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U.S. seizes $2.3 million in bitcoin paid to Colonial Pipeline hackers

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The U.S. Justice Department on Monday recovered some $2.3 million in cryptocurrency ransom paid by Colonial Pipeline Co, cracking down on hackers who launched the most disruptive U.S. cyberattack on record.

Deputy Attorney General Lisa Monaco said investigators had seized 63.7 bitcoins, now valued at about $2.3 million, paid by Colonial after last month’s hack of its systems that led to massive shortages at U.S. East Coast gas stations.

The Justice Department has “found and recaptured the majority” of the ransom paid by Colonial, Monaco said.

An affidavit filed on Monday said the FBI was in possession of a private key to unlock a bitcoin wallet that had received most of the funds. It was unclear how the FBI gained access to the key.

A judge in San Francisco approved the seizure of funds from this “cryptocurrency address,” which the filing said was located in the Northern District of California.

Colonial Pipeline had said it paid the hackers nearly $5 million to regain access. Bitcoin was trading down nearly 5% around 1800 ET (2200 GMT). The cryptocurrency’s value has dropped to around $34,000 in recent weeks after hitting a high of $63,000 in April.

Bitcoin seizures are rare, but authorities have stepped up their expertise in tracking the flow of digital money as ransomware has become a growing national security threat and put a further strain on relations between the United States and Russia, where many of the gangs are based.

“Right now, prosecution is a pipedream,” Vice President John Hultquist of the Mandiant cybersecurity firm said in praising the move. “Disrupt. Disrupt. Disrupt.”

The hack, attributed by the FBI to a gang called DarkSide, caused a days-long shutdown that led to a spike in gas prices, panic buying and localized fuel shortages. It posed a major political headache for President Joe Biden as the U.S. economy was starting to emerge from the COVID-19 pandemic.

The White House urged corporate executives and business leaders last week to step up security measures to protect against ransomware attacks after the Colonial hack and later intrusions that disrupted operations at a major meatpacking company.

Deputy FBI Director Paul Abbate, who spoke at the same news conference as Monaco on Monday, described DarkSide as a Russia-based cybercrime group.

Abbate said the FBI was tracking more than 100 ransomware variants. DarkSide itself victimized at least 90 U.S. companies, including manufacturers and healthcare providers, he said.

Colonial Chief Executive Joseph Blount, who will testify before the Senate on Tuesday, said in a statement that the company had worked closely with the FBI from the beginning and was “grateful for their swift work and professionalism.”

“Holding cyber criminals accountable and disrupting the ecosystem that allows them to operate is the best way to deter and defend against future attacks,” Blount said.

Commerce Secretary Gina Raimondo said on Sunday the Biden administration was looking at all options to defend against ransomware attacks and that the topic would be on the agenda when Biden meets Russian President Vladimir Putin this month.

Tom Robinson, co-founder of crypto tracking firm Elliptic, said that the bitcoin wallet from which the funds were taken had contained 69.6 bitcoins. The seizure announced on Monday was of just 63.7 bitcoins, which Robinson said likely represented the share that had gone to the DarkSide “affiliate” who had initially hacked into Colonial.

Investigators say DarkSide often used a partnership model with other hacking groups to compromise numerous victims.

DarkSide would normally keep a smaller share for its role in providing the encryption software and negotiating with the victim, Robinson said. On Monday, minutes after the first funds were transferred out, the rest followed. The U.S. government might have seized that second amount as well but not announced it yet, Robinson said.

The FBI affidavit filed on Monday said that the bureau had tracked the bitcoin through multiple wallets, using the public blockchain and tools. Small amounts were shaved off the initial 75 bitcoin payment along the way.

The remaining amount reached the final wallet on May 27 and stayed there until Monday.

(Reporting by Sarah N. Lynch, Jan Wolfe, Tim Ahmann, and Christopher Bing in Washington, Joseph Menn in San Franciso and Stephanie Kelly in New York; Writing by Mohammad Zargham and Lisa Lambert; Editing by Howard Goller)

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Trudeau says he discussed border with Biden, but no deal

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Prime Minister Justin Trudeau said on Sunday he has spoken with U.S. President Joe Biden about how to lift pandemic-related border restrictions between the two countries but made clear no breakthrough has been achieved.

