Why Colonial Pipeline CEO paid DarkSide hackers bitcoin ransom

Hackers shut down a key company’s systems with a cyberattack causing panic buying. The boss reveals why he coughed up the money.

The CEO responsible for a company which is critical to US East Coast’s energy infrastructure admitted he had to pay a cypberattack ransom for the good of the country. Picture: Ozan Kose/AFP

Joseph Blount, CEO of a company responsible for nearly half of the US East Coast’s fuel supply, has publicly revealed he had no choice but to pay a $5.6 million ransom in bitcoin to hackers.

Early this month, an employee of the company Colonial Pipeline found a ransom note from hackers on a control room computer and despite calls to the FBI and engaging a cyber security firm, the payment had been authorised by that night.

The Colonial Pipeline provides roughly 45 per cent of the fuel for the East Coast, according to the company, yet the cyberattack shut down its fuel deliveries which are critical to the country’s energy infrastructure

Mr Blount told The Wall Street Journal that executives did not know how badly the cyberattack had breached its systems and how long it would take to restore the pipeline. As a result, they decided to pay the money.

“I know that’s a highly controversial decision,” Mr Blount told the publication.

“I didn’t make it lightly. I will admit that I wasn’t comfortable seeing money go out the door to people like this. But it was the right thing to do for the country.”

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The largest fuel conduit system in the US shut down its network after a ransomware attack. Picture: Drew Angerer/Getty Images North America/AFP

He added that the ransom was paid in consultation with experts, who had previously dealt with the organisation responsible, which US officials attributed to Russian-based professional criminal gang called DarkSide.

The gang, which is believed to specialise in creating ransomware used to breach systems, announced it had lost access to its infrastructure and was shutting down on Friday, although some claimed they could be going underground to regroup.

Ransomware is a type of malware designed to lock down systems by encrypting data and demanding payment to regain access.

Once the ransom was paid, the hackers provided a decryption tool to unlock the systems, but Colonial remained offline for a further six days. The fix was so slow it’s been reported, that the company opted to use its own backups to help restore the system.

But the nearly week-long shutdown caused panic buying at petrol stations in eastern US and a spike in fuel prices, while the government waived clean air and shipping and trucking regulations to deal with shortages.

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Despite being offered a fix, it still took almost a week for the company to come back online. Picture: Francois Picard/AFP

Mr Blount also revealed that the company sent out nearly 300 workers to keep their eyes on the pipeline on top of its usual electronic monitoring, as well as tasking others with patrolling its infrastructure to investigate whether there was any physical damage.

The attack is also set to cost Colonial more with tens of millions of additional money needed to fully restore the operations over a matter of months, Mr Blount said.

Berkeley Professor Robert Reich said last week that paying ransoms to hackers “should be illegal”.

Politician Bruce Westerman said the payment would make “Americans the target of future attacks”.

“Terrorist organisations should be met with the full force of the US Government and the message should be unequivocally understood: America does not bow to terrorists,” he said.