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Cyber Warfare: The New Arms Race

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After spending billions to build nuclear weapons, a different arms race has emerged in cyber warfare. Where the nuclear arms race pits the larger countries against each other, the cyber arms race includes a much larger number of combatants since it is open to almost anyone with cash and a computer, according to a front-page article in the Wall Street Journal.

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The article noted that computer attacks by countries against each other have kicked off a frantic digital arms race with nations racing to develop stockpiles of malicious code.

One reflection of the seriousness of this new arms race is that two longtime cyber adversaries, the U.S. and China, agreed last month not to conduct certain cyber attacks against one another.

Cyber Arsenal Has Multiple Offerings

cyberwar

There are a multitude of weapons in a cyber arsenal.

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Some of the types of attacks that counties can use include denial of service, sleeper malware, phishing, tricking radar and infrastructure sabotage. The major players in this new cyber warfare include the U.S., Russia, China, Iran and North Korea. But other countries are becoming more active.

Nuclear rivals Pakistan and India regularly hack one another’s companies and government. Estonia and Belarus are developing shields against Russia. In addition, Denmark, the Netherlands, Argentina and France have begun to develop offensive computer weapons.

At least 29 nations have military or intelligence groups focused on offensive hacking. The Wall Street Journal based this assessment on government records and interviews with government officials.

Around 50 countries have purchased off-the-shelf hacking software for surveillance purposes.

Where the “MAD” acronym – mutually assured destruction – characterized the nuclear arms race, that acronym stands for “mutually assured doubt” in the cyber arms race, according to one researcher, because you can never be sure what attack will occur.

Governments have used computer attacks to accomplish many tasks, such as stealing information, erasing computers, disabling financial networks and in one case destroying nuclear centrifuges.

Governments have explored using cyber weapons to destroy utility grids, undermine airline networks, interrupt Internet connectivity, confuse radar systems and remove funds from bank accounts.

Small Players Can Compete In This War

This new type of warfare evens the playing field between large and small countries, the report noted since cyber attacks are hard to prevent and trace.

Cyber weapon access is more widespread than nuclear weapon access, due to less costly technologies and distributed computing.

Most government-initiated cyber attacks involve cyber spying, which refers to breaking into computer networks to steal data. The more aggressive cyber weapons can erase computer records and destroy physical property.

The U.S. is most concerned about cyber weapons held by China, Russia, Iran and North Korea since these nations have initiated advanced attacks into the U.S. government networks and large U.S. companies.

Cyber warfare units are often connected to a country’s military and/or its intelligence services.

Chinese hackers have established a reputation for low-tech “phishing,” the sending of disguised emails to get a company’s employees or a government’s bureaucrats to allow the attackers access to their computer networks. This is how the U.S. thinks the Chinese were able to recently penetrate the Office of Personnel Management that compromised more than 21 million people’s records.

Russians have focused on diplomatic and political data and have gained access to unclassified networks at U.S. government offices.

Russians have stolen the daily schedule of President Obama and State Department correspondence, according to sources, although the Russians denied this.

Russian attackers also try to hide stolen data in regular network traffic. A piece of malware in one instance conceals its communications in consumer web services to evade cybersecurity defenses.

Also read: Nuclear facilities are in ‘denial’ to the risk of a ‘serious cyber attack.’

Iran Plays Hard

Iranians have allegedly been able to destroy computers twice using cyber weapons. Investigators believe Iranian attackers placed a virus on computers of Saudi Aramco, Saudi Arabia’s largest company, in 2012. The attack erased three-quarters of the computers and replaced screen images with images of American flags burning.

Iran used malware to destroy computers at Las Vegas Sands Corp. last year, according to James R. Clapper, director of National Intelligence. The casino is owned by Sheldon Adelson, a major Iran critic.

Iran in 2012 announced the creation of the Supreme Council of Cyberspace, the purpose of which is to defend Iran’s computer networks and create new ways of attacking enemies’ computer networks.

