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UK Court Freezes a Ransomware-linked Bitcoin Account on Bitfinex

UK Court Freezes a Ransomware-linked Bitcoin Account on Bitfinex 101
Source: iStock/Ja'Crispy

The business and property division of the British High Court has instructed crypto exchange Bitfinex to freeze a bitcoin (BTC) account containing funds worth USD 860,000 after hearing that its owner may have links to a ransomware scam.

Per documentation released by the court, an unnamed “Canadian insurance company,” itself the client of an unnamed “English insurer,” was hit with a ransomware attack. Hackers, the court said, succeeded in installing the BitPaymer software on the Canadian company’s computers, and then encrypted the latter’s data.

The attackers then sent emails to the victim, including the following:

“Hello, to get your data back you have to pay for the decryption tool. The price is USD 1,200,000. You have to make the payment in bitcoin.”

The Canadian company, acting with the British insurer, then paid USD 950,000 worth of Bitcoin to the attackers. However, the hackers appear to have converted only a tiny amount of that figure into fiat with the remainder left in what appears to be an account on the Bitfinex exchange.

The British court has ordered Bitfinex to pass over its know-your-customer (KYC) information on the account owner.

As media outlet New Money Review reports, the court’s decision could bring about a legal precedent. The fact that the court allowed its business and property division to tackle the case could possibly pave the way for UK courts to consider cryptocurrencies as property in subsequent cases.

However, as reported in November 2019, UK Jurisdiction Taskforce confirmed that cryptoassets "to be treated in principle to be property, bringing the legal treatment of tokens into line with public perception."

The court confirmed that the suspicious transaction was flagged using tools created by American blockchain investigator Chainalysis.

The court stated that Bitfinex had indicated that “it is their practice to comply with the court order for any national jurisdiction.”

New Money Review quotes Bitfinex as stating,

“We have assisted the claimant to trace the stolen bitcoin and 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.”

Meanwhile, as reported in November 2019, a ransomware outbreak hit a Wisconsin-based IT company Virtual Care Provider Inc. , which provides cloud data hosting, security and access management to more than 100 nursing homes across the United States. Unknown attackers encrypted all data the company hosts and demanded a USD 14 million ransom in bitcoin in exchange for a digital key needed to access the files.

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