By Tom Allen October 9, 2017
Malicious code can go undetected, pushing up cloud prices
The processing power required for digital currency mining is being offloaded to unknowing website visitors
Multiple legitimate websites have been hacked to leech processing power from visitors’ computers, using them to mine cryptocurrencies.
Hackers have installed malicious code on sites belonging to schools, charities, file-sharing services and even CBS, according to scans.
Mining, in this sense, refers to the process of creating units of a digital currency like Bitcoin. The mining computers collect pending transactions (a block) and collate them into a coded puzzle. The first miner to find the solution announces it, and those transactions are validated and added to the blockchain. The miner then receives some currency as a reward.
Because only the first to solve the puzzle gets the prize, miners tend to use very powerful computers – or, in this case, a widely-distributed network.
“There’s a huge attraction of being able to use other people’s devices in a massively distributed fashion, because you then effectively take advantage of a huge amount of computing resources,” Rik Ferguson, VP of security research at Trend Micro, told the BBC.
More at: Cloud at risk from cryptocurrency miners – Computing
By Roy Keidar and Netanella Trreistman, Yagal Arnon and Co. October 8, 2017
An Israeli District Court recently ruled that Israeli banks are not obligated to provide financial services to companies whose primary business is trading in cryptocurrencies, such as Bitcoin or Ethereum. The Court reasoned that banks should not have to assume the risks associated with providing a financial platform to these digital currency businesses when the leading Israeli authorities on the subject, namely the Central Bank, the Securities Authority, and the Anti-Money Laundering and Terror Financing Authority, themselves have been struggling to delineate clear measures to minimize them.
One of the primary risks Israeli authorities and other regulators around the globe noted is the pseudo-anonymous nature of cryptocurrency holdings. Regulators view the digital token transfer method as a “black box”, low in accountability and virtually impossible to subject to existing anti-money laundering (AML) and anti-terror financing regulations. However, built-in features of cryptocurrencies, specifically their underlying blockchain technology, have the potential to improve, not harm, AML efforts, even surpassing mechanisms already in place today.
More at: How blockchain could end, instead of enable, money laundering – VentureBeat
By David Balaban October 5, 2017
Bitcoin is just the first app we are using when dealing with the Blockchain. Soon we will see more ways people can squeeze the most out of Blockchain.
Back in the 90s when the Internet was first becoming profit-oriented, no one would possibly have imagined that the Internet would breed Facebook, Google, Uber, online streaming, etc. This is where we are with the Blockchain now. There exists a whole world of opportunities out there.
In order to realize that potential, it’s critical that law enforcement has the ability to chase down the individuals who use the Blockchain for unrighteous things. We need to craft a Blockchain that is secure for legal commerce and is advantageous to everybody except for criminals.
Law enforcement agencies have a lengthy history of changing their procedures to pursue criminals who make use of the latest technology to commit crimes. The law has always found a way to evolve to address new tech challenges. There is no reason to expect that law enforcement won’t be able to get a handle on Blockchain.
With Blockchain still being in the embryonic stage, we have the opportunity to make it much easier for law enforcement to understand. At the same time, we need to implement improvements to make the Blockchain safer for commerce while making it harder for criminals to use.
More at: How Law Enforcement Can Investigate Bitcoin Related Crimes And Why That’s Good – The Cointelegraph
By Michael Kimani October 4, 2017
A Greek court ruled in favor of the United States for extradition of Russian Alexander Vinnik suspected of laundering proceeds from a billion dollar exchange heist.
A Greek court ruled in favor of the United States on Wednesday in an extradition case involving a Russian suspected of laundering proceeds from a billion dollar exchange heist.
38-year-old computer programmer Alexandr Vinnik is also wanted by the Russian Government in Moscow for lesser charges. The Russian stands accused of identity theft, public corruption drug trafficking and laundering proceeds of cybercrime through Btc-e – a cryptocurrency exchange – since 2011. He is one of seven Russians apprehended by the United States on cyber crime-related charges.