North Korea destroyed computer files at the Hollywood film unit of Sony Corp. in 2014, according to U.S. officials, allegedly retaliating for a satirical movie about Kim Jong-Un, North Korea’s dictator. The FBI said North Korea implanted malware on Sony computers, enabling them to steal and destroy records.

Many cybersecurity experts consider the U.S. to have the most advanced cyber weapons.

Edward Snowden, the former National Security Agency contractor who famously leaked documents, showed NSA implanted malware on tens of thousands of foreign computers which gave the government access to data to control the power plant and pipeline systems. The U.S. Cyber Command at the Pentagon did respond to a request for comment.

The U.S. Cyber Command currently has nine mission teams and has plans for four more. Such teams include 60 military personnel to conduct cyberspace operations.

An attack on Hacking Team, an Italian company, showed the company sold surveillance tools to various countries.

National security officials and cyber weapon experts worry that a cyber-attack could eventually become problematic since there is a lot that is not known about what some countries are doing.

Images from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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Cybersecurity

Three Hours After Re-Launch, BitGrail Shuts Down Again

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Embattled digital currency exchange BitGrail has reportedly suspended operations a mere three hours after re-launching, a move that could signal the death knell for the controversial trading platform.

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BitGrail Shuts Down After Court Order

The Italian exchange received an order from the Court of Florence on Tuesday to cease operations immediately. BitGrail was open for all of three hours before the order was handed down. All cryptocurrencies that were previously supported on the exchange were available for trade with the notable exception of Nano XRB.

On Wednesday, BitGrail issued the following statement:

“This morning, following the re-opening, we were notified of a deed by the court of Florence requesting the immediate closure of BitGrail and this situation will persist until a decision is made by the courts, about the precautionary suspension request made by the Bonelli law office on behalf of a client.”

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A final decision by the court is scheduled for May 16 2018.

Embroiled in Controversy

The Italian exchange has been mired in controversy after 17 million Nano XRB tokens went missing in February. At the time, the total value of the theft was $170 million.

At the time, BitGrail said the shortfall was caused by “unauthorized transactions,” but didn’t indicate exactly when the hack took place.

A Twitter user by the name of “Francesco the Bomber,” who apparently runs the exchange, later confirmed that the funds were stolen and that the exchange didn’t have the capital to repay its customers. However, developers who used to work with Francesco claimed that the exchange was solvent long before the attack took place. This fact was concealed by BitGrail for as long as possible.

For its part, Nano XRB managed to recovery in the wake of the attacks, with prices reaching a high near $17 in early March. The cryptocurrency has nearly doubled in value over the last three weeks as part of a broader upward correction in the market.

The Nano Foundation has established a fund to assist BitGrail users affected by the attack. The Foundation says it will match donations to the fund for up to $1 million.

BitGrail was the second largest attack of a digital currency exchange this year. In January, cyber criminals made off with around $530 million worth of NEM tokens following an attack on Coincheck, a Japanese exchange.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 413 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Cybersecurity

Facebook Stock Has Best Day in Two Years as Zuckerberg Testifies

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Shares of Facebook Inc. (FB) gained on Tuesday, as CEO Mark Zuckerberg testified before U.S. lawmakers over allegations of data misuse.

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Zuckerberg Gets Likes

Mark Zuckerberg apologized and defended his company on Tuesday as he appeared before a joint U.S. Senate committee hearing. “It was my mistake, and I’m sorry,” the 33-year-old CEO said when questioned about Facebook’s misuse of user data.

Lawmakers grilled Zuckerberg on issues ranging from Facebook’s Cambridge Analytica scandal to its failure in addressing provocative messages during the most recent Myanmar crisis. He took it all in stride, appearing confident and poised throughout the question-and-answer period (at least, that’s what professional PR experts quoted by Bloomberg had to say).

Zuckerberg took full responsibility not just for Cambridge Analytica, but for Facebook’s negligence in safeguarding consumer data. That said, Republican Senator from Iowa Chick Grassley sent a strong signal that new regulations are on the way.

