Topline
The Colonial Pipeline Company reportedly paid hackers $5 million on Friday following a cyberattack that forced the pipeline offline and created a severe gas shortage, sources told Bloomberg News Thursday, which conflicts with reports the company would not pay a ransom.
A Colonial Pipeline storage site in Charlotte, North Carolina on May 12, 2021. – Fears the shutdown … [+]
AFP via Getty Images
Key Facts
Colonial was attacked by DarkSide, a group of hackers in Eastern Europe, on Friday and the company was forced to stop service of 2.5 million barrels of gasoline for five days.
The pipeline company reportedly paid the $5 million in cryptocurrency soon after the cyberattack, but the tool the hackers gave the company to restore its computer network took too long to work.
The Washington Post reported Wednesday the company was working with FireEye, a cybersecurity company, to recover its systems rather than pay the ransom, and the FBI does not recommend paying ransomware hackers because it “doesn’t guarantee you or your organization will get any data back.”
Colonial announced Wednesday night pipeline service was fully restored, but many gas stations continued to experience gas shortages as the company warned there would be “intermittent service interruptions” over the next few days.
The national average gas price climbed to $3.028 a gallon on Thursday, the highest it’s been in six years, according to AAA.
Colonial has not responded to a request for comment from Forbes.
Key Background
The FBI concluded on Monday DarkSide was responsible for the cyberattack, and President Joe Biden said Russian officials may have “some responsibility” for the attack because the group of hackers used ransomware originated in Russia. Kremlin spokesperson Dmitry Peskov denied any Russian involvement in the attack. Colonial is responsible for transporting 45% of all fuel used on the East Coast, and the five-day outage left thousands of gas stations in the Southeastern United States without fuel. As of Thursday morning,14 states were experiencing fuel shortages that closed 49% of stations in Georgia, 34% of gas stations in Tennessee, 52% in South Carolina, 68% in North Carolina and 54% of gas stations in Virginia, according to the gas-tracking app GasBuddy.
Tangent
Colonial isn’t the first company to pay hackers ransom to try and restore service. In July 2020, U.S. travel company CWT paid hackers $4.5 million to try and recover corporate files and bring their computer systems back online.
Big Number
$350 million. That’s how much people paid hackers in ransom in 2020, according to the Institute for Security and Technology.
Further Reading
Colonial Pipeline Reportedly Won’t Pay Hacker Ransom (Forbes)
Colonial Pipeline Restarts Operations After Hack, But Fuel Shortages Will Linger (Forbes)