Category Archives: Crime

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Florida City Pays out Bitcoin Ransom to Hackers

In Florida, Riviera Beach’s city council has been forced to pay out a ransom of USD 600,000 in Bitcoin to hackers who targeted its computer systems.

With email and 911 dispatches affected by the attack in May, River Beach City Council voted to pay off the hackers in order to protect their systems.

Although Bitcoin is rarely used as ransom payment for such cyberattacks, they are costing the US millions of dollars, according to the US Department of Homeland Security, with “costly and destructive” malware being used by hackers.

The department claims that ransomware has now become the fastest developing malware threat to individuals and to organizations. Recently, attacks have targeted airports and ports such as Cleveland Hopkins International Airport and San Diego Port where flight information systems and computers were affected. Hospitals have also been targeted and also city government offices in Atlanta and New Jersey.

The Attack at Rivera beach, 50 miles north of Fort Lauderdale, began when a Police Department worker opened a malware-infected email attachment, which alerted the local authorities to what was happening. The malware infection then spread through the city’s computer systems resulting in the council spending USD 1 million on new computers.

A New Times Report reported that the hacker ransom was to be paid in Bitcoin with the attackers failing to guarantee that they would cease the attack upon receiving the funds.

A council in Baltimore is still picking up the pieces after being paralyzed by a cyber attack that froze a large chunk of its computer network, jamming emails and bill payments. Last week, many city employees were still without email, and repairs are likely to take months. The attack has cost the city over USD 18 million to date after Baltimore refused to pay the BTC 13 (USD 76,000 at the time) ransom.

Tyler Moore, a University of Tulsa cybersecurity professor argues that “attackers have found a playbook that is working” and will target small government departments who are willing to pay.

 

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Investment Heavyweights Add Investment Spark to Digital Security Firm Fireblocks

Investment Heavyweights Add Investment Spark to Digital Security Firm Fireblocks

Fireblocks, a platform which secures and protects digital assets in transit, is getting some serious backing for its latest project from the proprietary investment arm of Fidelity International.

The USD 16 million in Series A funding from investment heavyweights including Cyberstarts, Tenaya Capital, and Eight Road will now enable Fireblocks to seek further backing and further increase its development.

The company is certainly a friend of the industry enabling users to safeguard themselves from digital hacks and being compromised online. Their platform now offers users increased security using industry standard protection. Exchanges are increasingly looking at companies such as this to protect the transmission of storage of digital assets.

The platform also allows the use of several layers of security including passwords, biometrics, and two-factor identification, which have all now become industry standard. Co-Founder Michael Shailov stated that his main aim is to eliminate cybercrime and protect clients from such events as “clearly sophisticated hacking by true professionals, including nation-states“.  Even governments around the globe are now considering blockchain as part of their anti-hacking protection. Shailov explained that transfer speed is becoming more important as a means of protecting users:

“There was a need to take assets, either native to the blockchain or tokenized assets or securities, and move, trade, sell them in a reasonably fast time frame… Keeping assets locked down in cold storage like a traditional custodian is antithetical in the way [investment firms dealing in crypto] operate.”

The company has grown quickly from its startup this year with hundreds of millions of dollars’ worth of crypto transfers already successfully protected, with a network linked to 15 exchanges and 180 cryptocurrencies, including tokens and stablecoins.

 

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Big Brother Creator Suing Facebook over Fake Crypto Ads

Big Brother Creator Suing Facebook over Fake Crypto Ads (1)

John de Mol, Dutch billionaire and creator of the much-franchised reality show Big Brother, is to sue media giant Facebook for allowing fake ads on its platform to promote fraudulent Bitcoin-related businesses claiming that they had entrepreneur’s backing.

De Mol, whose image was also used in some of the advertising, claims that he was not alone in being targeted in this way with consumers being duped out of EUR 1.7 million (USD 1.9 million) from adds linked to him and further funds being extorted by using other Dutch celebrities in the same way.

An Amsterdam District Court Judge heard that Facebook had not reacted quickly enough to complaints about the advertising, having allowed them to go through the media giant’s vetting process.

Defending Facebook, lawyer Jens van den Brink argued that the company could not monitor advertising across all its platforms and did, in fact, respond quickly to requests to have the fraudulent advertising removed. Facebook according to their lawyer had also recently met with the Dutch financial markets regulator AFM to investigate means to address scammers gaining access to FB platforms.