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“The status quo no longer works,” said Grassley, who chairs the Judiciary Committee. “Congress must determine if and how we need to strengthen privacy standards to ensure transparency and understanding for the billions of consumers who utilize these products.”

Wall Street Responds

The testimony resonated with Wall Street, as investors scooped up shares of the battered social media company. Facebook shares added 4.5%, their best in two years. By comparison, the S&P 500 Index gained 1.7% on Tuesday and the index’s technology component rose 2.5%.

The stock surge grew Zuckerberg’s personal fortune by $2.8 billion to $66 billion, according to Forbes. That makes him the world’s seventh richest person.

Despite the gain, FB is down almost 15% from its all-time high and its current price point lags behind the 50-day and 200-day moving averages. An RSI of 48 also signals weak underlying momentum for the social media stock.

Facebook’s Declining Usage

Facebook experienced a public backlash last month amid reports that a political research firm had scraped data on 87 million people. The revelation sparked a growing debate over Facebook’s privacy standards at a time when the company was battling a noticeable decline in usage.

The social media platform declined by roughly 50 million hours per day in the fourth quarter, or 5% overall. Meanwhile, independent research from a company named Edison found a steady drop in usage among Americans aged 12 and up.

While Zuckerberg has tried to spin the decline as a good thing, it’s apparent that the platform is experiencing fewer meaningful interactions, which partially explains recent efforts to transform the News Feed.

It remains to be seen how much damage the declines will do to top and bottom line results. Facebook is expected to report its quarterly earnings report Apr. 25. Analysts are expecting per-share earnings of $1.37 for the quarter, up from $1.04 the same time a year ago.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 413 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Cybersecurity

Facebook Admits It Has Failed to Protect User Privacy

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In the wake of the Cambridge Analytica scandal, Facebook has had to come clean about its privacy standards. The company recently admitted that the data on most of its 2 billion users could be compromised by malicious actors, a strong sign that the social media giant is not only misusing consumer data, but failing to protect it.

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Data on the Loose

Facebook recently announced that it has removed a feature that allows users to search for people using email addresses or phone numbers. The feature, which accounts for 7% of all searches in some regions, is being discontinued over fears that malicious users were using it to “scrape” profiles.

Mike Shcroepfer, the company’s chief technology officer, issued the following statement on Wednesday:

“Given the scale and sophistication of the activity we’ve seen, we believe most people on Facebook could have had their public profile scraped in this way. So we have now disabled this feature. We’re also making changes to account recovery to reduce the risk of scraping as well.”

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CEO Mark Zuckerberg told reporters that it was “reasonable to expect” that your information may have been accessed in this way.

The Cambridge Analytica scandal, which surfaced last month, blew the lid wide open on Facebook’s privacy standards. Since 2014, Cambridge Analytica legally obtained information on as many as 87 million Facebook users for the purpose of influencing elections. In the wake of the scandal, Zuckerberg is being summoned by U.S. Congress to testify before the House Energy and Commerce Committee, currently scheduled for Apr. 11. The CEO has acknowledged that his company made mistakes, but this has largely failed to resonate with Facebook’s growing list of critics.

Facebook Tanks

Many say that Facebook has suffered irreversible damage since the scandal was brought to light. Faced with declining usage, severed business ties and a severe backlash from the public, Facebook shares have tanked more than 16% over the last three weeks.

Prices have fallen below the 50-day and 200-day simple moving averages, with the short-term average converging on the longer one. An RSI in the low-30s makes a strong case for Facebook’s bearish downturn, although current levels indicate that an oversold bounce is likely.

FB’s share price shed another 0.7% on Wednesday even as the major indexes gained. The S&P 500’s information technology index rose 1.4%, capping off a solid recovery for the market.

Along with the other so-called FAANG stocks, Facebook has been largely responsible for the recent tech rollover and subsequent turbulence on Wall Street. Facebook, Apple, Amazon, Netflix and Google parent Alphabet lost a combined $324 billion in market cap between Mar. 12 and Apr. 2.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 413 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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