Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

News & Supplemental  

Bitcoin Horrow Show

Dave Emory’s entire life­time of work is avail­able on a flash drive that can be obtained here. (The flash drive includes the anti-fascist books avail­able on this site.)

COMMENT: We’ve done several shows about Bitcoin–apparently conceived by people from Siemens spin-off Lantiq, which was capitalized by Golden Gate Capital (formed by alumni of Bain Capital–Mitt Romeny’s firm.) Those programs are: FTR #’s 760, 764, 770, 785.

Derivative of the fascist doctrine stemming from the Austrian school of economic theory, Bitcoin is inextricably linked with the milieu of Edward Showden and the libertarian wing of the GOP.

A horrifying–though predictable–story from the Daily Mail illustrates the moral, practical and philosophical bankruptcy of libertarian philosophy. (A tip of the hat to “Participo” for this story.)

Kiddie porn freaks (with an apparent sadistic bent) have been using Bitcoin to finance online videos with the children being tortured with lit cigarettes.

Aside from the potential for such activity to be utilized by organized crime syndicates and intelligence services for a variety of purposes, this will  certainly obviate the need for rigorous surveillance of the internet.

We here a great deal about “freedom” these days, particularly in connection with the internet.

Real freedom, however, can only exist when married to responsibility. The propagation of activities such as the one described in the story below underscores the depravity of many of those who argue for an unmonitored internet, on which “anything goes.”

 “Dis­turb­ing New Inter­net Child Abuse Sees Tod­dlers Raped and Burned Live on Web­cam as Pae­dophiles use Bit­coin to Stop Being Traced, Warns Police Chief” by Kieran Corcoran; Daily Mail; 4/21/2014.

One of Europe’s top police offi­cers has warned of a sick­en­ing online trade in child tor­ture porn.

Rob Wain­wright, the direc­tor of Europol, said offend­ers are using the untrace­able online cur­rency Bit­coin to pay for depraved ‘shows’, per­formed live on web­cams, which see young chil­dren raped and burned.

He said: ‘The level of deprav­ity seems to be descend­ing year on year, frankly, includ­ing what seems to be in vogue now, which is live web­cam ‘shows’ of tod­dlers not just being raped but being burnt with cigarettes.

Scroll down for video

Sick­en­ing: Mark Wain­wright warned that online preda­tors were pay­ing to watch chil­dren be raped and burned live on webcam

‘Sorry, but it’s hap­pen­ing online and it’s extremely dif­fi­cult for us to identify.’

Mr Wain­wright warned that Bit­coin — a ‘crypto-currency’ based on math­e­mat­i­cal for­mu­lae and inde­pen­dent of any gov­ern­ment or cen­tral bank — is prop­ping up a crim­i­nal black market.

He also warned that police and politi­cians were strug­gling to keep up with the pace of online crime, thanks to wide­spread anonymity online, and easy access to encryp­tion tech­nol­ogy which can make crim­i­nals almost impos­si­ble to track down.

Mr Wain­wright warned that the prin­ci­ple that everyone’s online activ­ity should be anony­mous by default needs to be chal­lenged in order to police the inter­net effectively.

(*fur­ther enhanc­ing the require­ment for a vir­tual panop­ti­con — participo)

He crit­i­cised the slug­gish response from the police, politi­cians and big busi­nesses, say­ing that equiv­a­lent lev­els of crime in the phys­i­cal world would be ‘front page news.’

Every­thing you need to know about bitcoin

Black mar­ket: The Bit­coin cryp­tocur­rency is being used for ille­gal activ­i­ties, Mr Wain­wright warned

–Black mar­ket: The Bit­coin cryp­tocur­rency is being used for ille­gal activ­i­ties, Mr Wain­wright warned
He told The Times: ‘It is frus­trat­ing that we are not get­ting the mes­sage out, at least not loud enough for leg­is­la­tors to hear it.’

The Inter­net Watch Foun­da­tion pres­sure group has recently claimed to have found evi­dence of an email scam direct­ing peo­ple to under­ground web­sites where the sick ‘shows’ could be seen in exchange for Bitcoin.

 

Discussion

7 comments for “Bitcoin Horrow Show”

  1. With the means shut down anything it wants on the internet, just whom in the government is protecting these sites?

    Posted by David | April 26, 2014, 4:05 pm
  2. A large swath of the commercial ‘Dark Web’, potentially around a third of it including Silk Road 2.0, just went dark:

    The New York Times
    International Raids Target Sites Selling Contraband on the ‘Dark Web’

    By BENJAMIN WEISER and DOREEN CARVAJALNOV. 7, 2014

    In the digital marketplace, they operated as a secret underground with names like Blue Sky and Silk Road 2.0 where anonymous buyers could purchase drugs, stolen credit cards and weapons, or even hire a hit man.

    These websites, known as the “dark web,” cannot be found by Google or even by typing in a web address. The sites typically operated on the Tor network, which is designed to conceal the I.P. addresses of the computers being used.

    It was that thriving online black market that American and international authorities announced on Friday had been the target of a series of raids and arrests in 16 countries, which included the seizure of dozens of websites that matched anonymous sellers and buyers for illicit goods and services.

    The investigation, nicknamed Operation Onymous, was aimed chiefly at sellers, and deactivated upward of 50 such websites, including Silk Road 2.0 and Blue Sky, as well as Mr. Quid’s Forum and Cannabis Road Markets, according to Europol, the European Union’s law enforcement agency.

    Across Europe and the United States, at least 17 sellers were arrested, and law enforcement authorities seized Bitcoins valued at $1 million, along with gold, cash and drugs, according to Troels Oerting, who heads Europol’s cybercrime center. The investigation had been underway for months as the illegal online market “mushroomed,” Mr. Oerting said.

    The international effort was “the largest law enforcement action to date against criminal websites operating on the Tor network,” said Preet Bharara, the United States attorney in Manhattan, whose office announced the operation on Friday. “As illegal activity online becomes more prevalent,” he added, “criminals can no longer expect that they can hide in the shadows of the ‘dark web.’ ”

    On Thursday, Mr. Bharara’s office announced charges against a California man, Blake Benthall, 26, who was arrested the previous day in San Francisco and charged with narcotics trafficking, money laundering and hacking conspiracies in connection with his operation of Silk Road 2.0. That site, the authorities said, was the successor to the original Silk Road website and identical in operation.

    As recently as Oct. 29, Silk Road 2.0 was “dominated by offerings for illegal narcotics,” with 14,024 listings for “Drugs,” including 1,654 for “Psychedelics” and 1,921 for “Ecstasy,” according to a federal complaint. The website recently had about 150,000 monthly active users, generating at least $8 million in monthly sales and $400,000 in monthly commissions, the authorities said.

