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Colonial Pipeline hackers most likely did NOT send bitcoins to an exchange like people are claiming

I keep seeing people comment that the only way the FBI seized the bitcoin from the Colonial Pipeline hackers were from a warrant to an exchange.

E.g.: https://twitter.com/JordanSchachtel/status/1401996717394960389?s=20
and
https://twitter.com/VickerySec/status/1402006151428861954

This is NOT what’s likely happened, how could they be sophisticated enough to pull of this type of hack yet send it to a KYC/AML exchange in America…

What we know is that law enforcement sent a seizure warrant AGAINST THE FBI, since the FBI had the private keys to where the bitcoins ended up. Strange? See bottom link.

So either:

* Someone working for the FBI has many Bitcoin laundering/mixing services on the darkweb who are actually working for the FBI, which the hackers were trapped into using. And then without revealing the process, said “the FBI has the private key to the hacked bitcoins”.

* Or a security team working for the FBI managed to hack DarkSide, using clues from the communications/negotiation between the hackers and their victims via surveillance programs… and through analysis of their decryption software etc. Then managed to hack them via some backdoor and sent the bitcoins to the FBI, which then led to the seizure warrant “against” the FBI.

I believe 1. is more likely, that a honeypot was setup, or 2. they got compromised somehow in a hack. But I don’t believe they stupidly sent the bitcoins to a coinbase account.

In particular read points 33-35. The hacked bitcoins where in the “SUBJECT ADDRESS” and had not been moved since, hence in possession with the FBI who had this seizure warrant against them from law enforcement, no where does it say this is against coinbase or any other exchange:
https://web.archive.org/web/20210607215535/https://www.justice.gov/opa/press-release/file/1402056/download



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4 Comments

  1. IMO there is a third possibility: the whole operation have been made under the FBI’ control with the 2 main objectives 1/ sensitive the US operators to the need to secure the networks 2/ discourage the use of bitcoin for hacking by showing that it is possible to recover the money.

  2. Who knows. Perhaps the NSA was originally the ones that did the attack on the pipeline and gave the FBI the key.

    All so that they could compromise the legitimacy of Bitcoin and possibly even give plausible deniability to the president to authorise a covert cyber defence network similar to what you outlined in your 1st likely scenario.

    Just a little conspiracy I’ll leave you with haha.

What do you think?

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