The price of bitcoin fell again on Tuesday amid a brutal selloff among digital currencies.
The reason for the move was unclear, although it may be related to concerns over the security of the cryptocurrency as US officials managed to recover most of the ransoms paid to hackers targeting the Colonial Pipeline.
Court documents state that investigators were able to access the password of 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 a surge in cyberattacks.
Bitcoin eased its slide below the $32,000 level late Tuesday. As of 4:01 p.m. ET, the world’s largest cryptocurrency was trading down 9% at $32,854.99.
Smaller digital coins also fell, with Ether falling nearly 8% to $2,499.28 and XRP tanking over 7%.
April 2021 looked like a banner year for the digital asset, with bitcoin above $60,000 for the first time. But the recent drop in crypto prices has shaken the confidence in the market. Bitcoin fell to around $30,000 last month, and is currently down almost 50% from its all-time high.
The digital currency is now up only 12% since the start of the year, although it is still more than three times as high as a year ago.
America collected most of the colonial ransom
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 the Colonial Pipeline.
According to a court document, the Federal Bureau of Investigation was able to access the “private key,” or password, for one of the hackers’ bitcoin wallets. Bitcoin has often been the currency of choice for hackers demanding a ransom payment to decrypt data locked by malware called “ransomware”.
Crypto media outlet Decrypt reported that there were unfounded rumors that the attackers’ bitcoin wallets had been “hacked”, an unlikely scenario.
Darkside, which reportedly received $90 million in bitcoin ransom payments before closing, operated a so-called “ransomware as a service” business model, where hackers develop ransomware tools and sell them to affiliates. Those who attack again.
According to blockchain analytics firm Elliptic, the confiscated funds represent the bulk of the Darkside affiliate, part of the ransom paid by Colonial.
John Hultquist, vice president of analysis at Mandant Threat Intelligence, called the move a “welcome development.”
“It has become clear that we need to use multiple tools to stem the tide of this serious problem, and even law enforcement agencies need to broaden their approach beyond building cases against criminals. needs to be made that may be beyond the comprehension of the law,” Holtquist said.
“In addition to the immediate benefits of this approach, a strong focus on disruption may discourage this behavior, which is spiraling into a vicious cycle,” he said.
Cryptocurrencies are weighing on a number of issues, including fears of regulatory clampdown and recent tweets from Tesla CEO Elon Musk.
Chinese authorities last month called for cracking down on crypto mining and trading. Once a major player in the market, China has moved to stamp out speculative investment in cryptocurrencies, banning the fundraising method known as initial coin offerings and shutting down local exchanges. Is done.
Meanwhile, Elon Musk has grown from a supporter of bitcoin to falling in love with it in just a few months. Musk’s electric car firm stopped accepting bitcoin as a payment method last month because of concerns over its environmental impact, resulting in a sell-off in the crypto market.
“Bitcoin bulls have been pulled back into the market and are probably twice as shy of being bitten once,” Charles Hetter, CEO of digital currency data firm CryptoCompare, told CNBC.
“The enthusiasm in the retail frenzy has waned somewhat, as regulators have gone into a frenzy,” he said. “The data is showing continued market lead by institutions.”
Last week, thousands of bitcoin investors descended on Miami for an event billed as the biggest bitcoin event in history.
There were some bizarre highlights at the conference, with El Salvador President Nayib Bukele announcing plans for the country to accept bitcoin as legal tender.
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