Bloomberg Says Colonial Pipeline Paid Hackers $5 Million in Crypto, Contradicting Other Media Reports
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Colonial Pipeline Co. paid hackers to restore access to its computer network, according to a Thursday Bloomberg report that contradicted early claims by numerous media outlets.
The company paid nearly $5 million in “untraceable” cryptocurrency to the perpetrators to provide a tool for decrypting its network, Bloomberg said, citing “two people familiar with the transaction.” The development contradicts earlier reports from The Washington Post and CNN backing claims that Colonial had no intention of paying the hackers.
The pipeline company resumed operations on Wednesday evening, five days after the May 7 attack, which was credited to an Eastern European hacking group known as DarkSide. Fuel shortages have taken hold across the Eastern Seaboard over the last week as a result of the incident, leading the U.S. Department of Transportation’s Federal Motor Carrier Administration to issue a regional emergency declaration in all of the states in which Colonial owns infrastructure — including Alabama, Delaware, Georgia, Louisiana, Maryland, Mississippi, Pennsylvania, New Jersey, North Carolina, South Carolina, Tennessee, Virginia, and Texas.
The FBI has said it “urges” companies against accommodating so-called “ransomware” demands. However, asked this week if the White House had knowledge of Colonial doing so, Deputy National Security Adviser Anne Neuberger demurred, saying, “Colonial is a private company, and we’ll defer information regarding their decision on paying a ransom to them.”
She added that it would be a “private-sector decision” for the company to make, and said the administration had “not offered further advice.”
It isn’t clear how Colonial used cryptocurrency to facilitate the transaction in a manner that would have been untraceable. Few, if any, digital currencies other than Monero prevent security researchers from following their trail. That currency is not widely available for trading.
