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The FBI recovered a huge chunk of the Colonial Pipeline ransom

  • The DOJ seized $2.3 million of the ransom that Colonial Pipeline paid to hacking group Darkside.
  • The FBI tracked the payments to a bitcoin wallet, for which it happened to have the password.
  • This let the FBI legally seize the money and cut off Darkside’s access to its ransom money.

The Department of Justice announced Monday that it had recovered a majority of the ransom paid by Colonial Pipeline to hackers who shut down its operations last month and caused massive fuel shortages and price hikes.

The DOJ said that it had recovered $2.3 million worth of bitcoin out of the $4.4 million ransom that Colonial had paid to Darkside, the group behind the hack.

How did the government pull it off?

The FBI had what was effectively the password to a bitcoin wallet that Darkside had sent the ransom money to, allowing the FBI to simply seize the funds, according to the DOJ.

‘Following the money’

Despite cybercriminals’ increasingly sophisticated use of technology to commit crimes, the DOJ said it used a time-tested approach to recover Colonial’s ransom payment.

“Following the money remains one of the most basic, yet powerful tools we have,” Deputy Attorney General Lisa Monaco said in the DOJ’s press release.

Colonial was hacked by Darkside on May 7, and alerted the FBI that same day, according to the DOJ.

On May 8, with its operations knocked offline and amid an emerging gas crisis, Colonial opted to pay the ransom (much to the chagrin of government crimefighters who were simultaneously trying to shut down the hack).

Colonial told the FBI that Darkside had instructed it to send 75 bitcoin, worth about $4.3 million at the time, according to an affadavit from an FBI special agent involved in the investigation.

The FBI agent then used a blockchain explorer – software that lets users search a blockchain, like bitcoin, to determine the amount and destination of transactions – to figure out that Darkside had tried to launder the money through various bitcoin addresses (similar to bank accounts), according to the affadavit.

Eventually, through the blockchain explorer, the FBI agent was able to track 63.7 bitcoin to a single address that had received an influx of payments on May 27.

Fortunately for the FBI, according to the agent’s affadavit, the agency had the private key (effectively the password) for that very address.

Bitcoin addresses rely on a two-key encryption system to keep transactions secure: one public and one private. The public key is shared openly so anybody can send money to that address. But once the sender has encrypted their payment with the recipient’s public key, only the recipient’s private key can decrypt and gain access to that money.

That’s why private keys are meant to be closely held secrets, stored in a secure place. As of January, $140 billion in bitcoin – around 20% of existing bitcoin – were held in wallets where people had forgotten or lost their private keys.

In Darkside’s case, the FBI managed to gain access to its public key, and after getting a seizure warrant from a federal court, the agency used the key to access Darkside’s address and swipe 63.7 bitcoin, or around $2.3 million.

The FBI didn’t say how it had managed to obtain the key, but said it sent a warning to other potential ransomware hackers.

“Ransom payments are the fuel that propels the digital extortion engine, and today’s announcement demonstrates that the United States will use all available tools to make these attacks more costly and less profitable for criminal enterprises,” Monaco said in the release.

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Australia Business Conditions At Record High: NAB

Australia’s business conditions rose to a record high in May, while business sentiment weakened moderately from the previous month, survey results from National Australia Bank showed on Tuesday.

The business conditions index climbed to 37 in May from 32 in the prior month. Meanwhile, the business confidence indicator came in at 20 in May, down from a record high of 23 in the previous month.

The survey showed that the employment, profitability and trading sub-components all reset last month’s highs – with trading conditions at exceptional levels. Forward orders also remained at a record level.

The survey measure of reported capex rose further suggesting that the strong rise over 2021 is more than just a rebound from disruptions to activity and uncertainty during 2020. Overall, this was another very strong read for the business sector – and forward indicators point to ongoing strength in the near-term, NAB Group Chief Economist, Alan Oster, said. This is a pleasing result coming after last week’s national accounts which showed that the economy has now surpassed its pre-COVID level. The economy now appears to be entering a new period of growth after a very rapid rebound, Oster added.

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German Retail Sales Down More Than Expected In April

Germany’s retail sales declined more than expected in April, data released by Destatis revealed on Wednesday.

Retail sales declined 5.5 percent on a monthly basis, reversing March’s 7.7 percent increase. Economists had forecast sales to drop 2 percent in April.

On a yearly basis, growth in retail sales slowed to 4.4 percent from 11.6 percent in March. This was slower than the expected expansion of 10.1 percent.

Destatis said the federal emergency brake in the second half of April and the Easter business in March 2021 are very likely to have been the main reasons for the decline in sales.

Food, beverages and tobacco sales slid 3.4 percent from the last year, while non-food store sales surged 10.6 percent in April.

