Ransomware is getting nastier and nastier. Initially just an attempt to turn malicious software (malware) into something that is financially rewarding, ransomware works by encrypting your files and asking that you pay them (normally in bitcoins) in order to get the keys required to unencrypt the files. The latest one looks to make it even harder for you to bypass it by deleting master boot records on infected computers.
Named Petya, the new ransomware overwrites master boot records of affected PC’s meaning that your computer, next time it’s turned on, doesn’t even know where to go find our operating system, resulting in a computer that can’t even find the OS, let alone load it. Trend Micro report that the email seems to be hidden in emails that are advertising themselves as a job advert, with an email linking to a dropbox folder. Within the folder is a self-extracting archive, apparently the applicants CV and photo only once extracted the ransomware is installed.
The system is then tricked into a critical error, resulting in everyone’s favourite blue screen of death. During reboot the false master boot record (MBR) that was put in place by Petya will encrypt the master file table, this is the record of every file, location and where and how to get it to it on your system. By encrypting this file, you don’t need to go near the actual files, as any operating system will be unable to find the files. Encrypting one file instead of hundreds reduces the speed, meaning that people are often left with no choice but to pay the 0.99BTC (£296 roughly) fee that they request.
With ransomware getting even more aggressive in its tactics, it’s all that more important to ensure you check emails because you receive them and keep your anti-virus and anti-malware software up to date.
Just over a year on from its introduction, Microsoft has quietly pulled Bitcoin support from the Microsoft Store. While the company has not made an official statement regarding the news, nor has it explained why it took the decision, the Windows Store no longer supports the cryptocurrency for Windows 10 and Windows 10 Mobile purchases.
“Microsoft Store doesn’t accept Bitcoin,” an update to the Windows Store FAQ reads. “You can no longer redeem Bitcoin into your Microsoft account. Existing balances in your account will still be available for purchases from Microsoft Store, but can’t be refunded.”
The move marks an unexpected U-turn for the company which, when it introduced Bitcoin support to its store at the end of 2014, proclaimed the digital currency as a growing market.
“For us, this is about giving people options and helping them do more on their devices and in the cloud,” Eric Lockard, Corporate Vice President of Universal Store at Microsoft, said (courtesy of a cached Microsoft blog post, seemingly now deleted). “The use of digital currencies such as Bitcoin, while not yet mainstream, is growing beyond the early enthusiasts. We expect this growth to continue and allowing people to use Bitcoin to purchase our products and services now allows us to be at the front edge of that trend.”
The Bitcoin exchange portal Bitstamp warned users over the weekend that a Google Chrome browser extension had been caught stealing Bitcoin and users should avoid the BitscoinWisdom Ads Remover extension that at the time still was available in the Play store. The good news is that Google since banned the app from the store, but you’ll probably still need to remove it from your browser yourself if you were a user of this extension.
The Chrome extension was caught stealing Bitcoin when users made transfers. The extensions malicious code would redirect payments made to their own Bitcoin address instead of the intended target without the user noticing anything until it was too late. What Bitstamp discovered was later confirmed by Bitcoin app developer Devon Weller.
@bitstamp Confirmed. I looked at the source code. It replaces QR code images on bitcoin exchanges with its own addresses.
The method used to steal your Bitcoin is essentially very easy. Bitcoin addresses, sometimes referred to as wallets, use a very long string in order to identify themselves. That’s something that is both hard to remember and difficult to enter. After all, it’s about money and you wouldn’t want to send that to the wrong destination. QR codes can solve this with ease as you’ll just have to scan a code presented with your smartphone that contains a Bitcoin app and you’re good to go. This is what the malicious browser extension took advantage of by simply replacing displayed Bitcoin QR codes with their own in the displayed website.
On further investigation, Devon Weller discovered that the code only targeted users of the Bitstamp, BTC-E, and Hashnest Bitcoin services.
This isn’t the first time that the same extension has been caught doing so. Back in July last year, Reddit users reported similar issues with the same extension. We can only hope that it is gone for good now. This also shows that you should be very careful what browser extensions you install, they might do more harm than good.
Viruses and malware are issues for the best of us, from forgetting to scan your computer once to being baited in by that interesting link in an email, there are many ways for your system to get infected. Ransomware is one of the nastier pieces of malware, denying you access to your system until you pay the creator of the virus. While the FBI recommend you pay up, does this still apply when you are a hospital?
President and CEO Allen Stefanek claims that the initial price tag of $3.6 million was false and that paying this fee was the “quickest and most efficient way to restore our systems and administrative functions”.
Even with backups and anti-virus software, there will always be some viruses that are able to get into systems, with ransomware benefiting the creators we don’t expect this to be the last time that we see it hitting public services.
The message we are often told is that no one is above the law. This became all too apparent last year when a secret service agent was caught stealing money in the Silk Road case. Shaun Bridges, the aforementioned agent, has now been re-arrested after looking to leave the country.
