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The seizure being part of the department’s investigation into a ransomware attack that shut down the Americas’ largest gas pipeline. The incident also gave rise to the fears that US officials may step up their cryptooversight—something that has helped spark a year-long bear market.
The global crypto market had dropped more than 11% in the last 24 hours, dipping below $1.5 trillion. It has been the lowest drop since a flash crash in May which eventually brought down the market to $1.3 trillion as compare to a previous month of high above $2.5 trillion.
The meltdown began on Monday, following rumours that the Department of Justice had confiscated an undefined amount of bitcoin in connection with the May 8 hacking on Colonial Pipeline, and grew overnight, wiping out more than $150 billion in market value by 9:45 a.m. EDT Tuesday.
By checking bitcoin’s public ledger, discovering the transaction, and utilizing a secret key to access the tokens, the department claimed Tuesday it confiscated 63.7bitcoins worth $2.3 million from extortionists affiliated with the cyberhacking ring DarkSide.
Although it’s unclear how the DOJ obtained the private key, experts such as Dr. Nicholas Weaver, a cybersecurity professor at the University of California at Berkeley,have speculated that federal officials effectively hacked the hackers in a rare display of government intervention in the cryptocurrency space.
The news shook all major tokens, with bitcoin, ether, and Binance coin all dropping 10%, 12%, and 14%, respectively, on Tuesday morning.