Colonial Pipeline, the largest U.S. fuel pipeline, has allegedly paid a ransom of about $5 million to mysterious hackers who breached the company’s network.
U.S. financial media Bloomberg reported on Thursday (May 13) that the information was provided by sources familiar with the inside story. The source said the payment was made using bitcoin. A total of 75 bitcoins were paid, with each bitcoin having a coin value equivalent to roughly $66,000. Recently the value of the bitcoin has dropped from a peak of $65,000 a piece to a little over $50,000.
The news gives hope that Colonial Pipeline will resume operations as soon as possible, but adds to the difficulties for the White House administration in deterring a repeat of the same kind of incident.
Colonial Pipeline’s public statement denies that the company paid a ransom to the hackers.
The hacker group, known as DarkSide, is allegedly based in Russia or somewhere in Eastern Europe, and on May 6, the cybercriminal group broke into Colonial Pipeline’s network, stole about 100 gigabytes of data and demanded a ransom in exchange for its return. They threatened to keep releasing the stolen data if the ransom was not delivered.
An earlier statement from the White House did not mention whether the company had paid a ransom to the hackers. White House deputy national security adviser Anne Neuberger said the decision to pay the ransom “is purely a private business decision. “We know that victims of cyberattacks face a very difficult situation where they have no choice and often must weigh the pros and cons when faced with a ransom demand.”
Newberg said, “Colonial Pipeline is a private company and we will respect their decision on the ransom issue.”
President Joe Biden told the media Thursday that he had “no comment” on whether he had been briefed on the ransom payment.
The cyberattack forced Colonial Pipeline to temporarily shut down its energy delivery operations, leading to gasoline shortages and a surge in oil prices in the eastern United States. Colonial Pipeline delivers 2.5 million barrels per day of gasoline, diesel and jet fuel and other refined products, accounting for 45 percent of the U.S. East Coast supply.
The company has now partially resumed delivery operations and is working to deliver gasoline to stations that are experiencing supply shortages.
U.S. House Speaker Nancy Pelosi said Thursday that companies hit by cyberattacks should not have to pay ransoms. Perosi said at a news conference, “We don’t want people to think that money is involved when the security of our critical infrastructure is at stake.”