Coinbase Chief Of Security: Exchange Wasn’t Involved In FBI BTC Seize

The Coinbase chief of security claims that the exchange wasn’t involved in the FBI Bitcoin seize as the US DOJ announced there was a partial recovery of $4.4 million paid in a ransom attack as reported recently in our cryptocurrency news.

The operation was undertaken by a special task force that was created by Biden’s administration to address cyber attacks. Colonial Pipeline was affected by the attack, controls about 45% of the East Coast fuel and after the main computer of the company was attacked by an alleged Russian hacker group, its CEO Joseph Blount was forced to pay the criminals. The DOJ then shared more details about the operation via a press conference but the report was not really clear and the authorities provided mixed information as experts pointed out. The government officials hinted at the chance of a Bitcoin wallet being hack to obtain the private keys.

However, the actions taken and the data provided by the governemnt led experts to speculate the true course of action. The lawyers on the case believe that the Russian hack group wallet was on an exchange or cloud server which the authorities hit with both the warrant and the gag order. Maybe the most peculiar theory is the one that involves crypto exchange Coinbase as a part of the Federal Investigation and in a response to the comments, Philip Martin who is the Coinbase chief of security denied the rumors and said:

“I’ve seen a bunch of incorrect claims that Coinbase was involved in the recent DOJ seizure of bitcoin associated with the Colonial Pipeline ransomware attack. We weren’t.”

Martin added that coinbase didn’t receive the warrant and in addition, he said that the exchange also didn’t receive BTC related to a ransom or criminal activity at any point. He said:

“You can take my word for it, or take the (sworn!) word of the agent who wrote the affidavit: “34.  The private key for the Subject Address is in the possession of the FBI in the Northern District of California”

Due to the fund mechanisms of the exchange, a pooled hot wallet, the executive says it will not make sense to surrender to the specific private keys as Martin added:

“I’ve also read that because the seizure warrant specified property in the Northern District of California, it had to be targeted at Coinbase.  Nope.  What this likely means is that the private key is located at one of the many Northern California FBI field offices.”