Silk Road was an online drug marketplace, where people could buy and sell drugs without any legal oversight or regulation. The case saw worldwide media attention, only expanding when it became apparent that one of the agents involved in the case had stolen bitcoins worth around $800,000. The former agent was scheduled to turn himself in on Friday to begin 71 months in a minimum-security prison; Imagine their surprise then when he was arrested at his home in possession of a bag containing passports, corporate records for three offshore accounts and even bulletproof vests.
Something tells me that the judge won’t be so lenient on Bridges now, with everything pointing towards him leaving the country and attempting to avoid his sentence. Seems a little weird though packing a bullet proof vest if you just wanted to leave the country?
Popular cryptocurrency exchange Cryptsy is on the verge of bankruptcy after the startup admitted that it had fallen victim to an online heist in July 2014, during which a total of $9.58 million-worth of Bitcoins and Litecoins. The company has been left with outstanding liabilities of around 10,000BTC – approximately $4.15 million – which, if not met, could result in the business winding up.
“About a year and a half ago,” a blog post from Cryptsy reads, “we were alerted in the early AM of a reduction in our safe/cold wallet balances of Bitcoin and Litecoin, as well as a couple other smaller cryptocurrencies.”
“After a period of time of investigation it was found that the developer of Lucky7Coin had placed an IRC backdoor into the code of wallet, which allowed it to act as a sort of a Trojan, or command and control unit,” the post continues. “This Trojan had likely been there for months before it was able to collect enough information to perform the attack.”
The Trojan was able to steal around 13,000BTC ($7.5 million, based on the exchange rate at the time) and 300,000LTC ($2.08 million).
Cryptsy says that it did not disclose the theft at the time as it believed that it had enough cyptocurrencies in its reserve to make up the shortfall, supplementing that with its own profits. The site, though, has now failed to meet its outstanding liabilities. Unless Cryptsy can recover the stolen funds or can find a buyer to cover the shortfall, the company is set to declare itself insolvent.
The Australian Securities Market (ASX) is preparing to debut the Bitcoin Group on the public market under the symbol BCG. This is seen as a potentially billion dollar opportunity by Bitcoin Group, with at least $20 million expected to be gained from the initial sale of 100 million shares at $0.20 each on February 9th.
The Melbourne-based bitcoin mining company currently operates around 6000 “mining” rigs worldwide, split across 12 mining centres. Less than 2% of the companies mining power is concentrated in Australia, with the majority of the power coming from their 5 Chinese mining centres. The majority of the funds raised by the sale of shares is planned to be put directly into increasing the firm’s hashing power.
The CEO of Bitcoin Group, Sam Lee hopes that the floating of his firm on the Securities Market will help to increase the acceptance of the Bitcoin cryptocurrency worldwide and to increase the number of investors in the technology. “It’s about giving ourselves and the industry accountability and legitimacy; people often doubt whether our industry is ‘real’ as bitcoin has been declared dead many times over,” Lee said. “Unlike private companies, however, listed companies have a higher level of compliance; audited numbers will assist us in educating people interested in our industry with facts, not fiction.” He believes that when backed with legitimacy, Bitcoin’s ability to be converted to any worldwide currency and reusability will solidify the crypto-currency as a legitimate monetary platform.
Bitcoin’s emerging acceptance of Bitcoin is only the start of worldwide acceptance of the technology, with some US financial commissions taking the digital currency under their jurisdiction. Additionally, the US Securities Exchange Commission will be allowing companies to issue shares using the blockchain technology, similarly to ASX selling shares of BCG. ASX itself is also reported to be looking to convert their current settlement and clearing system to Bitcoin blockchain technology, with the switchover expected to be complete before the end of the year.
The real inventors of notorious cryptocurrency Bitcoin could be an Australian entrepreneur and his dead friend, separate investigations by Gizmodo and Wired have revealed. Both Gizmodo and Wired have obtained evidence that point towards Sydney businessman Craig Steven Wright and his friend, computer forensics expert Dave Kleiman, who died in 2013, as the developers of Bitcoin, previously attributed to the pseudonym Satoshi Nakamoto since the currency’s inception in 2009.
The investigation began in November this year, when Gizmodo received an anonymous tip that read, “I hacked Satoshi Naklamoto [sic]. These files are all from his business account. The person is Dr Craig Wright.” Attached were a series of incriminating e-mails from Wright’s Hotmail account. Gizmodo’s subsequent month-long investigation into the true identity of Satoshi Nakamoto culminated in the website getting on-the-record confirmation from a number of sources that Wright has, on at least two occasions, claimed that he and Kleiman created Bitcoin.
At the same time, Wired obtained a cache of e-mails, transcripts, and accounting forms, dating as far back as 2008, leaked by a source close to Wright via dark web analyst Gwern Branwen. One such document shows Wright planning the creation of “a P2P distributed ledger”, which is an accurate summary of what was to become Bitcoin.
