Bitcoin’s value declined by over 10% Tuesday after the U.S. government announced it had recovered $4.4 million worth of the cryptocurrency paid to hackers of Colonial Pipeline.
The largest token’s value dropped to $32,791.58 as of 9 a.m. Tuesday, in a major backslide. On Monday, news broke that the FBI had recovered most of the ransom paid by Colonial Pipeline to DarkSide following the group’s attack in early May.
“We identified a virtual currency wallet that the DarkSide actors use to collect a payment from a victim,” FBI Deputy Director Paul Abbate said at a Monday press conference. “Victim funds were seized from that wallet preventing DarkSide actors from using them.”
The DOJ has recovered the majority of the $4.4 million ransom Colonial Pipeline paid to the DarkSide hacking network in the wake of last month’s cyberattack.
— Bloomberg Quicktake (@Quicktake) June 7, 2021
The fact that the FBI managed to “trace the untraceable and seize it might be undermining the libertarian, free-of-government-control case,” senior Oanda market analyst Jeffrey Halley said of the holders’ sentiments following the news, according to Bloomberg.
This newly-discovered vulnerability of Bitcoin — which was believed to be beyond the reach of the government — caused a massive sell-out, driving the token’s market value down. (RELATED: BARR: Uncle Sam Moves To Control Cryptocurrency)
Halley added that “another capitulation” of Bitcoin may follow if its price falls below the $30,000 threshold, according to Bloomberg.
The token had already been under downward pressure after Tesla CEO Elon Musk slammed the cryptocurrency’s toll on the environment, reversing an earlier decision to allow purchasing Tesla vehicles with Bitcoin. The coin had lost 6.3% of its value in early June following Musk’s criticism, Bloomberg reported.