“I don’t know what reality Facebook lives in, but that doesn’t work,” said de Mol’s Lawyer Jacqueline Schaap, claiming that its current vetting system wasn’t enough and that such advertising should simply be blocked.

“The people who push these kinds of ads are persistent, they are well-funded and they are constantly evolving their deceptive tactics to get around our systems,” responded Rob Leathern, a manager at California-based Facebook.

 

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US Crypto Users Hit by Sim Jacking Flurry

US Crypto Users Hit by Sim Jacking Flurry

Over the past week, the US cryptocurrency community has been reeling from a recent wave of sustained SIM swapping attacks.

The attacks were limited to the US alone and seemed to have targeted T-Mobile and AT&T customers.

SIM swapping/jacking is a type of account takeover fraud that generally targets a weakness in two-factor authentication and two-step verification, where the second factor or step is an SMS or a call placed to a mobile telephone. Effectively the perpetrator uses various techniques (usually social engineering) to transfers a victim’s phone number to their own SIM card.

My personal identity was hacked last week. The attacker was able to steal $100k+ in a sweep of my Coinbase account. I’m equal parts embarrassed, hurt, and deeply remorseful.

In an effort to raise awareness about the attack, I wrote about it here: https://t.co/ZnbB0AN6Gd

— Sean Coonce (@cooncesean) May 20, 2019

Attackers saw the rise in cryptocurrency as an opportunity to broaden their activities and make some serious money, although such events have been occurring for the past ten years. The number of attacks rocketed in 2017 as crypto took off. 2018 registered a number of SIM swap attacks in the US, but these numbers appear to a have reduced after police intervention. Caleb Tuttle, a detective with the Santa Clara County District Attorney’s office explained how the attacks work:

“The first is when the attacker bribes or blackmails a mobile store employee into assisting in the crime. The second involves current and/or former mobile store employees who knowingly abuse their access to customer data and the mobile company’s network. Finally, crooked store employees may trick unwitting associates at other stores into swapping a target’s existing SIM card with a new one.”

I’ve been hearing about another spate of SIM-jackings involving @TMobile, possibly involving bypassed PINs, which hint at insiders or weak processes.

The traditional telecom companies won’t clean up their act without a class action lawsuit and heavy fines. Switch to @googlefi. https://t.co/wp60qvyn7i

— Emin Gün Sirer (@el33th4xor) June 2, 2019

However on an encouraging note for cryptocurrency users, it has been reported that SIM swappers are usually caught, as phone providers usually pick-up the excessive log-ins associated with the activity.

 

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Australian IT Worker Charged for Crypto Mining at Government Agency

Australian IT Worker Charged for Crypto Mining at Government Agency

Another case of an opportunist tapping into government computer systems in order to mine cryptocurrency has been revealed; this time in Australia.

An Australian IT worker is facing charges after allegedly abusing his position as a contractor and illegally using government agency computer systems, according to Sydney police.

Although the activity of illegally using government equipment for mining is quite rare there have been other publicized cases over the past year. In 2018, Russian security officers arrested scientists at a top-secret warhead facility in Sarov, 240 miles east of Moscow. Several scientists had tried to use one of Russia’s most powerful supercomputers to mine Bitcoin.

In another case two school principals in Hunan province, China, got themselves into hot water for mining Ethereum at a Middle School in Chenzhou, running 6 machines around the clock in a school classroom.

The 33-year-old worker has been charged by the Australian federal police under sections 477.2 and 478.1 of the Criminal Code Act 1995 with “Unauthorised modification of data to cause impairment” and “Unauthorised modification of restricted data”.

With regards to this latest case in Australia acting Commander Chris Goldsmid, Manager Cybercrime Operations, stated that exploitation of this kind was a betrayal of public trust:

“Australian taxpayers put their trust in public officials to perform vital roles for our community with the utmost integrity. Any alleged criminal conduct which betrays this trust for personal gain will be investigated and prosecuted.”

It appears that the AUD 6.1 million (USD 4.2 million) lost to cryptocurrency scams last year was just the tip of the scamming iceberg according to a recent survey by the Australian Competition and Consumer Commission (ACCC). Scams covering all sectors totaled 378,000 reported in 2018, costing victims a huge AUD 489 million (approx. USD 344 million).