    The operation was led by American law enforcement agencies — the Federal Bureau of Investigation and Homeland Security Investigations — and coordinated by Europol in the various European countries. The raids started on Wednesday, with Mr. Benthall’s arrest, and continued through Friday in a broad sweep.

    Raids took place across Europe, including France, Germany, Spain, Britain and Ireland. Mr. Bharara’s office cited the cooperation of those countries, as well as Bulgaria, the Czech Republic, Finland, Hungary, Latvia, Lithuania, Luxembourg, the Netherlands, Romania, Sweden and Switzerland.

    Mr. Oerting declined to say how the authorities had cracked the dark websites despite the sites’ use of anonymous software. But the investigation appears to have been full of intrigue.

    An undercover Homeland Security agent “successfully infiltrated the support staff involved in running” Silk Road 2.0, was provided access to its private areas and “regularly interacted directly” with Mr. Benthall, who used the screen name Defcon, according to the complaint, which was filed in federal court in Manhattan.

    The agent even became a paid staff member of Silk Road 2.0, and since January received regular payments in Bitcoins totaling about $32,000, according to the complaint.

    The Tor browser, originally developed by the United States Naval Research Laboratory, is an open source project that permits people to use the Internet without revealing their location. It is used not only for criminal activities but by whistle-blowers and activists seeking to avoid detection.

    Users of Tor, an acronym for the onion router for its layers of encryption, need special software.

    Mr. Bharara’s office said Friday that the broad operation against the “dark market” sites involved the seizure of more than 400 Tor web addresses and the servers hosting them. The targeted websites included some designed to mimic conventional online retail giants, even down to offering a system to review and rate the quality of service.

    “The business model is to create web stores on these hidden services and then use the normal transport to deliver it,” Mr. Oerting said.

    While a strong case can be made that the shutdown of these Dark Web sites is just an extension of a damaging Drug War that shouldn’t exist in the first place, that’s certainly not the nature of all of the activities on those sites. Still, it’s worth noting that Tor creator Roger Dingledine told reporters that that TOR officially does not condone using Tor for any illegal activities:

    ‘Dark Web’ Drug Site Challenge Law Enforcement
    SAN FRANCISCO — Nov 7, 2014, 5:48 PM ET
    By PAUL ELIAS and TOBY STERLING Associated Press

    No sooner had authorities announced the shuttering of an alleged illegal online drug bazaar than another popped up claiming to take its place.

    Welcome to the “dark Web,” an increasingly popular corner of the Internet where thousands of computer users from around the globe interact anonymously — and, in many cases, illegally.

    On Thursday, the U.S. Department of Justice charged a 26-year-old San Francisco man with operating Silk Road 2.0, an anonymous website that authorities say rang up $8 million in monthly drug sales.

    On Friday, an underground website calling itself Silk Road 3.0 Reloaded claimed to be open for business on the TOR network, which is linked globally through special browsers that encrypt Internet traffic. Several other websites on the TOR network also claimed to be open for drug transactions.

    “As long as the dark Web exists, there will always be people who set up places to engage in wrongdoing,” said Joseph DeMarco, a defense attorney and former federal prosecutor who headed the computer crimes section of the U.S. attorney’s office in New York. DeMarco said he was skeptical that a single “global solution” would be found to stop illegal activity on the TOR network.

    “There will always be an arms race between the bad guys and law enforcement,” DeMarco said.

    Those who created and support the TOR network say it’s a way to protect online users’ privacy in the digital age. TOR boasts that none of its websites will appear in Google search.

    “TOR was created to protect people’s privacy and anonymity, and we don’t condone its use for these illegal activities,” said Roger Dingledine, who co-created the TOR network originally for the U.S. Navy.

    But investigators around the globe say the network is also a place of flagrant and profligate illegal activity of all sorts — from prostitution to arms trafficking — and they vow to crack down.

    “Underground websites such as Silk Road and Silk Road 2.0 are like the Wild West of the Internet, where criminals can anonymously buy and sell all things illegal,” said Homeland Security Investigations Executive Associate Director Peter Edge.

    As we can see, with Silk Road 3.0 already online the age of the endless Dark Web whack-a-mole is upon us. Putting aside the likelihood that this ends up being an endless cat and mouse game between law enforcement agencies and the internet user and putting aside the pointlessness of the Drug War, it will be interesting to see how the Tor community itself deals with the worst Tor abuses. Especially since, contrary to Roger Dingledine’s claims that Tor doesn’t condone illegal activity, the whole Tor project basically requires it:

    Pando Daily
    Almost everyone involved in developing Tor was (or is) funded by the US government

    By Yasha Levine
    On July 16, 2014

    “The United States government can’t simply run an anonymity system for everybody and then use it themselves only. Because then every time a connection came from it people would say, “Oh, it’s another CIA agent.” If those are the only people using the network.”

    —Roger Dingledine, co-founder of the Tor Network, 2004

    In early July, hacker Jacob Appelbaum and two other security experts published a blockbuster story in conjunction with the German press. They had obtained leaked top secret NSA documents and source code showing that the surveillance agency had targeted and potentially penetrated the Tor Network, a widely used privacy tool considered to be the holy grail of online anonymity.

    Internet privacy activists and organizations reacted to the news with shock. For the past decade, they had been promoting Tor as a scrappy but extremely effective grassroots technology that can protect journalists, dissidents and whistleblowers from powerful government forces that want to track their every move online. It was supposed to be the best tool out there. Tor’s been an integral part of EFF’s “Surveillance Self-Defense” privacy toolkit. Edward Snowden is apparently a big fan, and so is Glenn Greenwald, who says it “allows people to surf without governments or secret services being able to monitor them.”

    But the German exposé showed Tor providing the opposite of anonymity: it singled out users for total NSA surveillance, potentially sucking up and recording everything they did online.

    To many in the privacy community, the NSA’s attack on Tor was tantamount to high treason: a fascist violation of a fundamental and sacred human right to privacy and free speech.

    The Electronic Frontier Foundation believes Tor to be “essential to freedom of expression.” Appelbaum — a Wikileaks volunteer and Tor developer — considers volunteering for Tor to be a valiant act on par with Hemingway or Orwell “going to Spain to fight the Franco fascists” on the side of anarchist revolutionaries.

