Bitcoin price falls after US reclaims Colonial Pipeline crypto ransomJune 8, 2021
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The price of bitcoin fell Tuesday, one day after US officials announced that they managed to recover most of the bitcoin that was paid as ransom to the Colonial Pipeline hackers.
Bitcoin traded almost 12 percent lower on Tuesday. The crypto was exchanging hands at about $31,800 per coin as of noon ET.
Other cryptos such as ether, binance coin, cardano and dogecoin also saw double-digit drops. And shares of crypto exchange Coinbase fell more than 4 percent in midday trading.
Tuesday’s losses put bitcoin about 50 percent below its peak earlier this year.
Anthony Denier, CEO of trading platform Webull, said the Department of Justice’s announcement that they were able to retrieve the ransom payment is hurting the price of bitcoin.
He noted that it’s unclear how the government got the crypto back, but regardless, “this shows bitcoin isn’t as secure as many people believe,” Denier told The Post.
“Criminals have been using bitcoin because of the supposed inability of governments to get at it, but if the US did reclaim the money, that destroys that claim,” he said. “This could be a very big problem for people trying to get money out of countries with poor economies. If governments can claw it back, that hurts its appeal.”
It’s not clear that the drop in the market was driven only by the Justice Department’s announcement.
Brock Pierce, chairman of the Bitcoin Foundation, said other factors like “broader regulatory concerns and global taxation” are also pressuring the price of bitcoin.
“The retrieval of the ransom could actually be viewed in a positive way, meaning that the government has recourse to hold bad actors accountable for their actions,” he added.
But the Justice Department’s announcement that they were able to retrieve 85 percent of the 75-bitcoin ransom Colonial Pipeline handed over to DarkSide, the Russia-based cybergang behind the hacking, also raises questions about the traceability of bitcoin and other cryptos.
One of the key attributes of bitcoin hailed by enthusiasts is that it’s decentralized and untraceable, whereas fiat currencies like the US Dollar are regulated by a central bank and transactions are tracked by government agencies.
Federal investigators, led by a specialized ransomware task force created by the Biden administration, said Monday they were able to access the password for one of the hackers’ bitcoin wallets and recover the cryptocurrency.
Dan Roberts, editor-in-chief of Decrypt, which covers blockchain technology and cryptocurrencies, said there’s no indication that the US government was able to “hack” bitcoin or somehow trace the crypto. He noted an insider might have leaked the password to officials.
“You can’t really hack the bitcoin blockchain. I mean, that’s the whole value proposition and appeal of the bitcoin blockchain,” he told The Post, adding that the headlines are nonetheless pressuring the price of the crypto.
He said there are various factors pushing the price down, such as mounting regulatory concerns even as enthusiasm for the crypto market remains strong, evidenced by the recent bitcoin conference in Miami that drew about 50,000 attendees.
Internal Revenue Service Commissioner Charles Rettig on Tuesday asked Congress for the authority to regulate cryptocurrencies, especially when it comes to large transactions, at a Senate finance panel hearing.
And Chinese authorities last month called for their own crackdown on crypto mining and trading.
Recent tweets from Tesla CEO Elon Musk has added to the frothiness. The price of bitcoin fell last week after Musk posted a meme of a couple breaking up and added #Bitcoin and a broken-heart emoji. Two hours later, Musk posted an “I miss you” meme.
Musk’s tweets drew thousands of angry, stressed-out and disgusted replies, with many accusing him of “manipulating” the price of the volatile cryptocurrency.
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