The Stroz Friedberg Cyber Brief

  FEATURED STORY            

MONDAY, JULY 31, 2017


A Russian national, Alexander Vinnik, was arrested in a beachside village in northern Greece early last week for allegedly running a Bitcoin exchange that helped international criminals launder more than $4 billion. A U.S. federal indictment unsealed in California provided a list of illegal activities that the Bitcoin exchange facilitated, including ransomware fraud, identity theft, and drug trafficking.


Criminals who stole or extorted Bitcoin from their victims allegedly transferred them to Vinnik’s exchange, which would then convert them into conventional currency using bank accounts registered under shell companies.

Vinnik’s arrest is the latest in a series of U.S. operations against Russian cyber criminals in Europe. Last week, the U.S. Justice Department moved to shut down the dark web marketplace AlphaBay. “The arrest of Alexander Vinnik is the result of a multi-national effort and clearly displays the benefits of global cooperation among US and international law enforcement,” said FBI Special Agent in Charge Hess. (DOJ, Reuters, NYT, AP, Guardian)


Merck: The drugmaker said it suffered a worldwide disruption of operations when it was the target of an international cyberattack in June. The incident forced Merck to halt production of its drugs, which will hurt its profits for the rest of the year, the company said. (Reuters)


UK Hacker: A German court sentenced a British hacker known as “Spiderman” to one year and eight months for a cyberattack last November that temporarily took down Internet access for nearly 1 million German consumers. The 29-year-old also faces charges in Britain. (Reuters)

Cyberphysical Hacks: In a talk at the Black Hat security conference last week, a Honeywell security researcher showed how hackers can manipulate valve pressure and create actual bubbles that disable industrial pumps. (Wired)

  ON THE HILL                                    

U.S.-Japan: The Department of Homeland Security will help the Japanese government with cybersecurity at the 2020 Olympic Games in Tokyo, according to a joint statement. This was the two allies’ final joint dialogue with outgoing State Department Cybersecurity Coordinator Chris Painter at the helm. (Nextgov)


Digital Privacy: The Electronic Privacy Information Center is asking the Federal Trade Commission to investigate a new Google advertising program--Store Sales Measurement--that ties consumers’ online behavior to their purchases in brick-and-mortar locations. EPIC claims Google is not revealing how they get the information or giving consumers meaningful ways to opt out. (WaPo)

Kaspersky Lab: The U.S. House of Representatives Committee on Science, Space, and Technology has asked nearly two dozen federal agencies to share documents on the Moscow-based cybersecurity firm, saying its products could be used to carry out "nefarious activities against the United States.” (Reuters)

  PRIVATE SECTOR                             

Apple: The iPhone maker has reportedly removed all major virtual-private-network apps from its App Store in China. VPNs help internet users overcome the country’s censorship system. Analysts say the removals signal a new push by China to control the internet. (NYT)


Biohax: More than 50 out of 80 employees at a Wisconsin company are electing to have a microchip implanted in their hand that will allow them to swipe into their office building, pay for food in the cafeteria, and perform other digital activities. The chips are made by Swedish firm Biohax International. (NYT)

Callsign: Founded in 2012, the startup that has developed technology to help users access websites more securely has raised $35 million from investors. (Reuters)

  THE WORLD                                     

Sweden: Two senior Swedish ministers have resigned as the Swedish government moves to limit the political fallout from one of the largest security breaches in the country’s history. Analysts say the massive leak of sensitive data on Swedish citizens highlights how policymakers often fail to implement the most basic cybersecurity measures. (Politico)

North Korea: North Korea’s army of hackers has reportedly splintered into multiple groups and is unleashing attacks increasingly focused on stealing money. Analysts say the shift indicates how North Korea’s costly nuclear-missile program has accelerated its need for cash. (WSJ)


Hacking Wars Are Going to Get Worse: “It’s only a matter of time before a state’s response to a cyberattack escalates into full-blown military conflict. Cyberattacks that embarrass or threaten the legitimacy of weak leaders, for example, could cause them to overreact — or worse to unleash a war to create a diversion. Big and small countries alike should want to make sure that hacking attacks do not lead to war. But there is little hope that competing states will ever be able to agree on how to define, much less limit, information operations,” writes Adam Segal in the New York Times.


Tech’s Most Dubious Promises, From Elon Musk to Bill Gates: “In most industries, unachievable promises are a sign of bad leadership. But in tech, where companies are built on impossible ideas, unreasonable pledges are just a part of doing business. It’s even written into the Valley's unofficial motto: Fail fast, fail often,” writes Ricki Harris in Wired.

China’s Next Target: U.S. Microchip Hegemony: “The U.S. views China as its biggest semiconductor challenge since Japan in the late 1980s. The U.S. triumphed then through trade sanctions and technological advances. Japanese firms couldn’t match U.S. microprocessor technology, which powered the personal computer revolution, and fell behind South Korea in low-margin memory chips. China has advantages Japan didn’t,” writes Bob Davis and Eva Dou in the Wall Street Journal.



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