The Stroz Friedberg Cyber Brief

  FEATURED STORY            

MONDAY, JULY 24, 2017


The U.S. Justice Department announced on Thursday that it had seized the digital infrastructure of AlphaBay, reportedly “the largest criminal marketplace on the internet,” in an international operation that involved law enforcement agents from more than a half dozen countries.


AlphaBay allegedly sold narcotics, firearms, hacking tools, toxic substances, and other illicit goods to thousands of anonymous users. The site was reportedly averaging between $600,000 and $800,000 in sales a day. The mastermind behind the dark web bazaar, Alexandre Cazes, a Canadian citizen, was arrested in Thailand on July 5 but reportedly took his own life while in custody days later.

In a separate operation, Dutch authorities seized control of Hansa Market, another popular dark website. Police arrested two German men in connection with the site and seized approximately $2.6 million in digital currency. (WSJ, FT, Reuters)


Kaspersky Lab: Local and state governments around the United States continue to operate security software made by the Moscow-based company despite the federal government’s instructions to its own agencies not to use it over concerns about cyberespionage. (WaPo)


Internet of Things: Researchers at Senrio discovered a cybersecurity flaw, dubbed "Devil's Ivy," that may allow attackers to fully disable or take over thousands of models of internet-connected devices from security cameras to sensors to access-card readers. (Wired)

Fake News: A new report from the University of Oxford says that more than two dozen governments around the world are enlisting "cyber troops" who manipulate Facebook, Twitter, and other social media outlets to influence public opinion and spread misinformation. (Bloomberg)


Click Fraud: The first “click fraud” case in the United States to go to trial will begin today in Brooklyn federal court. Fabio Gasperini, a 34-year-old Italian living in Rome, allegedly directed a global botnet to defraud advertising companies by getting payment for fake clicks on online ads. He was arrested in Amsterdam last year and then extradited to the U.S. (WSJ)

  ON THE HILL                                    

State Dept.: The Trump administration is expected to downgrade the State Department’s cybersecurity branch, placing it under the umbrella of the economic bureau. Critics say the move sends the wrong message that cybersecurity is a business matter, rather than integral to national and international stability. (Wired)


Russia Sanctions: President Trump is reportedly willing to sign legislation ratcheting up sanctions on Russia for its 2014 annexation of Crimea and for meddling in the 2016 presidential election. The news comes after leaders in the Republican-controlled Congress reached agreement on a bill late last week. Notably, the bill would require the president to submit to Congress a report on proposed actions that would "significantly alter" U.S. policy toward Russia. (Reuters)

Laptop Ban: The Department of Homeland Security confirmed that passengers flying into the United States from airports in 10 Muslim-majority countries affected by the ban may now take their laptops and other large electronic devices into the cabin with them. The ban, which had been in place since March, was lifted after airlines and airports demonstrated compliance with the initial phase of the new Homeland Security standards. (NYT)

  PRIVATE SECTOR                             

IBM: The computing giant says that advances in both hardware and software will allow its IBM Z mainframe to provide encryption at a much larger scale: 12 billion encrypted transactions per day. (Wired)


BlackBerry: The Canadian company said it has been approved by the National Security Agency and won the right to sell tools for encrypting phone calls and text messages to the U.S. federal government. (Reuters)

Apple: The iPhone maker says it will begin storing all cloud data for its China customers with a government-owned company, which analysts say means relinquishing some control over its Chinese data. Under the agreement, Apple will retain control over encryption keys at the data center. (WSJ)

  THE WORLD                                     

Germany: More than half the companies in Germany have been hit by industrial espionage, sabotage, or data theft in the last two years, the German IT industry association Bitkom said. Notably, some 62 percent of companies affected found those behind the attacks were either current or former employees. (Reuters)

China: Government authorities are reportedly looking to upgrade the Great Firewall by asking telecom companies to close down virtual private networks (VPNs) and other bypass software. New regulations make telecoms providers and other internet service providers liable for filtering and blocking unlawful network tools. (Reuters)


Russia’s Test Lab for Cyberwar: “In Ukraine, the quintessential cyberwar scenario has come to life. Twice. On separate occasions, invisible saboteurs have turned off the electricity to hundreds of thousands of people. Each blackout lasted a matter of hours, only as long as it took for scrambling engineers to manually switch the power on again. But as proofs of concept, the attacks set a new precedent: In Russia’s shadow, the decades-old nightmare of hackers stopping the gears of modern society has become a reality,” writes Andy Greenberg in Wired.


Silicon Valley Giants Confront New Walls in China: “This summer of challenge for [Facebook, Microsoft, and Apple] offers a broad illustration of just how varied the obstacles have become for foreign companies in China. They also show in stark terms why this vast market has been frustratingly difficult for outsiders,” write Paul Mozur and Carolyn Zhang in the New York Times.

Five Ways to Interfere in U.S. Elections: “Russia’s apparent interference in the U.S. presidential election is a big story, but it’s part of an even bigger one: the ease with which foreign actors can insert themselves into the democratic process these days, and the difficulty of determining how to minimize that meddling,” writes Uri Friedman in the Atlantic.



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