A British High Court has given judgment ordering cryptocurrency exchange giant Bitfinex to freeze any virtual currency account suspected to be holding a Bitcoin (BTC) ransomware payout 96 BTC worth about $861,200.
The ransomware was paid by the insurance company of an unnamed firm said to have suffered the cyberattack.
Bitfinex Wallet Allegedly Holds Bitcoin Ransom Payment
According to New Money Review, an England and Wales High Court (Commercial Court) has given a ruling ordering crypto exchange platform Bitfinex to freeze an exchange account suspected to hold the Bitcoin ransomware payout. The victim which remains an unnamed firm reportedly had their computer systems hijacked by ransomware back in October 2019.
The hackers demanded a $1.2 million payout in BTC. The firm was unable to meet the hacker’s demands and contacted its cyber insurance company who eventually financed a $950,000 payout in bitcoin and later filed a court complaint.
The insurance company reported that it made a total payment of 109.25 BTC which was partly converted to fiat currency. The remaining 96 BTC worth about $861,200 as at press time was paid into a Bitfinex exchange, per the court complaint.
The transaction was then traced using crypto tracking software made available by the cybersecurity firm Chainanalysis. According to a statement made by the Director of Communications at Chainanlysis, Maddie Kennedy, a significant amount of the BTC ransom was traced to a Bitfinex user.
An excerpt from the statement reads:
“A leading cyber insurer used Chainalysis software to investigate ransomware payments made on behalf of their clients and trace the flow of funds from the point of extortion to known services such as exchanges.”
The insurer’s lawyers were then able to file a successful petition for a freeze on the account.
The Word From Bitfinex Exchange
The exchange platform released a statement saying it has been working in collaboration with the victim and its legal representatives to track down the hackers and the BTC payout. An excerpt from the statement reads:
“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.”
According to the court ruling, the crypto exchange platform has so far complied with court orders and is expected to continue to do so. An excerpt from the court ruling reads:
“It is fair to say that the defendants, at the moment at least, have cooperated with the claimant in the following sense, which is that in email correspondence they have indicated that they are not able to comply with any order to identify anyone associated with the account, absent a court order, but that it is their practice to comply with the court order for any national jurisdiction.”
The court has now ordered Bitfinex to provide the Know-Your-Customer information associated with the suspected account on or before Tuesday (February 18, 2020).
With the rising trend of Bitcoin ransomware attacks, authorities have become more concerned with the payment of demands made by hackers. Two New York Senators have proposed two bills to ban government entities and jurisdictions from issuing the payment of Bitcoin ransomware demands with taxpayer money.
Crypto Ransomware Attacks Not Going Away
Ransomware attacks have become a major source of concern for crypto investors and businesses such as exchanges and crypto-wallets.
Back in May 2019, Blockonomi reported the growing profitability of ransomware attacks due to the prominence of malware such as Ryuk, Iencrypt, and Bitpaymer. The Georgie court’s administrative offices were attacked by ransomware causing a temporary shut down in the judicial system, as reported in July 2019.
Mexican Oil giant Pemex was the victim of a ransomware attack back in November 2019. The hackers reportedly shut employees out of their computers and demanded a 500 BTC payout in exchange for returned access.