The U.S. Justice Department yesterday asked a federal court to reverse a decision that Apple is not required to help open a locked iPhone, according to Business Insider. The ruling in question was issued by a U.S. judge in New York. It favors Apple in its objection to complying with an order to assist the government in accessing data from a phone used in the San Bernardino, Calif. terror attack.
Monday’s request comes a week after U.S. Magistrate Judge James Orenstein issued a decision in an unrelated drug case that undermines the Justice Department’s action against Apple.
Government lawyers said Monday said the request is not about asking Apple to do anything new or create a master key for iPhones. The prosecutors cited examples in which Apple has gained data from locked devices under the law.
Apple Challenges The Order
Apple has opposed the government’s demand to assist in the San Bernardino terrorist attack that killed 14 people on Dec. 2. Apple’s stance in that case has ignited a nationwide debate on digital privacy rights versus national security. Apple claims the government is seeking unprecedented power through the courts and undermining the company’s constitutional rights.
The Brooklyn, N.Y. case is less demanding on Apple. The extraction technique works on older iPhones and has been used in numerous instances to assist investigations.
Both the New York and California cases rest on the government’s interpretation of the All Writs Act.
The New York case presents a new challenge to federal courts that have been tasked with determining how a law that has been used to help investigators in the past complies with encryption and privacy in the digital age.
Feds Challenge Judge’s Ruling
The government Monday claimed that U.S. Magistrate Judge James Orenstein’s New York ruling is an “unprecedented limitation on” judicial authority and that the legal analysis goes “far afield of the circumstances of this case.” The government further noted that it has no adequate alternatives to gain Apple’s assistance since trying to guess the passcode would result in the phone’s auto-erase security feature.
Federal prosecutors gave several examples where Apple extracted data from a locked device while complying with the law. These examples included a New York child exploitation case, a Florida narcotics case and an exploitation case in Washington state.
Apple, in response, said Orenstein ruled that the FBI’s request would undermine fundamental Constitutional principles. Apple said it shares the judge’s concern that misuse of the All Writs Act would lead to a slippery slope that threatens everyone’s privacy and safety.
Orenstein in October invited Apple to contest the government’s use of the 1789 law that called on the company to assist the government in gaining iPhone data in criminal cases. Lawyers have since said Apple has opposed requests to help gain information from a dozen iPhones in New York, California, Massachusetts and Illinois.
In California, officials are seeking access to a phone used by the shooter Syed Farook but owned by San Bernardino County, where Farook was a health inspector.
FBI Keeps Pressing Apple
FBI Director James Comey told a Congressional panel last week the government wanted Apple to “take the vicious guard dog away and let us pick the lock” on the phone. If Apple creates the software to enable the FBI to hack the iPhone in California, Comey said it will take 26 minutes to do a “brute force attack,” testing numerous passcodes in fast succession.
Apple claimed that being coerced to get information from the phone could threaten the trust between the company and its customers, thereby tarnishing the company’s brand.
Jamie Dimon May Hate Bitcoin, but J.P. Morgan Is Embracing Blockchain
J.P. Morgan Chase CEO has made it abundantly clear that he hates bitcoin, but that hasn’t stopped his firm from adopting the technology that underpins the digital currency system.
J.P. Morgan Launches Pilot Program
On Monday, America’s biggest bank rolls out the next phase of its blockchain pilot program. The effort will facilitate a faster, more secure transfer of cross border payments between J.P. Morgan and other banks, including Royal Bank of Canada and Australia and New Zealand Banking Group.
Although the new program will not trade cryptocurrency, it will use the landmark record-keeping technology that underpins it. The Wall Street Journal reports that J.P. Morgan will use the same blockchain technology behind digital currency Ethereum.
Despite widespread concern over cryptocurrency, financiers are enamored with blockchain. They, like many others, say the technology can significantly increase the speed of cross-border payments. The system currently in place is extremely complex, and requires multiple streams of communication between various participants. The blockchain has the potential to cut down transaction time from as much as 15 days to mere hours.
The pilot program aims to achieve a secure distributed ledger across financial institutions, enabling banks to work together to process transactions. Connecting transaction data through a shared network will greatly reduce the number of steps it takes to verify and process transactions.