 

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Binance CEO Takes Sequoia Capital Back to Court on Reputation Claims

Binance CEO Takes Sequoia Capital Back to Court on Reputation Claims

Crypto exchange Binance‘s CEO Changpeng Zhao has just extended litigation battles with VC investor Sequoia Capital, after suing a unit of the firm in court, following an initial dismissal of their case against him.

Zhao has claimed that the suit by Sequoia Capital China has already damaged his reputation, regardless of its dismissal. He says that it prevented him from raising money at favorable valuations and thus, demands compensation from them.

In his new filing, it states:

“The injunction order has caused loss to me for which I am entitled to reasonable compensation by Sequoia. In particular, I have suffered i) a loss of chance to raise capital through successive rounds of financing at increasing high valuations; and ii) damage to my reputation.”

The filing, according to CoinDesk, was submitted to the Hong Kong High Court on 20 May. Zhao requested for a hearing on an order for “immediate summary of assessment of damages”. The court’s website has published confirmation of a hearing for the case on 25 June, between Zhao and SCC Venture VI, an incorporation of Sequoia Capital China.

In the original case made in the opposite direction, Sequoia accused Zhao of breaching exclusivity contracts by talking to IDG Capital in the midst of Series A funding discussions. However, in December 2018, the Hong Kong International Arbitration Centre dismissed all of Sequoia Capital’s claims.

The defendant has not responded to request for comments.

 

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US Court Awards Crypto SIM Swapping Victim $75 Million

US Court Awards Crypto SIM Swapping Victim  Million

The Supreme Court in California has ruled in favor of crypto entrepreneur Michael Terpin, awarding him compensation and punitive damages equalling to USD 75.8 million. The judgment went against a 21-year old Nicolas Truglia, whom Terpin names as the person responsible for the theft of his cryptocurrency.

Amid ongoing investigations into Truglia, who has been arrested for six other crimes, for other criminal activities, Terpin is still pursuing network provider AT&T for USD 224 million. He said:

“We, of course, are still actively pursuing our federal court case against AT&T, whose gross negligence we contend allowed these crimes to occur.”

Allegedly, Truglia is a member of a criminal gang whose modus operandi involves phone SIM card swapping. Calling themselves “The Community”, they took over users’ phones by replacing the SIM card with their own. It requires gathering enough data on the victim before asking the service provider to issue them a new SIM card with the same original details. Lookout’s Andrew Blaich explained:

“There are many public cases of attackers social engineering their way through a cellular company’s representative to get a SIM card issued for an account the attacker doesn’t own or have access to. It appears to be easy to do as all you need is a willing/susceptible representative at any cellular phone store.”

Law firm Silver Miller last year proceeded with lawsuits against AT&T and T-Mobile over their roles in facilitating SIM swapping in other crypto scams.

 

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Florida Court Orders Craig Wright to List Owned Bitcoin Addresses

Florida Court Orders Craig Wright to List Owned Bitcoin Addresses

Satoshi Nakamoto claimant Craig Wright has been ordered by a court in Florida to provide a list of owned Bitcoin addresses, which invariably might go a long way to prove whether or not he’s the real deal – Satoshi Nakamoto.

According to a Tweet by WizSec Bitcoin Research, a court order has been issued to Wright to produce the lists of owned Bitcoin addresses along with details about his alleged blind trust:

Craig Wright ordered by court to produce lists of owned bitcoin addresses along with details about his alleged blind trust: https://t.co/9bwaiiEECF

— WizSec Bitcoin Research (@wizsecurity) May 4, 2019

The court case involving Dave Kleiman v Craig Wright – the USD 10 billion lawsuit brought by Kleiman’s relatives that claimed Wright purportedly stole about 550,000 to 1 million Bitcoins from his supposed partner who helped developed the Bitcoin cryptocurrency shortly after the plaintiff died. Though Kleiman had died in 2013, the lawsuit which was filed by his estate last year seems to be taking a toll on the aberrant crypto enthusiast.

Many have argued that Wright isn’t the real Satoshi and that he has only spun contradictory stories to that effect. On the other hand, Wright refuses to back down and continues to claim he is the real Satoshi and has gone as far as suing anyone who has either called him a fraud or a liar.

