Crypto exchange Bitfinex has been ordered to freeze some $860,000 in BTC, after it was traced in connection with a ransomware attack.
A court in the U.K. ordered Bitfinex to seize the tokens following an extortion scam which saw the victim paying $950,000 in BTC through an insurance company.
According to reports, only some of the money was converted to fiat, with the remainder sent to an address linked to Bitfinex. The court order demands Bitfinex freezes the cryptocurrency and submits the know-your-customer (KYC) information held about the account holder.
The victim of the attack was an unnamed company, which saw its computers hacked and held to ransom. Initial demands of $1.2 million were eventually settled for $950,000, and paid by the firm’s insurers in the first instance.
While the money converted to fiat is untraceable, law enforcement was able to track down the remaining BTC to the Bitfinex address, with the help of blockchain analysis firm Chainalysis.
Director of Communications at Chainalysis, Maddie Kennedy, said their tracing software was instrumental in recovering the funds: “A leading cyber insurer used Chainalysis software to investigate ransomware payments made on behalf of their clients and trace the flow of funds from the point of extortion to known services such as exchanges.”
As a result of the funds being tracked to Bitfinex, lawyers for the insurance firm were able to petition to the court to freeze the funds, which should allow them to recover the losses paid in the ransom.
In a statement, Bitfinex said it was cooperating with law enforcement, and denied any responsibility in the matter.
“Bitfinex has robust systems in place to allow it to assist law enforcement authorities and litigants in cases such as this. 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.”
In the ruling, the court said while Bitfinex had been cooperating to some degree, they were awaiting a court order before disclosing account information.
“It is fair to say that [Bitfinex], at the moment at least, have cooperated with the claimant in the following sense, which is that in email correspondence they have indicated that they are not able to comply with any order to identify anyone associated with the account, absent a court order, but that it is their practice to comply with the court order for any national jurisdiction.”
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