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Landmark lawsuit sees bitcoin from ransomware attack frozen

Landmark lawsuit sees bitcoin from ransomware attack frozen

A ransom payout of nearly £1 million in bitcoin lodged with Bitfinex has been frozen by the UK High Court in what is deemed a landmark case for the status of crypto assets.

A group of hackers paralysed a Canadian insurance company in October 2019, demanding a sum of £1.2m to be paid in bitcoin.

The company subsequently paid the equivalent of £950,000, which was then held on the cryptocurrency exchange Bitfinex.

Laywers state that the case is a landmark one as bitcoin has been explicity regarded as property by the Hih Court.

Bitfinex had told the High Court that it would require a court order to identify the owner of an account holding the ransomed funds.

The court ruled that the exchange must do so by December 18th. It has not been confirmed whether or not this deadline was met.

Bitfinex has issued a statement saying: "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."

Ransomware attacks are becoming increasingly prominent and attaining greater complexity and significance.

Wired magazine has reported that in 2019 such attacks accounted for $12bn in losses and caused $5bn in ransom to be paid out.

According to Chainanalysis, illegal funds sent to cryptocurrency exchanges from criminals totalled $2.8bn in 2019, up from $1bn the year before.

Comments: (3)

A Finextra member
A Finextra member 30 January, 2020, 11:53Be the first to give this comment the thumbs up 0 likes

It was about to be time!!

Chetan Ghadge
Chetan Ghadge - Wipro - Pune 31 January, 2020, 07:04Be the first to give this comment the thumbs up 0 likes

Can Bitfinex freeze movement of bitcoin from the crooks account ? I dont think so !!!! At most they can identify to whom the account belongs provided they had a robust KYC process. Anyhow , till the court order comes the bitcoins would have already moved :))

A Finextra member
A Finextra member 31 January, 2020, 09:29Be the first to give this comment the thumbs up 0 likes

That is the risk if you trade in commodities that are used to launder money, you could see it as reselling stolen goods. So these traders/services should be very carefull in accepting clients. If they cannot freeze or recover they should be held respnsible for the losses.