    It’s a nice story, pitting scrappy techno-anarchists against the all-powerful US Imperial machine. But the facts about Tor are not as clear cut or simple as these folks make them out to be…

    Let’s start with the basics: Tor was developed, built and financed by the US military-surveillance complex. Tor’s original — and current — purpose is to cloak the online identity of government agents and informants while they are in the field: gathering intelligence, setting up sting operations, giving human intelligence assets a way to report back to their handlers — that kind of thing. This information is out there, but it’s not very well known, and it’s certainly not emphasized by those who promote it.

    Peek under Tor’s hood, and you quickly realize that just everybody involved in developing Tor technology has been and/or still is funded by the Pentagon or related arm of the US empire. That includes Roger Dingledine, who brought the technology to life under a series of military and federal government contracts. Dingledine even spent a summer working at the NSA.

    If you read the fine print on Tor’s website, you’ll see that Tor is still very much in active use by the US government:

    “A branch of the U.S. Navy uses Tor for open source intelligence gathering, and one of its teams used Tor while deployed in the Middle East recently. Law enforcement uses Tor for visiting or surveilling web sites without leaving government IP addresses in their web logs, and for security during sting operations.”

    NSA? DoD? U.S. Navy? Police surveillance? What the hell is going on? How is it possible that a privacy tool was created by the same military and intelligence agencies that it’s supposed to guard us against? Is it a ruse? A sham? A honeytrap? Maybe I’m just being too paranoid…

    Unfortunately, this is not a tinfoil hat conspiracy theory. It is cold hard fact.

    Brief history of Tor

    The origins of Tor go back to 1995, when military scientists at the Naval Research Laboratory began developing cloaking technology that would prevent someone’s activity on the Internet from being traced back to them. They called it “onion routing” — a method redirecting traffic into a parallel peer-to-peer network and bouncing it around randomly before sending it off to its final destination. The idea was to move it around so as to confuse and disconnect its origin and destination, and make it impossible for someone to observe who you are or where you’re going on the Internet.

    Onion routing was like a hustler playing the three-card monte with your traffic: the guy trying to spy on you could watch it going under one card, but he never knew where it would come out.

    The technology was funded by the Office of Naval Research and DARPA. Early development was spearheaded byPaul Syverson, Michael Reed and David Goldschlag — all military mathematicians and computer systems researchers working for the Naval Research Laboratory, sitting inside the massive Joint Base Anacostia-Bolling military base in Southeast Washington, D.C.

    The original goal of onion routing wasn’t to protect privacy — or at least not in the way most people think of “privacy.” The goal was to allow intelligence and military personnel to work online undercover without fear of being unmasked by someone monitoring their Internet activity.

    “As military grade communication devices increasingly depend on the public communications infrastructure, it is important to use that infrastructure in ways that are resistant to traffic analysis. It may also be useful to communicate anonymously, for example when gathering intelligence from public databases,” explained a 1997 paper outlining an early version of onion routing that was published in the Naval Research Labs Review.

    In the 90s, as public Internet use and infrastructure grew and multiplied, spooks needed to figure out a way to hide their identity in plain sight online. An undercover spook sitting in a hotel room in a hostile country somewhere couldn’t simply dial up CIA.gov on his browser and log in — anyone sniffing his connection would know who he was. Nor could a military intel agent infiltrate a potential terrorist group masquerading as an online animal rights forum if he had to create an account and log in from an army base IP address.

    That’s where onion routing came in. As Michael Reed, one of the inventors of onion routing, explained: providing cover for military and intelligence operations online was their primary objective; everything else was secondary:

    The original *QUESTION* posed that led to the invention of Onion Routing was, “Can we build a system that allows for bi-directional communications over the Internet where the source and destination cannot be determined by a mid-point?” The *PURPOSE* was for DoD / Intelligence usage (open source intelligence gathering, covering of forward deployed assets, whatever). Not helping dissidents in repressive countries. Not assisting criminals in covering their electronic tracks. Not helping bit-torrent users avoid MPAA/RIAA prosecution. Not giving a 10 year old a way to bypass an anti-porn filter. Of course, we knew those would be other unavoidable uses for the technology, but that was immaterial to the problem at hand we were trying to solve (and if those uses were going to give us more cover traffic to better hide what we wanted to use the network for, all the better…I once told a flag officer that much to his chagrin).

    Apparently solving this problem wasn’t very easy. Onion router research progressed slowly, with several versions developed and discarded. But in 2002, seven years after it began, the project moved into a different and more active phase. Paul Syverson from the Naval Research Laboratory stayed on the project, but two new guys fresh outta MIT grad school came on board: Roger Dingledine and Nick Mathewson. They were not formally employed by Naval Labs, but were on contract from DARPA and the U.S. Naval Research Laboratory’s Center for High Assurance Computer Systems. For the next several years, the three of them worked on a newer version of onion routing that would later become known as Tor.

    Very early on, researchers understood that just designing a system that only technically anonymizes traffic is not enough — not if the system is used exclusively by military and intelligence. In order to cloak spooks better, Tor needed to be used by a diverse group of people: Activists, students, corporate researchers, soccer moms, journalists, drug dealers, hackers, child pornographers, foreign agents, terrorists — the more diverse the group that spooks could hide in the crowd in plain sight.

    Tor also needed to be moved off site and disassociated from Naval research. As Syverson told Bloomberg in January 2014: “If you have a system that’s only a Navy system, anything popping out of it is obviously from the Navy. You need to have a network that carries traffic for other people as well.”

    Dingledine said the same thing a decade earlier at the 2004 Wizards of OS conference in Germany:

    “The United States government can’t simply run an anonymity system for everybody and then use it themselves only. Because then every time a connection came from it people would say, ‘Oh, it’s another CIA agent.’ If those are the only people using the network.”

    The consumer version of Tor would be marketed to everyone and — equally important — would eventually allow anyone to run a Tor node/relay, even from their desktop computer. The idea was to create a massive crowdsourced torrent-style network made up from thousands of volunteers all across the world.

    At the very end of 2004, with Tor technology finally ready for deployment, the US Navy cut most of its Tor funding, released it under an open source license and, oddly, the project was handed over to the Electronic Frontier Foundation.

    Yes, as we can see, while Roger Dingledine may state that “TOR was created to protect people’s privacy and anonymity, and we don’t condone its use for these illegal activities,” it’s also pretty clear that Tor’s developers recognized that those non-condones activities are required for Tor to be truly anonymizing for the real purpose Tor was developed by the US government (giving spooks a means of communicating anonymously). That illegal activity is the haystack that the spooky needles need to hide. And, at the same time, a third of the Dark Web just got shut down even though it relies the anonymizing tool championed by Edward Snowden and Jacob Appelbaum (himself a Tor developer) that’s supposed to allow these sites to operate in an untraceable manner. Have fun peeling that onion.

