware known as “ransomware.”

Crypto news outlet Decrypt reported that there were unfounded rumors that the attackers’ bitcoin wallet had been ‘hacked’ – an unlikely scenario.

DarkSide, which reportedly received $ 90 million in bitcoin ransom payments before closing, operated a business model called “ransomware as a service,” where hackers develop and market ransomware tools and sell them to affiliates who then carry them out. attacks.

According to blockchain analytics firm Elliptic, the seized funds accounted for the majority of the DarkSide affiliate’s stake in the ransom paid by Colonial.

John Hultquist, vice president of analytics at Mandiant Threat Intelligence, called the move a “welcome development.”

“It has become clear that we need to use various tools to stem the tide of this serious problem, and even law enforcement agencies must broaden their focus beyond building cases against criminals who may be beyond the reach of the law,” Hultquist said.

“In addition to the immediate benefits of this approach, a greater focus on disruption can discourage this behavior, which is growing in a vicious cycle,” he added.

Cryptocurrency crackdown

A number of issues are plaguing cryptocurrencies, including fears of a regulatory crackdown and recent tweets from Tesla CEO Elon Musk.

Chinese authorities last month called for cracking down on cryptocurrency mining and trading. Once a major player in the market, China has since moved to end speculative investment in cryptocurrencies, banning a fundraising method known as initial coin offerings and shutting down local exchanges.

Meanwhile, Elon Musk has gone from being a bitcoin supporter to seemingly falling in love with it in a matter of months. Musk’s electric car company stopped accepting bitcoin as a payment method last month due to concerns about its environmental impact, resulting in a cryptocurrency market sell-off.

“Bitcoin bulls have been punished by the market pullback and maybe they feel once bitten, twice shy,” Charles Hayter, CEO of digital currency data firm CryptoCompare, told CNBC.

“The euphoria has faded to some degree in the retail frenzy as regulators have moved to moderate the fads,” he added. “The data shows a continuous cornering of the market by the institutions.”

Last week, thousands of bitcoin investors flocked to Miami for an event billed as the biggest bitcoin event in history.

The conference had some strange highlights, including El Salvador’s President Nayib Bukele announcing plans for the country to accept bitcoin as legal tender.

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