The Stroz Friedberg Cyber Brief

  FEATURED STORY            



In a rare move, President Obama on Friday issued an executive order prohibiting a Chinese investment fund from purchasing the U.S. subsidiary of German semiconductor equipment maker Aixtron because the deal posed a risk to U.S. national security. The order followed an earlier recommendation from the Committee on Foreign Investment in the U.S., or CFIUS, an interagency panel that reviews the security implications of foreign acquisitions of U.S. firms.

Analysts say the president’s decision appeared to be based on concerns about China gaining access to the secrets of producing a material called gallium nitride, which is used in military equipment including radars and lasers. It was only the second time the Obama administration has blocked such a deal, and comes as Chinese companies have spent billions to acquire technology in Europe and the United States. The German government withdrew its approval for the deal in October. (WSJ, FT, Reuters, NYT)


Bangladesh: In an effort to speed the recovery of stolen funds, authorities in the Asian country have agreed to share findings from their investigation into how unidentified hackers pulled off one of the world’s largest bank heists. Hackers transferred $81 million via an account at the New York Federal Reserve to four accounts in the Philippines. (Reuters)


Saudi Arabia: State-sponsored hackers, potentially from Iran, have reportedly conducted destructive cyberattacks on government targets in Saudi Arabia over the last two weeks. Experts say assailants used a version of the malware used to target the Saudi energy sector four years ago. (Bloomberg)

German: German security experts have suggested internet outages that have hit hundreds of thousands of Deutsche Telekom customers were part of a worldwide attempt to hijack routing devices. The company confirmed that around 900,000 customers had their broadband disconnected - about 4.5 percent of its customer base. (DW)


Botnet Ring: The Justice Department announced in a statement the dismantling of a global network of servers used to facilitate cybercrime, known as Avalanche. The ongoing operation reportedly involves agencies in 30 countries. More than 50 Avalanche servers worldwide have been taken offline. (Wired)


  ON THE HILL                                    

WH Commission: A presidential commission on cybersecurity issued its recommendations on Friday and drew particular attention to the threat posed by the “Internet of Things.” Among other things, the panel said the government should accelerate the pace that technology is updated in the federal sector, the president should appoint an international ambassador for cybersecurity, and the United States should pursue global norms of behavior in cyberspace. (WSJ, Reuters)


FBI Hacking: A last-ditch effort in the Senate failed to block controversial rule changes that expand the FBI’s powers to remotely access suspects’ computers. The changes allow federal judges to issue warrants in cases when a suspect uses technology to conceal the location of their computer, or for an investigation into a network of infected computers, such as a botnet. (Reuters)

Intelligence: Director of National Intelligence James Clapper has asked Congress to drop a provision in an annual intelligence bill that would create a special interagency committee to combat Russian propaganda efforts. The panel would duplicate current work and hinder U.S. cooperation with foreign allies, Clapper said. (Reuters)

  PRIVATE SECTOR                             

Apple: The tech giant indicated that it is working on autonomous vehicles, writing a letter to U.S. regulators offering feedback on proposed guidelines for the emerging technology. Apple has reportedly been working on its car effort, code-named Project Titan, for several years, but has never publicly acknowledged it. (WSJ)


Facebook: The social media company is working to automatically flag offensive material in live video streams, building on a growing effort to use artificial intelligence to monitor content. Facebook has historically relied mostly on users to report offensive posts. (Reuters)

Signal: The encrypted messaging app, which has been endorsed by Edward Snowden, has seen a 400% increase in daily downloads since Donald Trump won the U.S. presidency, according to Moxie Marlinspike, the founder of Open Whisper Systems. (Buzzfeed)

  THE WORLD                                     

EU: A former Europol employee reportedly left information on multiple international terrorism investigations online, unguarded by any password. The European policy agency could not immediately be reached for comment. (Reuters)


Foreign Investment and U.S. National Security: “The United States is both the world’s largest foreign direct investor and the largest beneficiary of foreign direct investment (FDI). But like every sovereign country, it has sought to temper its embrace of open markets with the protection of its national security interests. Achieving this balance, which has shifted over time, has meant placing certain limitations on overseas investment in strategically sensitive sectors of the U.S. economy,” write Jonathan Masters and James McBride for the Council on Foreign Relations.


The Propaganda About Russian Propaganda: “To PropOrNot, simply exhibiting a pattern of beliefs outside the political mainstream is enough to risk being labelled a Russian propagandist. Indeed, the list of 'propaganda outlets' has included respected left-leaning publications like CounterPunch and Truthdig, as well as the right-wing behemoth Drudge Report. The list is so broad that it can reveal absolutely nothing about the structure or pervasiveness of Russian propaganda,” writes Adrian Chen in the New Yorker.

Winkelvoss Twins See Bitcoin as Better Than Gold: “What truly sold them was the notion that bitcoin and its underlying blockchain technology could be a potential investment alternative to the precious metals that humans have used to store value for millennia. “Our basic thesis for bitcoin is that it is better than gold,” says Tyler, explaining that when compared with the nine foundational traits that make gold valuable, such as scarcity, durability and portability, “bitcoin matches or beats gold across the board,” writes Aaron Stanley in the Financial Times.


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