Busted Through the Blockchain

It’s a story straight out of a crime novel, but it’s come into the real world. Imagine international crime syndicates communicating through encrypted applications so their plans and schemes are only accessible to each other so no authorities can trace them. Unbeknownst to them, though, there was a hitch in this seemingly perfect plan.

The app is called AnOm, which appeals to criminal clientele as a secure communications platform under the radar of governmental authorities.  Under this guise, a litany of member of criminal organizations including people connected with the Italian and Albanian mafias, motorcycle gangs, drug syndicates, and others started using the application. The FBI and the Australian Federal police“the two primary organizations behind the app” had quietly begun the infiltration in late 2018, culminating with the mid-2021 sting. In total, over 800 criminals were arrested in 18 different countries and hundreds of guns and over $48 million dollars were seized.

In another story that has affected millions of Americans, in early May 2021, the Eastern European (most likely Russian, though not state-sponsored) cybercriminal hacking group called DarkSide successfully infiltrated the Houston-based Colonial Pipeline with a ransomware cyberattack (the CEO of Colonial Pipeline has since testified that the compromised network didn’t use multifactor authentication). The attack prompted pipeline owners to shut down the system. Now under ransom, DarkSide demanded 75 Bitcoin (which equated to $4.4 million) in exchange for the software that would restore Colonial’s network. While the payment was delivered quickly, the application took a long time to restore the network. In total, the pipeline was shut down for six days.

That is only the first half of the story, though. While the exact details are hazy, the US Department of Justice reported that “by reviewing the Bitcoin public ledger, law enforcement was able to track multiple transfers of Bitcoin and identify that approximately 63.7 Bitcoins, representing the proceeds of the victim’s ransom payment, had been transferred to a specific address, for which the FBI has the ‘private key,’ or the rough equivalent of a password needed to access assets available from the specific Bitcoin address.”

20210617_SAC_CyberSecurityBadActor_1200x600Blockchain technology will be one of the keys to cracking down on bad actors.

What’s unclear is how exactly the FBI got the hacker’s private security key, though it is thought that anti cryptocurrency laundering and blockchain analytics group CipherTrace may have aided the FBI in the recovery of the 63.7 Bitcoin. While the recovery of the money is a win, because Bitcoin’s price had plummeted in the wake of the cyberattack and ransom, the total amount recovered only approximated $2.3 million of the $4.4 million ransom.

While we’re not sure if we would call either of these stories, particularly the latter one, heartwarming tales, there are some lessons to be learned. Namely, that blockchain technology and its immutability will be important for cybersecurity and security as a whole going forward. Governments and private enterprises alike can undoubtedly benefit from the data security blockchain brings, so if you want to keep your data safe, the SIMBA Chain team can help you develop your smart contract needs.