The Stroz Friedberg Cyber Brief


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  FEATURED STORY            

MONDAY, FEBRUARY 5, 2018

GLOBAL REGULATORS TIGHTEN RESTRICTIONS ON CRYPTOCURRENCIES

Authorities in the two most populous countries are moving to bridle the expansion of virtual currency markets. The Chinese government is reportedly planning to block websites related to cryptocurrency trading and fundraising, while Indian regulators announced they would crack down on the misuse of cryptocurrencies, and confirmed they would not be accepted as legal tender.

 

Meanwhile, more western financial institutions are introducing measures to limit risks related to virtual currencies. Lloyds Banking Group, Britain’s largest lender, said it would ban credit card customers from buying cryptocurrencies, following the lead of U.S. banking giants JP Morgan Chase and Citigroup. The bank hopes to prevent customers from running up large debts if and when the price of virtual currencies plummet.

Unregulated cryptocurrencies have become a magnet for hackers, analysts say. Authorities in several countries are reportedly investigating the recent theft of $530 million in NEM cryptocurrency from the Tokyo-based Coincheck. (WSJ, Reuters, Bloomberg)

  HACKERS                                          

Nathan Ruser: The 20-year-old Australian student who exposed how the Strava fitness app revealed the locations of military sites in Syria and beyond said he hoped the intelligence community saw his work as a positive, productive contribution. “I would definitely not like to be a Manning, or a Snowden, or an Assange,” he said. (NYT)


  COURTS                                          


Uber-Waymo: The blockbuster trial between two of Silicon Valley’s most high-profile companies is set to begin today in San Francisco federal court. Waymo alleges that Uber effectively stole its driverless-vehicle design secrets when it bought the autonomous-truck company Otto, which was founded by a former Google engineer. Waymo will seek an injunction to prevent Uber from further developing aspects of its technology and possibly billions in damages. (WSJ)

Russian Hacker: Appearing before a federal judge in Connecticut, Pyotr Levashov, a 37-year-old from St. Petersburg, pleaded not guilty to charges of wire and email fraud, hacking, identity theft, and conspiracy. Prosecutors say Levashov ran the sprawling Kelihos botnet — a network involving up to 100,000 infected computers. (Deutsche Welle)

 
  ON THE HILL                                    

Strava: Congressional Democrats called on the maker of the popular fitness app to explain why it published a “heat map” online that highlighted the locations of sensitive government facilities throughout the world, and what steps the company has taken to secure this data. (WaPo)

 

Equifax: Mick Mulvaney, head of the Consumer Financial Protection Bureau, has reportedly pulled back from a full-scale inquiry of how the credit agency failed to protect the personal data of millions of consumers. Equifax has said it is under investigation by every state attorney general and faces more than 240 class action lawsuits. (Reuters)

DHS: The department has awarded a $620 million contract to Booz Allen Hamilton to develop and implement cybersecurity tools across the U.S. government. (Reuters)


  PRIVATE SECTOR                             

Apple-Cisco: The two U.S. firms have teamed up with German insurer Allianz SE to offer discounts on cyber insurance to businesses that primarily use Apple and Cisco equipment. Cyber insurance has become more popular following massive breaches at large companies like Equifax and Target. (Reuters)

 

RSE Ventures: The venture capital business led by the owner of the Miami Dolphins and developer of New York’s Hudson Yards has made a $30 million investment in Skout Secure Intelligence, a cybersecurity firm. (FT)

YouTube: The video-sharing giant said it’s planning to give users more context for videos promoting conspiracy theories or state-sponsored content. YouTube said its approach was early in development, so it is unclear when it would take effect. (WSJ)


  THE WORLD                                     

Puerto Rico: Dozens of entrepreneurs made wealthy by blockchain and cryptocurrencies are heading en masse to the U.S. territory in the hope of avoiding taxes and building a “crypto utopia.” (NYT)

 

Saudi Arabia: State-owned oil giant Aramco and Google parent Alphabet are in talks about jointly building a large technology hub inside the kingdom. Industry analysts say that Alphabet is chasing both Amazon and Microsoft in the business of renting computing power and storage online, and a joint venture with Aramco would give it a key foothold in Saudi Arabia. (WSJ)

DRC: Blockchain is to be used for the first time to track the journey cobalt takes from small mines in the Democratic Republic of Congo to products used in smartphones and electric cars. The scheme’s designers say it’s intended to ensure that Cobalt is not mined by children. (Reuters)

MUST READS

China’s Surveillance State Should Scare Everyone: “The country is racing to become the first to implement a pervasive system of algorithmic surveillance. Harnessing advances in artificial intelligence and data mining and storage to construct detailed profiles on all citizens, China’s communist party-state is developing a “citizen score” to incentivize “good” behavior. A vast accompanying network of surveillance cameras will constantly monitor citizens’ movements, purportedly to reduce crime and terrorism. While the expanding Orwellian eye may improve “public safety,” it poses a chilling new threat to civil liberties in a country that already has one of the most oppressive and controlling governments in the world,” write Anna Mitchell and Larry Diamond in the Atlantic.

 

‘Crypto Crazy’ Japanese Mystified by Virtual Heist: “For young crypto-traders such as Ms Yamazaki, “to Gox” has entered the vocabulary as the verb for an exchange’s collapse. But for the Japanese authorities, which have led the world in legitimising cryptocurrencies through regulation, it is a horrifying reminder of what financial innovation can cost. A third of the world’s bitcoin exchanges were hacked between 2009 and 2015, say US authorities. Technical and legal advisers to the Japanese government are even blunter about the vulnerabilities. As the Coincheck debacle unfolds, the credibility of the Financial Services Agency hangs in the balance,” write Leo Lewis and Robin Harding in the Financial Times.

Our Hackable Political Future: “It already feels as though we are living in an alternative science-fiction universe where no one agrees on what it true. Just think how much worse it will be when fake news becomes fake video. Democracy assumes that its citizens share the same reality. We’re about to find out whether democracy can be preserved when this assumption no longer holds,” write Henry J. Farrell and Rick Perlstein in the New York Times.

 






 

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