Since these revelations, The Guardian is reporting that Wright has been arrested, and his Sydney home has been raided by police. 10 police officers entered Wright’s residence at around 13:30GMT today, arrested Wright, and preceded to search the property. However, Australian authorities deny that Wright’s arrest is due to any potential association with Bitcoin.
“The AFP can confirm it has conducted search warrants to assist the Australian Taxation Office at a residence in Gordon and a business premises in Ryde, Sydney,” a statement from the Australian Federal police reads. “This matter is unrelated to recent media reporting regarding the digital currency bitcoin.”
You should never pirate games or software in general, that is something that we all know. There are those who can’t resist that temptation now and the, but it can end very badly and end up costing you a lot more than just purchasing the game straight away. That was a lesson that was learned by Redditor arkanoah as he discovered that 4.88 BitCoin went missing from his wallet.
He took his problem to Reddit in order to try to figure out where his missing BitCoin were and how they got missing. Other Redditors were quick to notice the time of disappearance, November 11th, which coincides with the time that Fallout 4 was released. Asking the question if he had pirated that or another game was answered with yes and that’s most likely the way his BitCoin were stolen.
Cracked software is risky to download as it often contains malware in one form or another and it is the most likely scenario that this is the way that the 4.88 BitCoin went missing. The user originally scanned his download with antivirus software and later the system with Malwarebytes and GMER which both returned zero infections. So whether the attacker cleaned his tracks after downloading and cracking arkanoah’s BitCoin wallet or the mechanism used is so sophisticated that it isn’t being detected is up to everyone’s own guess, we most likely won’t find out. It is however most likely that the perpetrator cleaned his tracks before leaving the victim’s computer.
At the time, the 4.88 BitCoin were worth $1773, quite a bit more than the game would have cost him on Steam or other platforms. Lesson learned, I hope.
In a document obtained by Reuters, the EU‘s executive arm, the European Commission, outlines plans to “strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by prepaid cards.” But, as The Washington Post adds, so far there is no concrete evidence that the terrorists responsible used any kind of encrypted system to support its activities, and that the EU itself is still investigating whether cryptocurrencies were involved in funding those responsible.
Ben Bernanke, the former head of the US Federal Reserve, has also raised concerns over Bitcoin’s function. “The real serious problem that [Bitcoin] has is it’s anonymity,” Bernanke told Quartz, “which is a feature, and is also a bug, in that it has become in some cases a vehicle for illicit transactions, drug selling or terrorist financing or whatever. And you know, governments are not happy to let that activity happen, so I suspect that there will be oversight of transactions done in bitcoin or similar currencies and that will reduce the appeal.”
At the EU summit, taking place today, Members of European Parliament will also discuss plans “to curb more effectively the illicit trade in cultural goods.”
Yesterday, UK based e-tailers were the apparent victims of a DDoS attack that took Aria Technology, Novatech, and Scan Computers websites offline. Channelweb reported that Aria Taheri, the owner of Aria Technology said that after the business’s website was down for a few hours in the afternoon they received an email demanding a payment of 16.66 Bitcoins (£2,871.43). In the email, it stated that if they did not pay up that the culprits would try to take down the site for the entire Wednesday. Taheri also said that he understands that the problems being experienced by the companies are from the same DDoS attack, and that the other companies had received ransom emails as well.
Elan Raja III, the director of Scan said, “Scan are aware there has been some disruption in traffic and is investigating the cause”. Interestingly enough, today if you are trying to connect to Scan’s website you will notice that it is now protected by CloudFlare DDoS protection.
Back in February 2013 Aria website was hacked but they caught the people responsible by putting up a reward. Now they are hoping that the tactic will work again and are posting up a £15,000 bounty. So if you know who did the attack it is your time to cash in. The day that the culprits are threatening to attack Aria is their “prime day” where low prices normally drive a lot of business on its site. There will be no ransom paid as that will be sending the wrong message to nefarious parties.
Taheri went on to say, “These kinds of attacks are only designed to affect our website and make it inaccessible. However, [our customers’] information is 100 percent secure as we are PCI DSS compliant which is quite a strict web-security protocol. Also, the website unavailability will last for only a short period – a matter of hours – so the customers can always come back at a later time. We are not going to encourage more of these hackers by giving them Bitcoins, because that would only encourage others to come to us and blackmail us more. The message to the hackers is that I will spend a significant amount of money to bring them to justice. Our track record shows that we have done that before, and based on that track record I am fairly confident we can do that [again].”
We are experiencing some technical issues with our website, our team are are working to ensure any disruption is kept to a minimum.