U.S. and Canadian business leaders have voiced increasing concern about the ban on non-essential travel in light of COVID-19 that was first imposed in March 2020 and renewed on a monthly basis since then. The border measures do not affect trade flows.

The border restrictions have choked off tourism between the two countries. Canadian businesses, especially airlines and those that depend on tourism, have been lobbying the Liberal government to relax the restrictions.

Canada last week took a cautious first step, saying it was prepared to relax quarantine protocols for fully vaccinated citizens returning home starting in early July.

Trudeau, speaking after a Group of Seven summit in Britain, said he had talked to Biden “about coordinating measures at our borders as both our countries move ahead with mass vaccination.” Canada is resisting calls for the border measures to be relaxed, citing the need for more people to be vaccinated.

The United States is ahead of Canada in terms of vaccination totals.

“We will continue to work closely together on moving forward in the right way but each of us always will put at the forefront the interests and the safety of our own citizens,” Trudeau told a televised news conference when asked the Biden conversation.

“Many countries, like Canada, continue to say that now is not the time to travel,” Trudeau added, though he said it is important to get back to normalcy as quickly as possible.

 

(Reporting by David Ljunggren in Ottawa; Editing by Will Dunham)

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Man with 39 wive dies in India

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A 76-year-old man who had 39 wives and 94 children and was said to be the head of the world’s largest family has died in north east India, the chief minister of his home state said.

Ziona Chana, the head of a local Christian sect that allows polygamy, died on Sunday, Zoramthanga, the chief minister of Mizoram and who goes by one name, said in a tweet.

With a total of 167 members, the family is the world’s largest, according to local media, although this depends on whether you count the grandchildren, of whom Ziona has 33.

Winston Blackmore, the head of a polygamous Mormon sect in Canada, has around 150 children from 27 wives – 178 people in total.

Ziona lived with his family in a vast, four-story pink structure with around 100 rooms in Baktawng, a remote village in Mizoram that became a tourist attraction as a result, according to Zoramthanga.

The sect, named “Chana”, was founded by Ziona’s father in 1942 and has a membership of hundreds of families. Ziona married his first wife when he was 17, and claimed he once married ten wives in a single year.

They shared a dormitory near his private bedroom, and locals said he liked to have seven or eight of them by his side at all times.

Despite his family’s huge size, Ziona told Reuters in a 2011 interview he wanted to grow it even further.

“I am ready to expand my family and willing to go to any extent to marry,” he said.

“I have so many people to care for and look after, and I consider myself a lucky man.”

 

(Reporting by Alasdair Pal and Adnan Abidi in New Delhi; Editing by Raissa Kasolowsky)

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Huawei CFO seeks publication ban on HSBC documents in U.S. extradition case

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Huawei Chief Financial Officer Meng Wanzhou on Monday will seek to bar publication of documents her legal team received from HSBC, a request opposed by Canadian prosecutors in her U.S. extradition case who say it violates the principles of open court.

Meng’s legal team will present arguments in support of the ban in the British Columbia Supreme Court.

Meng, 49, was arrested at Vancouver International Airport in December 2018 on a warrant from the United States, where she faces charges of bank fraud for allegedly misleading HSBC about Huawei Technologies Co Ltd’s business dealings in Iran and potentially causing the bank to break U.S. sanctions on business in Iran.

She has been under house arrest in Vancouver for more than two years and fighting her extradition to the United States. Meng has said she is innocent.

Lawyers for Huawei and HSBC in Hong Kong agreed to a release of the documents in April to Meng’s legal team on the condition that they “use reasonable effort” to keep confidential information concealed from the public, according to submissions filed by the defense on Friday.

Prosecutors representing the Canadian government argued against the ban, saying in submissions filed the same day that “to be consistent with the open court principle, a ban must be tailored” and details should be selectively redacted from the public, rather than the whole documents.

A consortium of media outlets, including Reuters News, also opposes the ban.

The open court principle requires that court proceedings be open and accessible to the public and to the media.

It is unclear what documents Huawei obtained from HSBC, but defense lawyers argue they are relevant to Meng’s case.

Meng’s hearing was initially set to wrap up in May but Associate Chief Justice Heather Holmes granted an extension to allow the defense to read through the new documents.

Hearings in the extradition case are scheduled to finish in late August.

 

(Reporting by Moira Warburton in Vancouver; Editing by Howard Goller)

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