J.P.’s embrace of blockchain doesn’t mean he’s going to warm up to cryptocurrency. His latest criticism of bitcoin came on Friday when he said it had “no actual value” and that “governments are going to crush it.” He did, however, give a glowing review of blockchain.
“We actually use it. It will be useful for a lot of different things,” Dimon said at a conference in Washington, as quoted by The Wall Street Journal. “God bless the blockchain.”
Featured image courtesy of Shutterstock
Cryptocurrency Adoption Will Lead to Free Money Transfers, According to Top Tech Investor
The rapid adoption of cryptocurrency will soon pave the way for free global money transfers, according to a top technology investor.
Cathie Wood, the CEO of Ark Invest, says cryptocurrencies like bitcoin are going to spearhead a system of free money transfers worldwide. She cites the already huge reduction in conversion fees from fiat currencies into crypto and back again. The current rate for those transactions is 2-3%, which is a fraction of the 7-8% money transfer services like Western Union charge.
But Wood says crypto transfer fees could soon fall to zero as companies prioritize valuable transaction information above anything else.
The cryptocurrency market approached record highs over the weekend, hitting a total value of $176.6 billion. Bitcoin’s market cap surged above $90 billion last week and reached a high of $96.7 billion recently. That surpassed the capitalization of major equities like Goldman Sachs and Morgan Stanley.
If bitcoin were a stock, it would be the 15th largest member of the Nasdaq and the 58th largest on the New York Stock Exchange.
Computing Power as a Commodity
In Wood’s view, that the growing value of cryptocurrency will lead to the commoditization of bandwidth and computing power.
“It’s interesting that you’ve got corn and oil and copper trading on the exchange but you don’t have computing power, and bandwidth, and storage,” Wood said, according to CNBC. “Well we think that’s going to happen because of blockchain technology and all of the cryptos that are coming along.”
Woods has placed special emphasis on Ethereum, a unique platform that operates more like a “cryptocommodity” than anything else.
Ark Invest is the author of the widely cited whitepaper, Bitcoin: A Disruptive Currency. In it, the firm argues that cryptocurrency has the potential to be the most disruptive development since the Internet. The investment manager controls $1.7 billion of asset funds focused exclusively on emerging technologies.
Featured image courtesy of Shutterstock
Jamie Dimon Doesn’t Want to Talk About Bitcoin Anymore
Jamie Dimon doesn’t have anything to say about bitcoin anymore. The head of J.P. Morgan Chase & Co has been heckled by the blockchain community since he declared cryptocurrency to be a “fraud,” and that he would fire any employee trading it for being “stupid.”
Bitcoin’s New Record
Dimon also doesn’t think much of bitcoin’s new record high. The virtual currency spiked more than 8% on Thursday to surpass $5,200.00 for the first time.
“I wouldn’t put this high in the category of important things in the world, but I’m not going to talk about bitcoin anymore,” Dimon said Thursday, as noted by Bloomberg.
J.P. Morgan has taken a less adversarial approach to cryptocurrency. In addition to handling bitcoin-related trades – something that came to light after Dimon’s warning – the financial giant is keeping its options open. J.P. remains “very open minded” to possible uses of cryptocurrencies “if they are properly controlled and regulated,” according to Chief Financial Officer Marine Lake.
Mainstream Appeal Growing
The growth and widespread adoption of cryptocurrency hasn’t been lost on the financial community. Earlier this month, Goldman Sachs CEO Lloyd Blankfein tweeted that his firm is weighing the possibility of trading cryptocurrency.
Fidelity Investments is also mining cryptocurrency, and making a lot of money doing it. Fidelity says its chief motivation for mining isn’t profit, but learning about the growing cryptocurrency market.
Increased mainstream adoption of bitcoin is seen by many as a necessary precursor to a more stable currency. Countries like Japan are spearheading adoption by introducing favorable regulation of the cryptocurrency space. But regulatory approval has not been uniform.
Russia recently became the third major economy in the span of a month to put the clampdown on cryptocurrency trading. China and South Korea have also implemented new controls on the market, focusing heavily on initial coin offerings.
Featured image courtesy of Shutterstock
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