The Stroz Friedberg Cyber Brief

  FEATURED STORY            



President Donald Trump is expected today to open a trade investigation into China’s efforts to acquire U.S intellectual property. The inquiry, which experts say could take a year or more, will examine whether Chinese agencies and businesses have either stolen patents and licenses from U.S. firms outright, or unduly pressured U.S. companies to hand this property over as the price of entry into the Chinese market. U.S. Trade Representative Robert Lighthizer will conduct an investigation under section 301 of the 1974 Trade Act, which allows the president to unilaterally impose tariffs or other trade restrictions to protect U.S. industries.


A Chinese state newspaper warned that President Trump "could trigger a trade war" if he goes ahead with the investigation. Previous U.S. actions directed at China under the 1974 law had little effect, said the China Daily.

Analysts note that there were hundreds of section 301 investigations in the 1970s and 1980s, but the policy tool was largely set aside after the World Trade Organization brought into effect a binding dispute system, largely at the prompting of the United States. (WSJ, BBC, CBS, Guardian)


Digital Currency: Fidelity Investments has started allowing clients to use its website to view their holdings of bitcoin and other cryptocurrencies held through digital wallet provider Coinbase. Most established financial firms have thus far shied away from associating themselves with bitcoin and cryptocurrencies. (Reuters)


Hotels: Hackers linked to Russian military intelligence were likely behind a campaign attempting to steal passwords and other information from hotel guests in eight mostly European countries last month, researchers at security firm FireEye said on Friday. (Reuters)


HBO: The unknown individual(s) behind the data breach at the media company has published several episodes of Curb Your Enthusiasm, the new season of which isn't due to air until October. Episodes from other HBO series have also been made available online. (Wired)

Election: Russian hackers allegedly breached electronic systems--known as poll books--used in the U.S. presidential election last fall in North Carolina, a key battleground state. When people come in to vote, staffers use the system to confirm they are properly registered and record that they've cast their ballots. (NPR)


Iran Hackers: Federal prosecutors in South Carolina indicted two Iranian nationals with aggravated identity theft, wire fraud, criminal conspiracy, and other charges related to computer hacking. The two men--Arash Amiri Abedian and Danial Jeloudar--allegedly used the stolen information to purchase goods and services between 2011 to 2016. (Dark Reading)

Lithuanian Fraudster: Lithuania's top appeals court upheld a decision to extradite to the United States a Lithuanian man accused of scamming Facebook and Google out of more than $100 million. Evaldas Rimasauskas and his accomplices posed as suppliers to both U.S. companies and convinced them to transfer the money. (Reuters)


Silicon Valley: Defense Secretary Jim Mattis said an Obama-era experimental defense outpost in Mountain View, CA, would grow in importance under the Trump administration. The Pentagon's Defense Innovation Experimental Unit, or DIUx, serves as a hub for attracting private-sector assistance in solving complex and technical military challenges. (Reuters)

Army: The Army Aviation Directorate is enforcing new orders banning drones from a Chinese maker “due to increased awareness of cyber vulnerabilities associated with DJI products.” (Wired)

  PRIVATE SECTOR                             

Facebook: The social media company released a photo-sharing app, called Colorful Balloons, in China that’s very similar to its Facebook’s Moments app. It was released through a separate local company and without any hint that Facebook is affiliated with it. Facebook has been banned in China for years, and experts say the stealthy and anonymous release of an app by a major foreign technology company in China is unprecedented. (NYT)

Auto Data: Toyota, Intel, and other technology and auto companies are forming a consortium to create an ecosystem for big data used in connected cars. The group aims to use data to support emerging services such as intelligent driving, creating maps with real-time data and driving assistance based on cloud computing. (Reuters)

  THE WORLD                                     

China: Chinese scientists have sent the first quantum transmission from earth to an orbiting satellite, marking another critical step in the creation of an “unhackable” global communications network. Before China’s successful experiments, including a transmission from space to earth in June, the longest distance travelled by a quantum communication had been 143km. (FT)

Ukraine: Unknown hackers carried out a distributed denial-of-service attack on Ukraine’s postal service for two days. The hack follows a wider national attack in June on Ukrainian banks, the state power provider, television stations and public transport services. (BBC)


The Dangers of the Digital Home: “Through our social media, sat navs and all the rest, we have already willingly given up our locations, our interests, our likes and desires to the shady figures on the other side of the screen. Yet a new generation of interconnected things, probably coordinated by a voice-recognition operating system (OS), means that we are now giving up everything,” writes Edwin Heathcote in the Financial Times.


How to Prevent a Cyber War: “Cyberweapons won’t go away and their spread can’t be controlled. Instead, as we’ve done for other destructive technologies, the world needs to establish a set of principles to determine the proper conduct of governments regarding cyberconflict,” writes Jared Cohen in the New York Times.

A Guide to Russia’s Democracy Subversion Tools: “Russia’s active-measures playbook, according to public and private-sector investigators, dates back to Czarist Russia and the beginning of the Soviet Union. It has been honed and deployed over decades to advance Russian interests both at home and abroad—and has long been driven by a consistent geopolitical worldview, executed in distinct ways, and guided by a unique tradecraft philosophy at odds with the approach of Western intelligence services,” writes Garrett M. Graff in Wired.


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