Wright’s actions had an impact on the Bitcoin Satoshi Vision (BSV), as exchanges who were against his lawsuit filed against other crypto enthusiasts wanted to quiet him down, threatened to delist the asset from their exchange – they weren’t bluffing. Binance, Shapeshift and Kraken went on to delist the asset. Still, Wright maintained he was Satoshi.

Wright has been called to prove the only way the community can attest to the fact that he’s the real Satoshi. One Tweet reads: “The court should ask him to move the one million BTC between the cold wallets that Satoshi [owns]. That would be a good enough proof…”

Another bizarre happening in crypto space is the purported unveiling of Satoshi Nakamoto on gotsatoshi.com – captioned as the “Live Unveiling” and patronizing the curiosity of visitors to sign up for the unveiling. The countdown for the scheduled 14 May had begun over the weekend. Perhaps, another spinoff drama of Craig Wright’s I-Am-Satoshi satire, whatever the case, Bitcoin News will follow up on the outcome of the unveiling event.

 

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IBM to Use Blockchain Against Bicycle Thieves

IBM to Use Blockchain Against Bicycle Thieves (1)

Forbes reports that IBM Benelux (Belgium-Netherlands-Luxembourg) is turning to blockchain technology to assist with the fight against bicycle theft in Netherlands, where 84% of the population owns one or more bicycles.

There are more bicycles in the Netherlands than there are people. And since there are 17 million inhabitants with 13.5 million cyclists, it comes as little surprise that there  are over 22 million bicycles on the road, according to 2017 figures.

IBM has done quite a bit of research and concludes that bicycles are important in Western Europe, but there is a cumbersome process that comes with protecting them from theft. The global tech giant has now built a platform on blockchain which can be accessed my multiple actors on the same level to deal with each other with absolute trust.

Director of vehicle regulation and admission for the Dutch Vehicle Authority (RDW), Gerard Doll, told Forbes how they hit upon blockchain as the solution for owners, insurers and enforcement:

“We started looking at blockchain about two years ago, and it looked like a perfect solution for us to do another form of registration where quite a lot of parties are involved, and you are trying to build trust between all the parties involved.”

Louis de Bruin, IBM Blockchain Lead in Europe, said that the multiple and complicated points of information exchange between police, owners and insurance was such a cumbersome process but a blockchain platform could change all that:

“The bike blockchain simplifies the stress. All information about the stolen bicycle and the owner are recorded on the blockchain and available for all parties to access at the right moment. With the bike blockchain a claim for a stolen bicycle can be handled from A-Z in a matter of seconds rather than weeks or months.”

 

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Australian Crypto Scams in 2018 Totaled $4.3 Million

Australian Crypto Scams Reported in 2018 Totaled .3 Million

Australia has become well known for its big push towards endorsing both blockchain and cryptocurrency use, but like anywhere the country is prone to scams as recent figures just released have revealed, with over USD 4 million dollars lost to cryptocurrency scams in 2018.

However, it appears that the AUD 6.1 million lost to cryptocurrency scams last year was just the tip of the scamming iceberg according to a recent survey by the Australian Competition and Consumer Commission (ACCC). Scams covering all sectors totaled 378,000 reported in 2018, costing victims a huge AUD 489 million (approx. USD 344 million).

The figure alarmed many of the government agencies responsible for taking in scam reports over the year due to an increase of 41.7% over the previous year 2017, although it is unlikely that the figures represent the actual extent to which Australian consumers have been duped. “These record losses are likely just the tip of the iceberg. We know that not everyone who suffers a loss to a scammer reports it to a government agency,” ACCC Deputy Chair Delia Rickard said.

In terms of cryptocurrency scams, there were 674 reported in 2018; a 190% increase compared to the AUD 2.1 million reported to Scamwatch in 2017. The most heavily used scams were those based on cryptocurrency investments which represented over double all cryptocurrency scams combined. However, the ACCC report indicated that the rising occurrence of scams concerning crypto had risen in tandem with the rising popularity of cryptocurrency in general since 2017.

In general, hacking scams featured high on the list of consumers losses with a 49% increase in reports, and shopping scams appeared to be becoming more popular with scammers, targeting consumers with shoes, Apple and Samsung phones, puppies, and cars as a means to duping them and relieving them of their money.

 

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