Coinbase Rejects Intervention in Colony Pipeline Litigation

The United States Department of Justice (DOJ) has recovered $2.3 million of the $4.4 million paid in BTC in the Colonial Pipeline case. Law enforcement seized the private keys of the colonial pipeline attackers. DarkSide Coinbase has denied all allegations that they were involved in providing data from its servers to the FBI. The capabilities of law enforcement and the FBI are deterring a harmful story for Bitcoin. Ransomware attacks rely on Bitcoin and other cryptocurrencies claimed to prevent the law from tracking the flow of money. The attack on Colonial Pipeline on May 7 cost the company $4.4 million. DOJ announced that it has recovered $2.3 million from Russia-based hacker group Darkside. Claims surfaced online about how the FBI obtained the private keys of the wallets pointed to Coinbase as the central figure of the investigation. Private Keys Are No Longer Private FBI agents have issued an affidavit containing a confiscation order that 63.7 BTC was recovered from the attackers. Outlining the warrant mechanisms, the statement lists the various private keys of users' wallets, providing a clear explanation of how funds are tracked. Government officials pointed out a brute-force hack to obtain private hacks. However, Preston Byrne argues that the user's wallet is on an exchange where authorities have issued an injunction. Philip Martin said the return of private keys was tied to "buzzing magic" or "old-fashioned policing" from the government. Amid speculation that Coinbase is facilitating the FBI's access to their wallets, Coinbase's CSO refuted the sentiment by taking to Twitter, saying, "Coinbase was not the target of the order and did not receive the ransom or any part of it. At any point." He also said that "Coinbase uses a pooled hot wallet", claiming that there is no need to hand over private keys as Coinbas has no embedded API export functionality.

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