Hacking has been big news in recent years, with everyone from Sony to Apple having breaches and personal information released. The latest in this long stream of hacks is a website titled Ashley Madison. In case you aren’t familiar with this website here is what’s happened so far. The Ashley Madison site is a site designed for people to search for companions, no matter what their marital status. This has resulted in it being a site popular among those who are unfaithful for their partners, a problem for many given that to leave the site you are required to pay a £15 fee. In protest of this though they seem to have been hacked, and as a result, this information has since been released on the internet. Now for the fun parts.
In contrast to the initial “moral” stance taken, of which many suspected the reason the hacked data was made public was in order to force people to be faithful and honest with their partners and in protest to the leaving fee, it would appear that this data is now being used by criminals to extort the people who have had their data exposed online. Demanding roughly 1.0000001 bitcoins (£147.28) from each person or to have their information revealed to their significant others.
All is not lost, as a file containing the emails of Ashley Madison’s CEO was left on an unprotected bittorrent server for hours. By not password protecting or disabling the web management system used in the file sharing system people were able to access and change the server configuration, and if it turns out that this was the original torrent server used to upload the files it could be possible to track down the IP of connecting users and find out who initially uploaded the files.
Hacks are appearing every day now and it would seem that people are using these to their own benefits, turning one crime into hundreds.
New startup Trees will deliver marijuana, bought using Bitcoin, to Californian potheads via drone. San Francisco-based Trees allows cannabis smokers to order boxes of weed online, using either a computer or a smartphone, and have it delivered to them the same day.
Trees offers three boxes: the Bud Box, which contains the more exotic varieties, the Extract Box, stuffed full of hash, and the beginner box, for those novices who want to know what all the fuss is about. Other items on offer include cigarette papers, filter tips (which must be some kind of initiation test, or something), and a grinder.
To be eligible to order, though, potential smokers must have a California medical marijuana license. But eligibility will be rendered irrelevant if Trees isn’t granted approval from the Federal Aviation Administration to fly its drones, with its application still being assessed.
“We’re not sure when we’ll be launching yet,” a spokesperson for Trees said. “We are based in San Francisco and the legal situation here is not clear yet.”
It remains to be seen whether Trees will have its flight application approved, since Amazon has been struggling for months to have its Amazon Prime Air drone delivery initiative given the thumbs-up by the FCC.
Thank you The Independent for providing us with this information.
Australia has begun a government enquiry which could lead to Bitcoin becoming a legitimate currency within the country. The Senate Economics References Committee is considering making the cryptocurrency a regular tender, with the same standing as regular money, for the purpose of Goods and Services Tax (GST).
The review contradicts the position of the Australian Taxation Office (ATO), which only last year determined Bitcoin to be a commodity, rather than legal tender or legitimate currency, and as such was liable for taxation under GST laws. That decision caused a number of Australian startups to threaten migration to another country.
The Senate Economics References Committee, though, has now criticised the ATO’s position, warning that it had placed “an additional burden on Australian digital currency businesses.”
“Without a doubt, the main benefit will be the confidence and certainty that removing a GST will provide to our own digital entrepreneurs, and the foreign businesses who want to set up here,” Labor Senator Sam Dastyari, chair of the committee, said. “Most importantly, it will send the message to local tech entrepreneurs that their government is listening to them, and that in itself is a major step forward.”
The committee’s review has been hailed as a positive step toward supporting new and existing tech businesses in Australia. “Sam Dastyari is recognising the growth potential of innovative technology, and I take it as a sane step towards the only sensible interpretation of the GST legislation,” said Chris Mountford, a developer at Atlassian, one of many companies that lobbied the committee to support Bitcoin. “[The ATO’s ruling] was going to be a barrier for startups, not for Bitcoin. Bitcoin was going to succeed despite Australia.”
Thank you Mashable for providing us with this information.
More than a year after troubled Bitcoin exchange Mt. Gox folded, authorities have finally moved against the beleaguered firm. Japanese police have arrested former CEO Mark Karpelès for his involvement in the collapse of the exchange. Leading up to the collapse, the exchange reportedly lost 750,000 Bitcoins belonging to customers as well as 100,000 held by Mt. Gox itself.
According to the Japanese police, Karpelès faces allegations that he manipulated the balance of company accounts as well as those of customers. Claims were also made that some of the missing Bitcoins may have never existed at all and that he falsified data to inflate the company’s assets. At the time, Mt. Gox blamed the loss of the Bitcoins on a bug and later hackers as well as simply losing them. Before filing for bankruptcy, the firm announced it had “found” 200,000 of the missing coins.
At the time of its closure, Mt. Gox was the biggest and most well-known Bitcoin exchange. When the coins were lost, they were worth almost $500 million, though that has since dropped to about $184 million. Karpelès denies any wrong doing at this point and blames the loss of Bitcoins on hackers and weak cyber security.
Thank you Engadget for providing us with this information
Leaked documents, published by WikiLeaks, have revealed that Italian spyware firm Hacking Team have the ability to track Bitcoin users, and have been selling the software with which to do it to third parties since January 2014. Hacking Team was recently subjected to a massive 400GB data theft, which included internal e-mails and private documents, which have now been made available, and searchable, in their entirety on the infamous whistleblowing website WikiLeaks.