Vinnik is also charged with crimes linked to the collapse of Japanese exchange Mt. Gox from 2011 to 2014. He aided in laundering funds stolen from exchange accounts from September 2011 to September 2014. Cryptocurrency exchanges Bitstamp, Btc-e and Trading hill, were used to clean up his trail. The virtual funds were then converted mostly to American dollars and Russian rubles and funneled out via shell companies.
The cryptocurrency community has always suspected Btc-e of dubious operations.
Thanks to Bitcoin’s often misunderstood anonymity, WizSec, A group of bitcoin security specialists were able to follow his trail from Mt. Gox servers. The result of their investigations led to his arrest in late July at a beachside in northern Greece. Wizsec traced clustered addresses on the bitcoin transparent blockchain.
More at: Mt. Gox Hack Suspect Faces 55 Year Imprisonment After US Extradition – Cryptovest
Money laundering has always been a problem even before the time of Bitcoin, however, BlackRock’s CEO, Larry Fink has taken an interesting assessment of what Bitcoin can do.
The investment management corporation head thinks there is merit in Bitcoin, however he sees its rapid rise as an indicator that may help to identify the extent of money laundering happening across the globe.
A tool of vice
Bitcoin, while not to be blamed, has become a tool of money laundering, and that for Fink is indicative as to how much money laundering is going on globally.
The rapid ascent of cryptocurrencies “identifies how much money laundering there is being done in the world,” Fink said.
Bitcoin, as well as other even more anonymous coins like Monero and Zcash, are being employed for online gambling, tax evasion, and money laundering, has been one of the biggest criticisms of cryptos, which are viewed as a shadowy, mostly unregulated sector.
However, while these cryptocurrencies are approaching the mainstream, coming into the light, and being accepted by people like Fink, it does not detract from the fact that they can be used for laundering money.
More at: Bitcoin Gives Window into Rampant Money Laundering – The Cointelegraph
Global accounting firm Deloitte, one of the biggest blockchain and security consultants in the world, has suffered a hack that compromised sensitive information, including health records.
The UK newspaper The Guardian was the first to report the security intrusion at the billion-dollar firm, which is heavily into intial coin offerings and blockchain development for some of the world’s largest banks, pharmaceutical companies and other multinational firms. Some US government information may also have been compromised, the Guardian reported. Deloitte is headquartered in New York.
Deloitte is still reviewing the extent of the damage, but has notified at least six clients. The hack was discovered in March, but may have been initiated as far back as October, 2016. The hack occurred through an administrator account that allowed access to all areas of the Deloitte database, including emails, usernames, passwords, IP addresses, architectural diagrams for businesses, and health information.
Responding to questions from the Guardian, Deloitte confirmed it had been the victim of a hack but insisted only a small number of its clients had been “impacted.” The firm declined to elaborate further, but noted, “In response to a cyber incident, Deloitte implemented its comprehensive security protocol and began an intensive and thorough review including mobilizing a team of cybersecurity and confidentiality experts inside and outside of Deloitte,” a spokesman said.
One security expert noted the long gap between discovery and disclosure. “Knowing and disclosing are two different things,” said Roderick Jones, the head of the Rubica security firm. “The rules around when cyber breaches have to be disclosed are still forming in the USA and remain a patchwork of state rules giving companies significant leeway in when they report incidents have occurred.”
The US government is going after a New York man for allegedly operating a bitcoin Ponzi scheme.
The US Commodity Futures Trading Commission said Nicholas Gelfman, a Brooklyn resident and head trader at Gelfman Blueprint, a New York-based firm, “fraudulently solicited” $600,000 from 80 clients in a bitcoin Ponzi scheme.
Investors, according to a release from the CFTC Thursday, gave money to Gelfman “for placement in a pooled commodity fund that purportedly employed a high-frequency, algorithmic trading strategy, executed by Defendants’ computer trading program called “Jigsaw.”
“In fact, as charged in the CFTC Complaint, the strategy was fake, the purported performance reports were false, and — as in all Ponzi schemes — payouts of supposed profits to GBI Customers in actuality consisted of other customers’ misappropriated funds,” the CFTC said.
Gelfman covered up the scheme by “staging” a hack.
More at: A trader is being accused of running a bitcoin Ponzi scheme – Business Insider