WASHINGTON (Reuters)

The Justice Department today (June 7) recovered some US$2.3 million in cryptocurrency ransom paid by Colonial Pipeline Co, cracking down on hackers who launched the most disruptive US cyberattack on record.

Deputy Attorney General Lisa Monaco said investigators had seized 63.7 bitcoins, now valued about US$2.3 million, paid by Colonial after last month’s hack of its systems that led to massive shortages at US East Coast gas stations.

The Justice Department has “found and recaptured the majority” of the ransom paid by Colonial, Monaco said.

An affidavit filed on Monday said the FBI was in possession of a private key to unlock a bitcoin wallet that had received most of the funds. It was unclear how the FBI gained access to the key.

A judge in San Francisco approved the seizure of funds from this “cryptocurrency address,” which the filing said was located in the Northern District of California.

Colonial Pipeline had said it paid the hackers nearly US$5 million to regain access. Bitcoin was trading down nearly five per cent around 1800 ET (2200 GMT). The cryptocurrency’s value has dropped to around US$34,000 in recent weeks after hitting a high of US$63,000 in April.

Bitcoin seizures are rare, but authorities have stepped up their expertise in tracking the flow of digital money as ransomware has become a growing national security threat and put a further strain on relations between the United States and Russia, where many of the gangs are based.

“Right now, prosecution is a pipedream,” Vice President John Hultquist of the Mandiant cybersecurity firm said in praising the move. “Disrupt. Disrupt. Disrupt.”

The hack, attributed by the FBI to a gang called DarkSide, caused a days-long shutdown that led to a spike in gas prices, panic buying and localised fuel shortages. It posed a major political headache for President Joe Biden as the US economy was starting to emerge from the COVID-19 pandemic.

The White House urged corporate executives and business leaders last week to step up security measures to protect against ransomware attacks after the Colonial hack and later intrusions that disrupted operations at a major meatpacking company.

Deputy FBI Director Paul Abbate, who spoke at the same news conference as Monaco on Monday, described DarkSide as a Russia-based cybercrime group.

Abbate said the FBI was tracking more than 100 ransomware variants. DarkSide itself victimised at least 90 US companies, including manufacturers and healthcare providers, he said.