Internal e-mails show that Hacking Team’s premier spyware bundle, the Remote Control System, was updated in January 2014 to allow it to track “cryptocurrencies, such as BitCoin, and all the related information.”
“The module is able to collect various information: list of contacts and local accounts, wallet (i.e., the money) and the history of transactions,” an e-mail from 12th January, 2014, reads. It continues: “Currently it is intended only for Desktops (Windows, OS X, Linux), while introduction in Mobiles is still under evaluation.”
The Remote Control System, when installed on the target’s computer, uses its keylogger to gain access to their Bitcoin wallet, allowing the surveillant to view transaction histories and balances.
“Here is some relevant context to position them in your pitch: Cryptocurrencies are a way to make untraceable transactions, and we all know that criminals love to easily launder, move, and invest black money,” the Hacking Team e-mail reads. “[Law enforcement agencies,] by using our Intelligence module combined with this new capability, can correlate the usage of cryptocurrencies, defeating the financial opacity they provide.”
Bitcoin’s popularity stems from its anonymity, security, and lack of centralised control. Not any more, it seems.
Thank you Epoch Times for providing us with this information.
Digital currencies have been gaining popularity in recent years due to the notion of a stateless payment method which is not influenced by any bank or country. This is perhaps why the big sharks are now starting to circulate around this notion of an online payment, as it’s been announced that Citibank has built its own digital currency based on Bitcoin and the blockchain.
According to Kenneth Moore, who is the head of Citigroup Innovations Lab, has stated that “we have up and running three separate systems within Citi now that actually deploy blockchain distributed ledger technologies. They are all within the labs just now so there is no real money passing through these systems yet, they are at a pre-production level.”
On paper this seems like a fantastic idea for funding and expertise to enter the Bitcoin field, the problem is however that if Citibank develop and release a currency, they will own it, and if they own it then the government will notice it, and if they notice it then this will fall under regulations which govern banks. If this happens, the currency will not be so free and more influenced. Only time will tell as to what will be the makeup of digital currencies in the next ten years or so. Just on a side note, it makes me wonder if the whole notion of “Online” is a dream for institutions seeking control. After all, people moved from real money to online money as a preference, if online money is influenced, where will people move to?
Thank You to IBT for providing us with this information
Hacking Team’s staff sound like a charming bunch, thanks to the hoard of internal e-mails that have been leaked – offering unethical malware services to US law enforcement, turning their noses up at human rights, and displaying outright contempt for activists, the latter of which being the subject of its latest controversy: threatening to have a member of the American Civil Liberties Union assassinated.
The ACLU’s Principal Technologist Christopher Soghoian stumbled upon a mention of his name in one of the leaked e-mails, written in Italian and dated 16th April. After passing the text through Google Translate, he discovered that he was named regarding a threat against his life.
I’m very tempted to respond, but we would only unleash hell. I think it’s self evident what a inbecile Soghoian is. If I could gather up enough Bitcoin I would use a service from the DarkNet and eliminate him. An asshole of this caliber doesn’t deserve to continue to consume oxygen.
Ironically, the same day the e-mail was sent, Hacking Team tweeted an article decrying Bitcoin, blaming it for helping obfuscate the identities of paedophiles:
It seems likely that this Twitter exchange motivated the e-mail assassination threat, regarding which Soghoian said, “This cheered me up. If they are making jokes like this, it means I am doing the right thing.”
Thank you The Intercept for providing us with this information.
Relativity recent and certainly modern anonymous currency Bitcoin has somewhat botched an upgrade which has left many Bitcoin miners generating invalid data blocks.
This upgrade applies to a new rule which means that certain Bitcoin mining pools which do not validate their money, have been generating the aforementioned invalid data blocks. This could also mean that if a consumer is paying by certain client apps to for example a retailer, the payment in Bitcoins could therefore be invalid which means said shopkeeper has received similar to that of a counterfeit note.
According to the official Bitcoin website, if you are using a lightweight (SPV) wallet, a Bitcoin Core 0.9.4 or earlier or a web wallet, you would need to wait a quite staggering 30 confirmations more than normal. Of course if you are using a paper note with a historical face on the front, this problem does not affect you.
It also turns out that “around half the network hash rate was mining without fully validating blocks (called SPV mining), and built new blocks on top of that invalid block”. Without implementing validation, many large miners have lost over $50,000 dollars worth of income so far.
Bitcoin may well be the future but as a consumer, I as yet do not trust the anonymity or security of this currency. After all, in order to buy a Bitcoin, a consumer would need to pay using a form of payment which connects the individual. On paper, yes I know, Bitcoin has potential to expand, but until the finer details are ironed out, I think I will stick to physical forms of currency.