    Posted by Pterrafractyl | November 8, 2014, 8:57 pm
  3. Let’s hope there’s some sort of horrible flaw in this study, given the horrible findings:

    Wired
    Over 80 Percent of Dark-Web Visits Relate to Pedophilia, Study Finds

    By Andy Greenberg
    12.30.14 | 12:30 pm

    The mysterious corner of the Internet known as the Dark Web is designed to defy all attempts to identify its inhabitants. But one group of researchers has attempted to shed new light on what those users are doing under the cover of anonymity. Their findings indicate that an overwhelming majority of their traffic is driven by the Dark Web’s darkest activity: the sexual abuse of children.

    At the Chaos Computer Congress in Hamburg, Germany today, University of Portsmouth computer science researcher Gareth Owen will present the results of a six-month probe of the web’s collection of Tor hidden services, which include the stealthy websites that make up the largest chunk of the Dark Web. The study paints an ugly portrait of that Internet underground: drug forums and contraband markets are the largest single category of sites hidden under Tor’s protection, but traffic to them is dwarfed by visits to child abuse sites. More than four out of five Tor hidden services site visits were to online destinations with pedophilia materials, according to Owen’s study. That’s over five times as many as any of the other categories of content that he and his researchers found in their Dark Web survey, such as gambling, bitcoin-related sites or anonymous whistle-blowing.

    The researchers’ disturbing statistics could raise doubts among even the staunchest defenders of the Dark Web as a haven for privacy. “Before we did this study, it was certainly my view that the dark net is a good thing,” says Owen. “But it’s hampering the rights of children and creating a place where pedophiles can act with impunity.”

    Precisely measuring anything on the Dark Web isn’t easy, and the study’s findings leave some room for dispute. The creators of Tor known as the Tor Project responded to a request for comment from WIRED with a list of alternative factors that could have skewed its results. Law enforcement and anti-abuse groups patrol pedophilia Dark Web sites to measure and track them, for instance, which can count as a “visit.” In some cases, hackers may have launched denial of service attacks against the sites with the aim of taking them offline with a flood of fraudulent visits. Unstable sites that frequently go offline might generate more visit counts. And sites visited through the tool Tor2Web, which is designed to make Tor hidden services more accessible to non-anonymous users, would be underrepresented. All those factors might artificially inflate the number of visits to child abuse sites measured by the University of Portsmouth researchers.1

    “We do not know the cause of the high hit count [to child abuse sites] and cannot say with any certainty that it corresponds with humans,” Owen admitted in a response to the Tor Project shared with WIRED, adding that “caution is advised” when drawing conclusions about the study’s results.

    Tor executive director Roger Dingledine followed up in a statement to WIRED pointing out that Tor hidden services represent only 2 percent of total traffic over Tor’s anonymizing network. He defended Tor hidden services’ privacy features. “There are important uses for hidden services, such as when human rights activists use them to access Facebook or to blog anonymously,”. he wrote, referring to Facebook’s launch of its own hidden service in October. “These uses for hidden services are new and have great potential.”

    Here’s how the Portsmouth University study worked: From March until September of this year, the research group ran 40 “relay” computers in the Tor network, the collection of thousands of volunteer machines that bounce users’ encrypted traffic through hops around the world to obscure its origin and destination. These relays allowed them to assemble an unprecedented collection of data about the total number of Tor hidden services online—about 45,000 at any given time—and how much traffic flowed to them. They then used a custom web-crawling program to visit each of the sites they’d found and classify them by content.

    The researchers found that a majority of Tor hidden service traffic—the traffic to the 40 most visited sites, in fact—were actually communications from “botnet” computers infected with malware seeking instructions from a hacker-controlled server running Tor. Most of those malware control servers were offline, remnants of defunct malware schemes like the Skynet botnet whose alleged operator was arrested last year.

    But take out that automated malware traffic, and 83 percent of the remaining visits to Tor hidden service websites sought sites that Owen’s team classified as related to child abuse. Most of the sites were so explicit as to include the prefix “pedo” in their name. (Owen asked that WIRED not name the sites for fear of driving more visitors to them.) The researchers’ automated web crawler downloaded only text, not pictures, to avoid any illegal possession of child pornographic images or video. “It came as a huge shock to us,” Owen says of his findings. “I don’t think anyone imagined it was on this scale.”

    Despite their popularity on the Tor network, child abuse sites represent only about 2 percent of Tor hidden service websites—just a small number of pedophilia sites account for the majority of Dark Web http traffic, according to the study. Drug-related sites and markets like the now-defunct Silk Road 2, Agora or Evolution represented a total of about 24 percent of the sites measured in the study, by contrast. But visits to those sites accounted for only about 5 percent of site requests on the Tor network, by the researchers’ count. Whistleblower sites like SecureDrop and Globaleaks, which allow anonymous users to upload sensitive documents to news organizations, accounted for 5 percent of Tor hidden service sites, but less than a tenth of a percent of site visits.

    The study also found that the vast majority of Tor hidden services persist online for only a matter of days or weeks. Less than one in six of the hidden services that was online when Owen’s study began remained online at the end of it. Since the study only attempted to classify sites by content at the end of its six month probe, Tor director Roger Dingledine points out that it could over-represent child abuse sites that remained online longer than other types of sites. “[The study] could either show a lot of people visiting abuse-related hidden services, or it could simply show that abuse-related hidden services are more long-lived than others,” he writes. “We can’t tell from the data.”

    The Study Raises the Question: How Dark Is The Dark Web?

    Other defenders of the Tor network’s importance as an alternative to the public, privacy-threatened Web will no doubt bristle at Owen’s findings. But even aside from the Tor Project’s arguments about why the study’s findings may be skewed, its results don’t necessarily suggest that Tor is overwhelmingly used for child abuse. What they may instead show is that Tor users who seek child abuse materials use Tor much more often and visit sites much more frequently than those seeking to buy drugs or leak sensitive documents to a journalist.

    Nonetheless, the study raises new questions about the darkest subcultures of the Dark Web and law enforcement’s response to them. In November, the FBI and Europol staged a massive bust of Tor hidden services that included dozens of drug and money laundering sites, including three of the six most popular anonymous online drug markets. The takedowns occurred after Owen’s study concluded, so he doesn’t know which of the pedophilia sites he measured may have been caught in that dragnet. None of the site takedowns trumpeted in the FBI and Europol press releases mentioned pedophilia sites, nor did an analysis of the seizures by security researcher Nik Cubrilovic later that month.

