Security News > 2021 > July > Seizing Cryptocurrency: How is Law Enforcement Tracing and Recovering Bitcoin Payments?
Taken at face value, these events could be taken to imply that law enforcement has found some way to crack the encryption of bitcoin wallets.
Tracing bitcoin wallets is difficult but not beyond the resources of law enforcement.
As alleged in the supporting affidavit, by reviewing the Bitcoin public ledger, law enforcement was able to track multiple transfers of bitcoin and identify that approximately 63.7 bitcoins, representing the proceeds of the victim's ransom payment, had been transferred to a specific address, for which the FBI has the "Private key," or the rough equivalent of a password needed to access assets accessible from the specific Bitcoin address.
With knowledge of the bitcoin location, with a key to the wallet, and a court order, the FBI had everything necessary to open the wallet and seize the bitcoin.
What remains unexplained is how and why the bitcoin was gathered, and how did the FBI get the key?
We have explored several hypotheses on how U.S. and UK law enforcement could have effected two major bitcoin seizures.