Banks in Greece stayed shut on Monday as officials scrambled to prevent the country’s financial system from collapsing. Account holders were facing tough limits on what they can withdraw from ATMs, and trading in Greek stocks and bonds was also halted as measures to prevent Greece from sliding entirely out of the euro zone.
As that happened, the Greek population was looking for alternative currencies and it looks like they’ve found Bitcoin. International Bitcoin marketplaces all around the world are noticing increased traffic from Greece. Ten times as many Greeks are registering to trade Bitcoins on the german marketplace Bitcoin.de than usual and LakeBTC in China also saw a 40% increase in visitors from greece IP addresses.
Over the weekend, the Polish exchange Bitcurex also got flooded with emails from Greeks that wanted to know if Bitcoin is legal currency in the EU, if they can use it as a bank account and where in Greece they can find a Bitcoin ATM.
And while Bitcoins are a perfectly legal currency in the EU, getting them, using them, and trading them for other currencies is where the trouble starts. There is only one Bitcoin ATM in Greece at a bookstore in Athen. Generally just spending the Bitcoin can be difficult too as there only are half a dozen spots in Athens that accept Bitcoin as payment. Among them are a family restaurant, a head-and-neck surgeon, and a yacht rental company – maybe not the optimal choices for a country in trouble.
Thank You CNN for providing us with this information
Bitcoin is a digital currency, this means that we can get into some problems that paper currency can’t. The other problem with digital currency is that its price is extremely volatile, being able to skyrocket one day and then plummet the next.
A man in Breathitt County, Kentucky has found this problem after being ordered by a judge to repay a loan of bitcoins that he received in December 2013 (including interest). With the initial loan of 11.95 bitcoins the cost to repay would now come in at $67,800 (£42,680 approximately), the price to repay is quite a large one. At the time of the loan, the bitcoins came in at around $10,000, with the promise of a 20% return within a year to his lender, a man from Brazil.
The initial plan was to buy Bitcoin miners unfortunately that didn’t work out. After failing to repay the loan within 90 days of the initial deadline, legal action was taken and was awarded a total of 67.74 bitcoins.
This didn’t get paid and resulted in a US lawyer based in Kentucky who then filed a lawsuit in March 2015. While legally being ordered to repay the bitcoins, there is very little that can be done given the digital currency and laws in Kentucky that protect homeowners with deceased spouses who owe money.
While digital currency can help solve some problems paper currency has, without borders and proper legal oversight problems like this will come around more and more in the future.
Have you heard of the Silk Road? It’s been pretty big news recently. The website was the core of “the dark web” – a side of the internet that was only accessible to the uppermost of criminals.
The main person behind the Silk Road (Ross Ulbricht) was convicted for Life this week, after being prison since the 1st of October 2013. Ars Technica have published an article telling us what happened on that day:
On October 1, 2013, the last day that Ross Ulbricht would be free, he didn’t leave his San Francisco home until nearly 3:00pm. When he did finally step outside, he walked ten minutes to the Bello Cafe on Monterey Avenue but found it full, so he went next door to the Glen Park branch of the San Francisco Public Library. There, he sat down at a table by a well-lit window in the library’s small science fiction section and opened his laptop.
From his spot in the library, Ulbricht, a 29-year-old who lived modestly in a rented room, settled into his work. Though outwardly indistinguishable from the many other techies and coders working in San Francisco, Ulbricht actually worked the most unusual tech job in the city—he ran the Silk Road, the Internet’s largest drug-dealing website.
Shortly after connecting to the library WiFi network, Ulbricht was contacted on a secure, Silk Road staff-only chat channel.
“Are you there?” wrote Cirrus, a lieutenant who managed the site’s extensive message forums.
“Hey,” responded Ulbricht, appearing on Cirrus’ screen as the “Dread Pirate Roberts,” the pseudonym he had taken on in early 2012.
“Can you check out one of the flagged messages for me?” Cirrus wrote.
“Sure,” Ulbricht wrote back. He would first need to connect to the Silk Road’s hidden server. “Let me log in… OK, which post?”
Behind Ulbricht in the library, a man and woman started a loud argument. Ulbricht turned to look at this couple having a domestic dispute in awkward proximity to him, but when he did so, the man reached over and pushed Ulbricht’s open laptop across the table. The woman grabbed it and handed it off to FBI Special Agent Thomas Kiernan, who was standing nearby.
Ulbricht was arrested, placed in handcuffs, and taken downstairs. Kiernan took photos of the open laptop, occasionally pressing a button to keep it active. Later, he would testify that if the computer had gone to sleep, or if Ulbricht had time to close the lid, the encryption would have been unbreakable. “It would have turned into a brick, basically,” he said.
Then Cirrus himself arrived at the library to join Kiernan. Jared Der-Yeghiayan, an agent with Homeland Security Investigations, had been probing Silk Road undercover for two years, eventually taking over the Cirrus account and even drawing a salary from Ulbricht. He had come to California for the arrest, initiating the chat with Ulbricht—who had been under surveillance all day—from a nearby cafe.