    In his Chaos Computer Congress talk, Owen also plans to present methods that could be used to block access to certain Tor hidden services. A certain number of carefully configured Tor relays, he says, could be used to alter the “distributed hash table” that acts as a directory for Tor hidden services. That method could block access to a child abuse hidden service, for instance, though Owen says it would require 18 new relays to be added to the Tor network to block any single site. And he was careful to note that he’s merely introducing the possibility of that controversial blocking measure, not actually suggesting it. One of Tor’s central purposes, after all, is to evade censorship, not enable it.

    So it sounds like there at least might be a way for the Tor user community to block these services.

    Will such methods get used? Well, that will probably depend on the leadership of the Tor developer community. Good luck with that…

    Posted by Pterrafractyl | January 1, 2015, 1:29 pm
  4. Well, here’s an example of “ransomware” blackmailers actually convert their ill-gotten bitcoins into actual cash: they used the traditional financial system and its traditional services. Services like looking the other while while you engage in blatant money-laundering:

    Credit Union Times
    New Jersey Credit Union Tied to Illegal Bitcoin Scheme
    By Peter Strozniak
    July 22, 2015

    New York federal prosecutors arrested two Florida men Tuesday who allegedly ran a phony company and controlled a New Jersey federal credit union to operate an unlicensed Internet Bitcoin exchange scheme for the purpose of laundering money for criminals.

    Since late 2013, Anthony R. Murgio, 31, of Tampa and Yuri Lebedev, 37, of Jacksonville, operated Coin.mx, a Bitcoin exchange service, which violated federal anti-money laundering laws. Through Coin.mx, Murgio and Lebedev enabled their customers to exchange cash for Bitcoins, charging a fee for their service.

    Federal prosecutors alleged that the two men exchanged cash for people whom they believed might be engaging in criminal activity.

    In late 2014, Murgio obtained “beneficial control” of a small New Jersey federal credit union, which was processing more than $30 million a month, to process ACH transactions, according to court documents.

    Murgio managed his control over the credit union by making a payment to a senior executive and installing individuals close to him, including Lebedev, on the credit union’s board of directors.

    Federal prosecutors did not name the credit union.

    Court documents also show the executive was becoming worried about the “tap dancing” he and others were doing to avoid raising concern among federal regulators about the payment process activity that Murgio and others were conducting through the cooperative.

    “We can’t certify that all the people we let [pass] money through this credit union…..weren’t doing something illegally with the money,” the executive wrote in an email to Murgio.

    The executive also acknowledged that the credit union had not performed appropriate Bank Secrecy Act procedures and, as a result, the credit union’s account may have been used for money laundering and other crimes.

    Although the NCUA learned the credit union was processing more than $30 million a month in ACH transactions, court documents do not say when it forced the New Jersey cooperative to stop processing the ACH transactions. The NCUA also required the credit union to remove the new board members.

    However, Murgio found other ways to process payments for Coin.mx – primarily through an overseas payments processor.

    Murgio and Lebedev also allegedly exchanged cash for Bitcoins for victims of “ransomware” attacks. Criminals use ransomware known as Cryptowall to electronically block access to a victim’s computer system until ransom money, typically in Bitcoins, is paid to them.

    From October 2013 to January 2015, Coin.mx exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers. In addition, in the course of the scheme, Murgio also transferred hundreds of thousands of dollars to bank accounts in Cyprus, Hong Kong and Eastern Europe, and received hundreds of thousands of dollars from bank accounts in Cyprus and the British Virgin Islands, federal prosecutors alleged.

    What’s more, Murgio and Lebedev managed to evade detection of their scheme by operating through a phony front-company called the Collectables Club, which also maintained a corresponding fake website.

    Federal prosecutors alleged the Florida men ran the bogus business to trick two major financial institutions to open bank accounts under the Collectables Club.

    Murgio and Lebedev convinced bank officials to believe that the Bitcoin exchange was simply a members-only association of individuals who discussed, bought and sold collectable items, such as sports memorabilia, and that the accounts would be used to deposit membership dues and service fees.

    However, according to court documents, the bank accounts were used to operate Coin.mx. From September 2013 to mid-2014, Murgio and Lebedev exchanged more than $1 million for Bitcoins on behalf of Coin.mx customers.

    The Collectables Club account records show thousands of incoming deposits in varying amounts from individuals, some of whom in wire transfer instructions noted that their payment was for Bitcoins. Additionally, the bank records also showed numerous payments were made to entities that sell Bitcoins in exchange for U.S. dollars and other currency.

    The banks were not identified in court documents.

    Murgio and Lebedev were each charged with one count of conspiracy to operate an unlicensed money transmitting business, and one count of operating an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison.

    In addition, Murgio was also charged with one count of money laundering, which carries a maximum sentence of 20 years in prison and one count of willful failure to file a suspicious activity report, which carries a maximum sentence of five years in prison, federal prosecutors said.

    While it’s not clear, it appears that ransomware victims were going specifically to this service to exchange cash for the bitcoins they needed to pay off the ransom:


    Murgio and Lebedev also allegedly exchanged cash for Bitcoins for victims of “ransomware” attacks. Criminals use ransomware known as Cryptowall to electronically block access to a victim’s computer system until ransom money, typically in Bitcoins, is paid to them.

    From October 2013 to January 2015, Coin.mx exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers. In addition, in the course of the scheme, Murgio also transferred hundreds of thousands of dollars to bank accounts in Cyprus, Hong Kong and Eastern Europe, and received hundreds of thousands of dollars from bank accounts in Cyprus and the British Virgin Islands, federal prosecutors alleged.

    So was this service almost acting like a laundering-service for ransomeware victims that wanted to keep their payments quiet too? If so, that certainly raises questions about the volume of ransomware crimes committed, but you have to wonder how victims would have known to such a service unless the ransomers directed them there (which would be extremely high risk) or these ransomware victims are, themselves, the types of individuals that just happen to know where to go when you need launder your purchases of bitcoins (one group of cybercriminals ransoming another?).

    Either way, that sure sounds like the type of bank you do NOT want to find yourselve doing business with, although it’s unclear if the two banks that allowed the “Collectables Club” to set up bank accounts for additional laundering-purposes were actually going to be punished. So it’s probably ok if you find yourself doing business with a bank like that…assuming you’re also a bank. It’s one of the fun quirks of money-laundering!


    What’s more, Murgio and Lebedev managed to evade detection of their scheme by operating through a phony front-company called the Collectables Club, which also maintained a corresponding fake website.

    Federal prosecutors alleged the Florida men ran the bogus business to trick two major financial institutions to open bank accounts under the Collectables Club.