Compared to February 2020, the month before the crisis, retail sales were calendar and seasonally adjusted 0.8 percent lower in April. In nominal terms, retail sales decreased 5.4 percent on month, while turnover advanced 5.8 percent annually in April.

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M&S Slips To Loss In FY21 On Weak Revenues

Retailer Marks & Spencer Group Plc (MAKSY.PK, MAKSF.PK, MKS.L) reported Wednesday that its 53-week fiscal 2021 loss before tax was 209.4 million pounds, compared to profit of 67.2 million pounds in the 52-week last year.

On a 52-week basis, the loss before tax in fiscal 2021 was 201.2 million pounds.

Loss per share for 53 weeks were 10.1 pence and 52 weeks were 9.8 pence, while last year’s profit was 1.3 pence.

Profit before tax & adjusting items was 50.3 million pounds for 53 weeks and 41.6 million for 52 weeks, while last year’s adjusted profit was 403.1 million pounds.

Adjusted basic earnings per share were 1.4 pence for 53 weeks and 1.1 pence for 52 weeks, compared to 16.7 pence a year ago.

Group revenue before adjusting items was 9.12 billion pounds. On a 52-week basis, group revenue fell 11.9 percent to 8.97 billion pounds from last year’s 10.18 billion pounds.Ocado Retail delivered 43.7 percent revenue growth over the 52 weeks.

The company noted that overall trading for the first six weeks of the financial year and since reopening has been ahead of the comparable period two years ago in 2019/20.

Marks & Spencer said, “While encouraging, it is unclear how the recovery will develop and if consumer activity will sustain. International markets continue to face headwinds with ongoing disruption and the material costs of Brexit which we are working to mitigate. At this early stage our central case is that we will generate profit before tax and adjusting items between £300-350m and as capital expenditure recovers towards pre-pandemic levels, our ambition is for a further reduction in net debt.”

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Virgin Media – O2 Merger Approved in the U.K

The UK’s Competition & Markets Authority or CMA announced its final approval of the 50:50 joint venture between Liberty Global and Telefonica to combine Virgin Media and O2.

The CMA cleared the transaction without remedies and now all regulatory conditions are met in alignment with the original terms and the transaction is now expected to close by June 1, 2021.

Last month, the CMA said it provisionally cleared the proposed merger of Virgin Media Inc. (VMED.L, VMED) and Virgin Mobile with O2.

Virgin Media and Virgin Mobile are owned by Liberty Global plc, while O2 is owned by Spanish telecom major Telefonica SA (TDE.L, TEF).

Liberty Global and Telefonica announced the joint venture last May, bringing together Virgin Media, the UK’s fastest broadband network, and O2, mobile operator. The joint venture is expected to deliver substantial synergies valued at 6.2 billion pounds on a net present value basis after integration costs and will create a nationwide integrated communications provider with 11 billion pounds of revenue.

Liberty Global and Telefonica announced last month the appointment of Lutz Schüler as Chief Executive Officer and Patricia Cobian as Chief Financial Officer of the combined company upon completion of the transaction.

Schüler is currently Chief Executive Officer of Virgin Media and Cobian is Chief Financial Officer at O2.

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Australia Jobless Rate Falls To 5.5% In April

The unemployment rate in Australia was a seasonally adjusted 5.5 percent in April, the Australian Bureau of Statistics said on Thursday.

That was beneath expectation for 5.6 percent and down from the upwardly revised 5.7 percent in March (originally 5.6 percent).

The Australian economy lost 30,600 jobs last month, well shy of expectations for a gain of 15,000 jobs following the addition of 70,700 jobs in March.

The participation rate fell to 66.0 percent, missing forecasts for 66.3 – which would have been unchanged from the previous month.

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BNP Paribas Q1 Profit Climbs On Strong Revenues

French lender BNP Paribas (BNPQY.PK, BNP.L) reported Friday that its first-quarter net income attributable to equity holders came to 1.77 billion euros, up 37.9 percent from last year’s 1.28 billion euros.

Excluding the effect of exceptional items and the impact of taxes and contributions subject to IFRIC 21, net income was 2.82 billion euros.

Meanwhile, net income declined 7.8 percent from the first quarter 2019, prior to the Covid crisis.

Pre-tax income was 2.82 billion euros, 57.3 percent higher than last year’s 1.80 billion euros, and up 5.2 percent from 2019.

Operating income grew 79 percent year-over-year to 2.34 billion euros.

At 11.83 billion euros, revenues were up 8.6 percent from last year’s 10.89 billion euros. Revenues increased 12 percent at constant scope and exchange rates. Revenues were 6.1 percent higher than in the first quarter 2019.