Looking at Ulbricht’s computer, Der-Yeghiayan suddenly saw Silk Road through the boss’ eyes. In addition to the flagged message noted by Cirrus, the laptop’s Web browser was open to a page with an address ending in “mastermind.” It showed the volume of business moving through the Silk Road site at any given time. Silk Road vendors concealed their product in packages shipped by regular mail, and the “mastermind” page showed the commissions Silk Road stood to earn off those packages (the site took a bit more than 10 percent of a typical sale). It also showed the amount of time that had been logged recently by three top staffers: Inigo, Libertas, and Cirrus himself.
Ulbricht was soon transferred to a New York federal prison; bail was denied. In addition to charges of drug dealing and money-laundering, prosecutors claimed that Ulbricht had tried to arrange “hits” on a former Silk Road administrator and on several vendors. Though Ulbricht had in fact paid the money, the hits themselves were all faked—in one case, because a federal agent was behind the scheme, in another because Ulbricht appears to have been scammed using the same anonymity tools he championed.
Despite having been caught literally managing a drug empire at the moment of his arrest, Ulbricht pled not guilty. His family, together with a somewhat conspiracy-minded group of Bitcoin enthusiasts, raised a large pool of money for his defense. With it, Ulbricht hired Joshua Dratel, a defense lawyer who has handled high-profile terrorism trials.
Dratel did not reach any sort of plea deal with the government, as is common in such cases. Beyond a general insistence that his client was not, in fact, the Dread Pirate Roberts, Dratel offered no public explanation of what had happened in the Glen Park library—until January 2015, when the case went to trial at the federal courthouse on Pearl Street in lower Manhattan.
“Ross is a 30-year-old, with a lot at stake in this trial—as you could imagine,” Dratel said in his opening statement, addressing the jury in a low-key voice. “This case is about the Internet and the digital world, where not everything is as it seems. Behind a screen, it’s not always so easy to tell… you don’t know who’s on the other side.”
Ulbricht, he said, was only a fall guy, the stooge left holding the bag when the feds closed in; the “real” Dread Pirate Roberts was still at large. But would the jury buy this unlikely story?
The Silk road was a massive network of servers that provided a website to be able to buy almost every drug and illegal substance known to man. Upon login, users could see pictures of the substances and be able to access other tools such as hacking tools, fake ID’s and an illegal coupon scheme. All of which were held against Ulbricht in his trial. The site operated with a simple interface and had extensive user forums, providing a similar experience to Ebay and Craigslist. The website itself had no contact with drugs; it linked buyers and sellers together then taking a percentage of each transaction.
To access the website you had to use two technologies. Tor and Bitcoin. Tor was developed by the US navy originally and now managed by a nonprofit organization. It helped anonymize traffic by routing between several servers and encrypting the traffic on its way through.Bitcoin is known as a cryptocurrency; also an anonymous method for paying money to other anonymous people.
In July 2013, Der-Yeghiayan scored a bigger prize, taking over the account of a Silk Road staffer named “Cirrus.”
“Cirrus has always been dedicated to our community at large,” Dread Pirate Roberts explained in a private message introducing Cirrus to his small group of administrators shortly before Der-Yeghiayan took over the account.
Adopting Cirrus’ identity, Der-Yeghiayan earned 8 bitcoins a week—about $1,000 at the time—for moderating forum posts. After several weeks, he got a raise to 9 bitcoins a week. He was paid right up until the Silk Road site was shut down in October 2013.
For two years, Der-Yeghiayan worked the case without ever knowing DPR’s real name; he learned about “Ross Ulbricht” from another office just days before the arrest.
Homeland Security Investigations began making purchases from Silk Road, many of them under an account taken over from an existing site user called “dripsofacid.” (Various law enforcement agencies created their own accounts on Silk Road during its existence, but they also took over others after arresting their owners.)
When HSI made their controlled buys, they had the shipments sent to a name and address they used specifically for undercover purchases. Investigators compared the product received to the listing on Silk Road to confirm its origin. One purchase shown to the jury was 0.2 grams of brown heroin, bought from a seller in the Netherlands. The packaging was professional—the heroin tucked inside several plastic bags, which were themselves contained in a vacuum-sealed pouch, which was invisible behind a bluish sheet of paper.
Ultimately, HSI made 52 undercover buys from more than 40 distinct Silk Road dealers in 10 different countries. The drugs were all tested, and all but one purchase resulted in genuine goods. Silk Road, whatever one thought of it, worked as a market.
On the darknet, drugs are still available. But nowhere near the Silk Road has been seen, before or since. “Silk Road 2.0,” launched within a few months of Ulbricht’s arrest, lasted less than a year until its alleged creator, 25-year-old Blake Benthall, was arrested in San Francisco.
