A UK court has ordered more than 96 BTC (~$900,000) to be frozen on cryptocurrency exchange Bitfinex after it was found that the money was related to a ransomware attack payment. The shady origin was first reported by a crypto sleuthing firm Chainalysis. The move follows a series of tactics used by companies to counter the not-so-novel use of cryptocurrencies in illicit activities.
Chainalysis provided evidence in court that almost 96 BTC, a part of a ransomware extortion money was deposited in Bitfinex’s accounts. An unnamed company had to pay ransomware hackers more than 109.25 BTC ($1.2 million) to get their important data back a while ago. A part of the actual payment was transferred into fiat and disappeared from the radar but the remaining 96 BTC of the same payment was eventually transferred into a Bitfinex’s account. Since the owner of the Bitcoin in between hadn’t changed, it is fair to say that the account holder has some role in the actual ransomware extortion case even if not direct involvement.
The victim company had paid in Bitcoin to the ransomware hackers through an insurance company. After the attack, sleuthing organization Chainalysis followed the ransomware transaction and eventually detected and reported the suspicious transaction. A case was also filed in the High Court of England and Wales (Commercial). Once the trial started, the UK court’s judge assessed the facts and eventually ordered a freeze on those funds. He has also ordered Bitfinex to provide the complete details of the transaction and its benefactor.
While it seems that Bitfinex may be a party to the whole saga but that may not be the case as Bitfinex doesn’t know the source from where Bitcoins are coming from. According to a statement from the cryptocurrency exchange:
Bitfinex has robust systems in place to allow it to assist law enforcement authorities and litigants in cases such as this….., We understand the focus of the Claimant’s attention is no longer on the Bitfinex platform. It now appears Bitfinex is an entirely innocent party mixed up in this wrongdoing.
But, at the same time, Bitfinex has been ordered to share all the details related to the user and his identification to the court. A deadline of February 18 has been placed on company to comply with the court’s orders.
This is actually a win for the cryptocurrency community as it shows that cryptocurrencies can be effectively used to clamp down on criminal activities. Conventional banks and their money trails take forever but Bitcoin’s money trail is transparent and everyone can see where the money went and those particular addresses can be tagged and monitored.
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