    Murgio and Lebedev convinced bank officials to believe that the Bitcoin exchange was simply a members-only association of individuals who discussed, bought and sold collectable items, such as sports memorabilia, and that the accounts would be used to deposit membership dues and service fees.

    However, according to court documents, the bank accounts were used to operate Coin.mx. From September 2013 to mid-2014, Murgio and Lebedev exchanged more than $1 million for Bitcoins on behalf of Coin.mx customers.

    The Collectables Club account records show thousands of incoming deposits in varying amounts from individuals, some of whom in wire transfer instructions noted that their payment was for Bitcoins. Additionally, the bank records also showed numerous payments were made to entities that sell Bitcoins in exchange for U.S. dollars and other currency.

    The banks were not identified in court documents.

    “The Collectables Club account records show thousands of incoming deposits in varying amounts from individuals, some of whom in wire transfer instructions noted that their payment was for Bitcoins. Additionally, the bank records also showed numerous payments were made to entities that sell Bitcoins in exchange for U.S. dollars and other currency”.

    Well, now we know there’s a opening in the market for bitcoin ransomware money-laundering services which means a whole new round of “Collectables Club” are probably on the way. Of course, those future “clubs” are going to have to be even sneakier at masking their bitcoin-related activities than “Collectables Club” if they want to avoid getting caught (not really) and that means something else collectors should keep in mind: the numismatic coin market might be in store for some unusual additions.

    Posted by Pterrafractyl | July 23, 2015, 2:59 pm
  5. ISIS parks its cash in Bitcoin, experts say

    By Heather Nauert Published November 25, 2015 FoxNews.com

    Facebook1346 Twitter0 livefyre2063 Email Print

    Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015.

    Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. (REUTERS/Benoit Tessier )

    Just days after the hacker group Anonymous pledged to hunt down Islamic State members and launch cyberattacks against their accounts, a separate group of techies claims it has identified a key funding avenue for the terror network – bitcoin accounts.

    Ghost Security Group, a collective of computer “hacktivists,” says it has located several bitcoin accounts that ISIS uses to fund operations. One account contained $3 million worth of bitcoin, a GhostSec member told Michael K. Smith II, a co-founder of Kronos Advisory, a national security advisory firm.

    GhostSec “wants to make an impact in counterterrorism,” Smith said, adding that the GhostSec member reached out to him because government officials were not paying close attention to the allegations.

    Related: Has Anonymous’s war against ISIS been doing more harm than good?

    Smith said U.S. counterterrorism officials are concerned that ISIS is acquiring gold and using numerous financial tools, including bitcoin, to tap into markets. A Treasury Department spokesperson said the agency couldn’t comment on accounts allegedly linked to terrorists unless the department has taken public action.

    But bitcoin – an unregulated form of online currency that circumvents the traditional banking system – is on the government’s radar, since it could serve as an ideal placeholder for terrorist assets and provide a way for terrorists to exchange money. The bitcoin website, bitcoin.org, describes the ease with which anyone can send and receive virtual funds:

    “Sending bitcoins across borders is as easy as sending them across the street. There are no banks to make you wait three business days, no extra fees for making an international transfer, and no special limitations on the minimum or maximum amount you can send.”

    Bitcoin is considered the first worldwide, decentralized currency; it can be sent from person to person without the third-party involvement of a financial institution. Bitcoin accounts are set up with virtual money, but the digital funds can be cashed in for real money or goods.

    Related: #BrusselsLockdown request for social media blackout prompts flood of cat pictures

    A GhostSec member said ISIS’ virtual currency amounts to between 1 percent and 3 percent of its total income – between $4.7 million and $15.6 million. The Treasury Department estimates that ISIS generates between $468 million and $520 million annually. The terror group’s primary sources of revenue are robbery, extortion, oil sales, ransom payments and overseas donations, according to the Treasury Department.

    But it doesn’t take a fortune to pull off a terror attack. Even large-scale attacks can be relatively inexpensive. The 9/11 Commission determined that it cost between $400,000 and $500,000 to plan and carry out the September 11 attacks on New York and Washington.

    GhostSec hackers insist the alleged ISIS bitcoin account was not linked to the Paris attacks, but they say it shows that terror networks have found a way to transfer assets without easy detection.

    Related: Sony’s PlayStation 4 could be terrorists’ communication tool, experts warn

    “The bitcoin universe is decentralized by design,” according to Juniper Research, a firm that identifies online market trends. “They’re built by random players around the world. They’re transferred seamlessly via nameless digital wallets.”

    Cybersecurity expert Morgan Wright, a senior fellow at the Center for Digital Government, a national research and advisory institute on information technology policies, says terrorists are increasingly utilizing 21st century technology to transfer assets and finance operations

    “Terrorists need anonymity,” Wright said. “Countries have gotten very good at tracking terror financing in the years since 9/11. Networks have looked for new ways to do it, and it appears they’ve found it in bitcoin.”

    Related: Anonymous declares ‘war’ on ISIS, vows cyberattacks

    Government officials have become increasingly concerned about these unregulated financial systems, and the U.S. is starting to apply money laundering regulations to cyber currencies. Firms that issue or exchange bitcoin are required to maintain records and report transactions of more than $10,000.

    Individual states, too, are passing laws designed to regulate bitcoin exchanges. New York recently enacted a regulatory framework, and California will start governing the exchanges next year. “The U.S. government is working with a broad coalition of governments around the world to disrupt ISIL’s financing and to sever its access to the international financial system,” a Treasury Department official told Fox News.

    Related: Why darknets are murky recesses of the hidden Web

    But few foreign nations, have specific regulations that govern bitcoin use. The European Commission is expected to release regulations by 2017 that would affect European Union nations.

    Bitcoins, meanwhile, are increasingly becoming mainstream. Following requests from donors and financial advisers, Fidelity Investments announced last week that its charitable fund will permit bitcoin donations. Last year, the online retailer overstock.com started accepting payments in bitcoin. Dell, Microsoft, Expedia and DISH Network also allow bitcoin payments.

    There were 1.3 million bitcoin users last year, according to Juniper Research. It estimates there will be 4.7 million users by the end of 2017.

    Heather Nauert currently serves as a news anchor for FOX News Channel (FNC) and also provides viewers with the top headlines of the day during FOX & Friends (weekdays 6-9AM/ET). Nauert originally joined FNC in 1998 and rejoined as an anchor in 2007.