The most popular Silk Road successor, a darknet site called Evolution, shut down without warning in March—when its founders apparently emptied out the $12 million in its escrow system and ran. This sort of “exit scam” was the type of large-scale theft that users of such markets always knew was possible.
Any sense that the darknet could be a safe haven has now been shattered but Silk Road began years earlier, when the dream of creating a cryptographically protected libertarian utopia right in the midst of conventional society still seemed a reasonable proposition. But it was never likely to succeed for long—a fact that Ulbricht has now learned the hard way.
Thank you to ArsTechnica for providing us with this information
It’s strange to think that the police force could become a victim of hackers. The strict network security implementation would make you think that they’re safe from any hacking scheme. Clearly not.
Maine police departments have recently encountered hackers within their network. The police officials were baffled by the hackers who managed to break into the system and as a result had to resort to paying the ransom in Bitcoin.
The Associated press have stated that the network at the County Sheriff’s office was infiltrated by a type of virus called ransomware. This meant that the hackers blocked the police from getting access to their data until they paid the ransom off.
“It is normal practice for the county’s offices to be connected via an intranet facility. This procedure had been implemented to enhance connection between the four towns and their police departments; however, the hacking episode proved more of a cost to the police department. The hackers were able to enter the system and corrupt the data of all four towns” Said technewstoday.
Turns out that the hackers only requested that £200 worth of Bitcoins were sent to them, seems a rather small fee but the Maine police force will have now learned that network security is something not to be breached. Once the hackers received the payment they sent the officials the key to access the data again.
When asked about the hack by Technewstoday; Damariscotta Police Chief, Ron Young said “”we needed our programs to get back online.”
Usually, you would just revert to the latest backup of the servers used, however as luck had it the forces backup server hadn’t worked properly so the cops had no choice but to pay out the cash.
Despite the large number of online stores and services accepting bitcoins being over 100,000 worldwide, the volatile cryptocurrency usage remains low. Unfortunately for these supports, bitcoins decreasing value is not helping and possibly scaring away more potential investors and customers. However, supporters are urging owners to show patience through this rough time, as potential uses for bitcoins go beyond just finance. David Termac, a professor of finance at New York University Stern Schoold of Business said:
“There are some breakthroughs in technology that are going to endure whether bitcoin survives or not.”
Only more troubling during this time is the recent shutdown of bitcoin exchanges and other companies, which resulted in another case of missing bitcoins. In the end, if the cryptocurrency is to begin a recovery process, and bitcoin wallets start seeing more uses, there may be hope for its survival.
On a steady decline for over six months, the value of Bitcoin has plummeted to $190.13, marking a 50% drop in the past month, and 25% in just the last few days.
While Bitcoin is used to boom-and-bust fluctuations – the cryptocurrency reached the heady highs of $1,150 during the last quarter of 2013 – this latest decline has economists worried, to the point that Bitcoin miners have thrown in the towel, with some of the world’s largest operations forced to sell its mining hardware, currency reserves, or both, just to cover overheads and loans.
Despite the downturn, though, Bitcoin is as popular as ever, and that’s part of the problem: the more Bitcoins flood the market, the more their price will drop. Once the coins in circulation hit critical mass, they need to be spent for the currency to recover value. This valley could be seen as part of the natural evolution of Bitcoin from niche digital currency to legitimate tender.
Silk Road Reloaded, the latest version of the infamous darknet black market, has eschewed the Tor network for the little-known but more secure I2P network
Silk Road, its clones, and its successors alike have opted for Tor as their network of choice, but concerns over the level of anonymity the network provides, magnified by Edward Snowden’s revelations concerning the NSA’s PRISM spying program, have persuaded this latest iteration of Silk Road to move to I2P.
Silk Road Reloaded, unlike its originator, accepts cryptocurrencies Litecoin, Darkcoin, Anoncoin, and Dogecoin, as well as the traditional Bitcoin. Transactions made in currencies other than Bitcoin will be converted to Bitcoin through the site’s proprietary wallet.
The new service is said to be rather barren at present, but is expected to attract more activity over the coming months.
Online retailer overstock.com has installed a 24-hour Bitcom ATM at its headquarters in Cottonwood Heights, Utah. Being a virtual currency, actual Bitcoins will not be withdrawable from the machine, but users will be able to convert currency from Bitcoins to US Dollars, and vice-versa.
The ATM, manufactured by CoinOutlet Inc., has bank-grade security and only one of four such machines operating within the US.
Patrick M. Byrne, CEO of overstock.com, said, “Moving cryptocurrencies out of the realm of geeks and into the realm of the rest of us requires making changes at all levels of the financial ecosystem. An important part of this effort is making it easier for people to convert their digital money to cash, and vice versa.”
The company started accepting Bitcoin as legitimate tender a year ago, and has since made $3 million in sales from the currency. Employees of overstock.com even have the option to be paid in Bitcoin since the installation of the ATM.
