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The FBI likely exploited sloppy password storage to seize Colonial Pipeline bitcoin ransom

Mount Equity Group Tokyo, Japan > News > Tech > The FBI likely exploited sloppy password storage to seize Colonial Pipeline bitcoin ransom

The seal of the F.B.I. hangs in the Flag Room at the bureau’s headquarters.Chip Somodevilla | Getty Images

The FBI’s breach of a bitcoin wallet held by the cyber criminals who attacked Colonial Pipeline is all about sloppy storage, and not a reflection of a security vulnerability in the digital currency, crypto experts told CNBC.

On Monday, the Justice Department reported a successful mission to retrieve $2.3 million in bitcoin paid by Colonial Pipeline to ransomware hackers in April. Court documents indicated that investigators traced bitcoin transaction records to a digital wallet, which they subsequently seized under court order. Officials were then able to access that wallet with something called a “private key,” or password. 

It remains unclear how exactly the FBI retrieved the key. 

“I don’t want to give up our tradecraft in case we want to use this again for future endeavors,” Elvis Chan, an assistant special agent with the FBI’s San Francisco office, said in a news call Monday.

How the FBI likely seized bitcoin

Until the FBI is more transparent with its methods, it’s not possible to know exactly how federal investigators managed to retrieve the private key in question. But there are a few possible scenarios. 

DarkSide, the cyber criminal gang that