Photo: Bloomberg

On Friday, May 7, Colonial Pipeline, which accounts for more than half of all petrol and diesel supplies across the US East Coast, including New York, Boston and Miami, was targeted by Darkside, a Russian ransomware gang. Cyber criminals stole sensitive data which forced Colonial to shut its pipelines down, causing a spike in prices at the pump and long queues of cars and trucks trying to fill up their tanks. Darkside demanded US$4.4 million ($5.9 million) worth of Bitcoin as ransom. As any key infrastructure firm would have done, the pipeline operator promptly deposited Bitcoin in Darkside’s digital wallet and got its data back. 

Four weeks later, the US Department of Justice announced that it had recovered most of the bitcoin that had been paid by Colonial to Darkside. The FBI has not disclosed exactly how it extracted the ransom from the extortionist gang’s digital wallet. But here is what we do know: All bitcoin transactions, even ransoms paid to hackers, are duly recorded on the blockchains that store data in blocks that are then chained together. Put simply, blockchains provide digital footprints that can be traced back to people or parties on both sides of a cryptocurrency transaction.

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