    Posted by participo | November 25, 2015, 11:53 pm
  6. The investigation of Coin.mx, the bitcoin trading platform charged with facilitating money-laundering, especially for purveyors of ransomware, now includes the indictment of the former head of the credit union that the people behind Coin.mx eventually took over to facilitate the scheme. Considering that this same criminal network also conducted an extensive major hack of JP Morgan’s customer records, there’s a good chance this is one of those cases that could go in a lot of different directions, which raises the question: is the Coin.mx investigation going to take a look at Ron Paul? It seems possible. After all, when Ron Paul finally came around to Bitcoin in 2015, it was Coin.mx that held his hand:

    Coin Telegraph

    After 40 Years of Looking, Ron Paul Finds Bitcoin

    Amanda B. Johnson

    2015-05-05 08:58 PM

    Ron Paul started talking about the serious problems of the Federal Reserve system in the 1970s. In his words, the ability to control the supply of money was “throughout history, the most sought-after monopolistic power of man” (below). He was generally greeted by the sound of crickets, both by fellow politicians and practically everyone else.

    Like most in Austrian economics (the economic school of thought Paul espouses), he saw the remedy to Fed-caused depressions and recessions as precious metals — a return to gold and silver currencies. “End the Fed” became both a mantra and a best-selling book title released by Paul during his 2008 and 2012 presidential campaigns.

    But Paul’s political career did not result in the legal abolition of the Fed. Not even close. Not by a long shot. But it did leave a large portion of an entire generation hungry for a new money — an alternative currency — as a way to, as some put it, “Ignore the Fed.”

    And then it came: Bitcoin.

    Paul was first asked about his views on Bitcoin in early 2013. He was generally unfamiliar with blockchain technology, and famously said, “If I can’t put it in my pocket, I have reservations.” But unlike so many Luddites, Paul didn’t dismiss Bitcoin for good. He just held back from making decisive statements. (In other words, he did what intelligent people do when they know they’re under-informed about something.)

    Many of Paul’s supporters took his reticence about Bitcoin as a signal to return to their go-gold-or-go-home stance. Others said that Paul would come around eventually, once he’d gotten an education in cryptocurrency.

    It now seems that the latter were correct.

    Voices of Liberty (formerly the Ron Paul Channel) recently released the interview below, which features Paul and a representative from Coin.mx bantering about crypto. The interview is actually a three-part series, and Paul reveals himself as having done a great deal of Bitcoin homework between 2013 and now.

    This interview series marks a serious shift in the “sound money” movement that Ron Paul is largely responsible for. Though he lobbied unsuccessfully to “end the Fed” for decades, it would seem that his personal economic beliefs were proven true in the end: governments don’t solve problems. Markets do.

    Voices of Liberty (formerly the Ron Paul Channel) recently released the interview below, which features Paul and a representative from Coin.mx bantering about crypto. The interview is actually a three-part series, and Paul reveals himself as having done a great deal of Bitcoin homework between 2013 and now.”
    Yep, Ron Paul’s Bitcoin baptism was declared to the world via a series of interviews about Bitcoin from a Coin.mx representative. In May 2015. It wasn’t the best timing:

    Forbes
    Was Ron Paul Hanging Out With Bitcoin Exchange Of Accused JPMorgan Hacker?

    Thomas Fox-Brewster ,
    Forbes Staff
    Nov 11, 2015 @ 11:00 AM

    An indictment unsealed yesterday charged Gery Shalon, an Israeli citizen and resident, with a range of online crimes, including the biggest ever customer data theft from a US financial institution – 83 million users’ details from JPMorgan Chase.

    The filing from the US Attorney in Atlanta also asserted Shalon was behind a criminal Bitcoin exchange, Coin.mx, which went out of action in July after it was accused of laundering money (Coin.mx is no longer operational and could not be contacted for comment). Bizarrely, just before the closure of the site but months before prosecutors claimed Coin.mx was knowingly used by Shalon and his partners to funnel money from a cornucopia of criminal activity, two-time Republican presidential candidate Ron Paul carried out a three-part interview with a social media expert contracted by the exchange.

    The interview is essentially a primer on Bitcoin and a little slice of pro-libertarian, pro-Coin.mx propaganda, with both sides decrying financial regulation, but in light of the charges now facing Shalon, it may be that Paul was really used to bring some legitimacy to one arm of an alleged multifaceted criminal campaign that prosecutors claimed earned its perpetrators hundreds of millions of dollars.

    It might not have been the first time Paul was seen hanging with the Coin.mx crowd. One of the men allegedly involved with Coin.mx was Anthony Murgio, who prosecutors said ran the Florida-based firm from the U.S., as Shalon sent the orders from Israel. What appears to be Murgio’s LinkedIn page includes a photo with a man who looks much like Paul (he hadn’t confirmed or denied it at the time of publication).

    In 2013, the Murgio who used that LinkedIn profile registered a large number of sites to do with Bitcoin, including a 365coinexchange.com, bcoinbarter.com, bcoinbuzz.com, bcoindepot.com, bcoinmarket.com, bcoinshop.com, bcoinstore.com, bcoinworld.com, buybitcoinswithpaypal.com, ichangexchange.com and icoinmarket.com. This year, it appears he was more interested in delivering weed via drone too, registering chronicdrone.com, dopedronedelivery.com, highflydelivery.com and toastydrone.com, amongst others.

    If Coin.mx was simply a way for Shalon to make more profit from criminal escapades, he went to great lengths to make it look like the real deal, which may have included charming the former Republican Congressman.

    Those efforts stretched to substantial PR efforts and some sneaky business practices, according to public records and the indictment. The company, set up in 2013, was ostensibly represented at Bitcoin conferences and across Twitter by social media consultancy SM3. Paul’s interviewee, another Florida resident Ania Amador, claimed in the jovial confab that she’d “been with Coin.mx since 2013”, though her LinkedIn page indicates she has never worked for Coin.mx, and in 2013 was CEO of SM3, a service she set up in 2010.

    I’ve emailed both Paul’s team and Amador, but neither had offered a response at the time of publication. Questions remain around how much they knew about Coin.mx’s activities. There’s no evidence they knew of anything untoward.

    The Collectables Club

    According to the indictment, the exchange was operated through a phony company called “Collectables Club” [sic] as the criminals sought to trick authorities into believing the organization offered a members-only area for discussing and selling collectible items, from stamps to sports memorabilia, according to the indictment. That court filing also claimed that in 2014, Shalon’s co-conspirators acquired control of a federal credit union, installed people on the board of directors and transferred coin.mx’s banking operations to the union. That was then used as a “captive bank” for unlawful business, prosecutors claimed.

    The Coin.mx website, still accessible over the Wayback Machine, showed it was a relatively slick affair, even if the language was somewhat sloppy.

