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- Coinbase security cheif credits old police ivestigation and MLAT for getting private keys
- Debate on how FBI managed to get its hands on the private keys
- Giving private keys to agencies goes against the spirit of cryptocurrency
Chief Security Officer of Coinbase has refuted the news that it was involved in any Bitcoin ransom seizure. The CSO commended the god old-fashioned police investigation, which helped the FBI obtain the private keys.
Last month a series of crippling ransomware attacks were conducted on Colonial Pipeline by a hacker group known as Darkside. The Colonial Pipeline management decided to pay the ransomware because it could not ascertain the extent of the ransomware attack and did not know how to deal with it. However, it did inform the FBI, and the process of paying the ransomware to Darkside by Colonial Pipeline was executed as per the Federal Agencies direction. The FBI and DOJ were able to zero in on the wallet where the payment was made.
Coinbase’s CSO Philip Martin denies any involvement in ransom seizure
Coinbase’s CSO Philip Martin took to Twitter on June 8 to refute suggestions that it was in some way involved with the seizure of the crypto coin in the Colonial Pipeline ransomware attack. He also added that Coinbaswe was not a target of the warrant, nor is there any evidence that the ransomware transaction was channeled via a Coinbase account/wallet.
The official seizure story has several inconsistencies. Government officials said that they recovered 63.7 BTC, worth roughly $2.3 million. The FBI claimed that it obtained Darkside group’s private keys but did not reveal how or from which sources the Federal Agency received the keys.
As per the affidavit, the private key was in the custody of the FBI in the Northern District of California. It was seen by many as a connection with coinbase, which had several servers in that area. Many Twitter users pointed to this coincidence. However, Martin refuted these claims and said that seizures warrant specified property in the Northern District of California. It does not mean Coinbase but one of the many Northern California FBI field offices.
Pooled hot wallet storage mechanism of coinbase makes it impossible to give a specific private key
Martin added that since the storage mechanism worked on a pooled hot wallet, it will not make sense to give a specific private key to someone. On being questioned about how the FBI managed to get its hands on the private key, Martin credited it to some good old-fashioned police investigation and the mutual legal assistance treaty (MLAT) request and some political pressure to get access.
Concerns have been expressed about authorities getting their hands on the private keys. However, Federal officials have several tricks up their sleeve to access personal information. On the day the DOJ was toasting their victory and recovering the ransomware paid, a report surfaced that detailed a fake encrypted communications app used by criminals to rob messages and private information. Interestingly, the FBI used the same software to keep a tab on criminal activities on a massive scale.
Martin particularly pointed to the BitQuery graphs and said that any reference to any document or charts referring to coinbase is just a concept and not the crypto exchange itself. The online debate continues that collaboration with government agencies goes against the very spirit of cryptocurrencies based on decentralized, private, and an alternative to state-regulated finance. US authorities have still not explained how they managed to get the private keys that gave the FBI access to the digital wallets used by Darkside hackers.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