    Its Facebook page, which had garnered just over 15,000 likes, described the firm as “an American-based money exchange that allows you to buy, sell, and exchange digital money such as Bitcoins, Litecoins, and more”. Both the Coin.mx homepage and the Facebook page listed the company’s address as 2591 Dallas Pkwy, Frisco, TX 75034, even though the alleged operators were based in Florida.

    All this was enough to convince Bitcoin owners, whether legitimate or criminal, to use the service. Between October 2013 and January 2015 it handled $1.8 million in Bitcoins on behalf of tens of thousands of customers, said the U.S. Attorney’s Office for the Southern District of New York.

    The site was used to exchange Bitcoins for cash for all kinds of criminal activity, prosecutors claimed. Intriguingly, the U.S. Attorney accused Coin.mx of knowingly exchanging cash for Bitcoins derived from ransomware attacks, where criminals infect people’s PCs or smartphones, lock their files away using encryption and demand payment to unlock them. In the case of Coin.mx, it was said to have delivered dollars to those behind the Cryptowall ransomware, a particularly nasty strain of malware targeting Microsoft Windows PCs.

    According to the indictment, Coin.mx was used alongside other illegal payments firms IDPay and Todur. These were allegedly run by Shalon and Ziv Orenstein, two of the three named in the indictment filed in Atlanta alongside Joshua Samuel Aaron, to handle money from unlawful pharmaceutical sales, fake and malicious anti-virus software, a range of illegal online casinos and dollars coming in from the Bitcoin exchange. Shalon and his colleagues were said to have run at least 12 unlawful online casinos, hacking into competitors to steal customer databases, or hitting them with Distributed Denial of Service (DDoS) attacks after “perceived misconduct” on his own casino sites.

    Coin.mx was, according to the indictment, a small part of a massive cybercrime operation, which, along with the huge JPMorgan breach, saw one financial firm hacked via the Heartbleed bug, attacks on providers of operating software for casinos, and collusion with corrupt international bank officials. One co-conspirator, said the court filing, described the operation as a payment processing, casino, software and pharma “cocktail”.

    The cases against Coin.mx and its related businesses are a startling reminder of just how wide criminal networks can stretch.

    “The filing from the US Attorney in Atlanta also asserted Shalon was behind a criminal Bitcoin exchange, Coin.mx, which went out of action in July after it was accused of laundering money (Coin.mx is no longer operational and could not be contacted for comment). Bizarrely, just before the closure of the site but months before prosecutors claimed Coin.mx was knowingly used by Shalon and his partners to funnel money from a cornucopia of criminal activity, two-time Republican presidential candidate Ron Paul carried out a three-part interview with a social media expert contracted by the exchange.
    Yeah, Ron’s timing could have been better. That is, unless it was great timing…for Coin.mx’s credibility:


    The interview is essentially a primer on Bitcoin and a little slice of pro-libertarian, pro-Coin.mx propaganda, with both sides decrying financial regulation, but in light of the charges now facing Shalon, it may be that Paul was really used to bring some legitimacy to one arm of an alleged multifaceted criminal campaign that prosecutors claimed earned its perpetrators hundreds of millions of dollars.

    It might not have been the first time Paul was seen hanging with the Coin.mx crowd. One of the men allegedly involved with Coin.mx was Anthony Murgio, who prosecutors said ran the Florida-based firm from the U.S., as Shalon sent the orders from Israel. What appears to be Murgio’s LinkedIn page includes a photo with a man who looks much like Paul (he hadn’t confirmed or denied it at the time of publication).

    So was Ron Paul’s big splash into the world of Bitcoin, in part, an attempt to legitimize one component of a vast criminal enterprise or was he just the right useful idiot at the right time? Either seems possible, although, from an Occam’s Razor standpoint, perhaps useful idiocy is a little more possible. It’s a reminder that when useful idiocy is the lesser of two evils, legacies of lunacy can suddenly become extra useful.

    At least there’s one less enterprise out there for ransomware peddlers and other criminals to launder their bitcoins. Let’s hope that gives the people currently Ransomware-ing hospitals at least a bit of a headache.

    Posted by Pterrafractyl | March 23, 2016, 6:50 pm
  7. While criminal activity has long been one of the earliest potential applications of Bitcoin and factors driving demand for the currency, it turns out there’s one particular Bitcoin-facilitated online criminal activity that might actually be generating bitcoin demand from all sorts of legitimate business in anticipation that they will need to participate in that criminal activity. Involuntarily:

    MIT Technology Review

    Companies Are Stockpiling Bitcoin to Pay Off Cybercriminals

    Tom Simonite
    San Francisco Bureau Chief
    June 7, 2016

    Digital currency Bitcoin is variously promoted as an alternative to gold, a good way to make international transfers, or the future of e-commerce. New research suggests that companies are now stockpiling Bitcoin for a different reason: so they can pay up quickly if their data is held ransom by malicious software.

    Ransomware, as it is called, has locked up the data of huge numbers of individuals and businesses in recent years. Many of them, including police departments and hospitals, have opted to pay up to get their data back.

    A small survey by corporate networking company Citrix indicates that some IT professionals are even stockpiling bitcoins so they can pay up quickly in the event ransomware strikes their network. Out of 250 IT and security workers at U.K. companies with more than 250 employees, a third said they were stockpiling the currency. A researcher at Cornell recently tweeted that the university’s treasurer created an account with the Bitcoin exchange Coinbase so as to be ready if ransomware struck.

    Almost half of respondents in the Citrix survey said that company data was not backed up at least daily. Security experts advise that backups are the best defense against ransomware and generally discourage paying off ransomware, since it encourages the industry.

    Just how many companies are setting aside ransom money in advance is probably hard to know because it’s something they may be loath to advertise. Acknowledging that you are ready to pay—and perhaps don’t have a good backup system—could attract the attacks this policy is designed to handle.

    “A small survey by corporate networking company Citrix indicates that some IT professionals are even stockpiling bitcoins so they can pay up quickly in the event ransomware strikes their network. Out of 250 IT and security workers at U.K. companies with more than 250 employees, a third said they were stockpiling the currency. A researcher at Cornell recently tweeted that the university’s treasurer created an account with the Bitcoin exchange Coinbase so as to be ready if ransomware struck.”
    A third of the corporations in the survey said they were stockpiling bitcoins just so they could quickly pay off ransomware attacks? Well, now we know that the Bitcoin community knows that the mere threat of ransomware is increasing corporate demand for Bitcoins. And that means ransomware might be morphing into one of Bitcoin’s best means of making inroads into the business community. Yikes. Watch out for those unexpected email attachments.

    Posted by Pterrafractyl | June 8, 2016, 5:43 pm

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