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Former Nuclear Scientist Pleads Guilty To Attempting Spear Phishing U.S. Government Employees

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Charles Harvey Eccleston, 62, a former U.S. government scientist, has pleaded guilty to a federal offense for an attempted e-mail “spear-phishing” attack in January 2015 targeting Department of Energy (DOE) employee email accounts. He pled guilty to attempted unauthorized access and intentional damage to a government computer. He also pled guilty to criminal forfeiture.

 

According to documents filed in the U.S. District Court for the District of Columbia, Eccleston caused or attempted to cause damage to a computer without authorization.

“Eccleston admitted that he attempted to compromise, exploit and damage U.S. government computer systems that contained sensitive nuclear weapon-related information with the intent of allowing foreign nations to gain access to that information or to damage essential systems,” said Assistant Attorney General for National Security John P. Carlin, according to a U.S. Department of Justice release.

Justice Official Thanks FBI

“This prosecution underscores our commitment to prosecute those who carry out or plan cyber-attacks against our government, whether they are in the United States or in remote locations overseas,” said U.S. Attorney Channing D. Phillips of the District of Columbia U.S. Attorney Phillips. “Thanks to the work of the FBI, this former federal employee was arrested before he could do any damage and he now is being held accountable for actions that could have threatened our national security.”

Eccleston worked as a scientist for the Nuclear Regulatory Commission (NCR) and the Department of Energy (DOE), according to court documents. In this role, he had a security clearance granting him access to nuclear energy program information. He left his position in 2010 and moved to the Philippines in 2011.

Eccleston Offers Email List

In April of 2013, Eccleston visited a foreign nation’s embassy in Manila and told them he had secret U.S. government information he wished to sell them. He offered a list of 5,082 email accounts of U.S. energy agency employees, engineers and officials in exchange for $18,800.

Asked the benefit of this information, Eccleston said the addresses were top secret and were used for official correspondence between employees and officials.

Asked what he would do if the country was not interested in the information, Eccleston said he would offer it to Iran, China or Venezuela. He provided the embassy official a contact email and a code to use if they wanted to pay him.

FBI Goes Undercover

The embassy official informed the FBI. An FBI agent then contacted Eccleston posing as an intelligence agent for the foreign country.

Meeting at a hotel in Manila on Nov. 7, 2013, Eccleston told the undercover FBI agent that he held a top secret security clearance and worked on top secret projects. He said he had previously tried to sell U.S. government information to China and Venezuela but did not get access to officials from those countries.

Eccleston showed the agent a list of about 5,000 email addresses and names of NRC employees and offered to sell it for $23,000. He said the addresses could be used to insert a virus into NRC computers.

He also said emails could be sent to these accounts to shut down NRC servers. He offered to develop and implement such a plan. He gave details about how he would do this.

Eccleston further suggested the agent could re-sell the addresses to Hezbollah.

He told the agent that if he did not get back to him in 60 days, he would sell the information to the French.

The undercover agent agreed to buy a thumb drive containing about 1,200 NRC employee email addresses. The agent gave him $5,000 for the addresses and another $2,000 for expenses.

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

Phishing Attack Planned

Eccleston met with a second undercover agent on June 24, 2014 in a Manila hotel. This agent paid him $2,000 for his travel time. Eccleston said he had a list of 30,000 email accounts at the DOE that contained every scientist and engineer responsible for designing, researching and building U.S. nuclear weapons. He repeated his plan for conducting a cyber attack on a U.S. government agency.

During this meeting, Eccleston agreed to pursue the plan in exchange for $1,000 for each recipient who received an infected email.

In July of 2014, Eccleston sent documents to the undercover agent using a cloud-based file service. One document contained a chart including names, email addresses, and identified positions of 55 DOE employees. It included an assessment of the type of information to which the individuals had access.

Malicious Software Implanted

In January of 2015, Eccleston asked the undercover agent for a link to a malicious computer code to plant into an email he had drafted. He later sent the agent a different version of the email containing the link the agent had provided him to about 80 DOE employees. He believed he would receive about $80,000 for this activity by the foreign country.

A search of the DOE servers confirmed the email reached the intended recipients at Oak Ridge National Laboratory in Tennessee, Los Alamos National Laboratory and Sandia National Laboratory, both in New Mexico, Lawrence Livermore National Laboratory in California, and the DOE in Washington, D.C.

Analysis revealed the email addresses Eccleston provided were publicly available.

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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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Cryptocurrencies

Crypto Pump and Dumps Have Generated $825 Million in Activity This Year: WSJ

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Price manipulation involving ‘pump and dump’ schemes are alive and well in the cryptocurrency market. According to new research by The Wall Street Journal, organized cryptocurrency groups have generated at least $825 million in trading activity over the past six months.

Pump Groups Thrive in Nascent Crypto Market

In a comprehensive review of trading data and online communications among crypto traders between January and July, WSJ identified 175 pump and dump schemes spanning 121 different coins. Among the 50 pumps with the biggest increase in price, nearly half had lost their value.

Among the dozen pump groups analyzed by WSJ, Big Pump Signal and its 74,000 Telegram followers have had the biggest impact on markets. The group engineered 26 pumps resulting in $222 million in trades.

Pump schemes have exploded over the past 18 months as initial coin offerings (ICOs) garnered mainstream attention. More than $12 billion has flowed into coin offerings since January 2017, according to ICOData.io, inviting a new form of speculation in markets that remain largely unregulated to this day.

Analysts say most pump and dumps following a similar pattern: the group announces a time and exchange for a pump; at the set time, traders execute the signal, creating a short-term buying frenzy; after a set time (usually a few minutes), the coin is sold for instant profit.

One of the biggest pumps in recent memory came in early July after Big Pump Signal commanded its followers to buy cloakcoin (CLOAK), an obscure cryptocurrency that purports to be “fully private, secure and untraceable.” After the call was made, CLOAK spiked 50% on Binance before plummeting more than 20% after two minutes.

Stopping the Fraud

Although the pump and dump is one of the oldest forms of market fraud, regulators have struggled to stem the practice. As WSJ reports, similar practices were banned in the 1930s, but that hasn’t stopped pump and dumps from proliferating at different points in history. Jordan Belfort, whose life was chronicled in the movie “Wolf of Wall Street,” pleaded guilty in 1999 for running pump and dumps costing investors more than $200 million.

The U.S. Securities and Exchange Commission (SEC) regularly deals with pump and dumps in the stock market, but has yet to bring a case involving cryptocurrencies. In the meantime, the U.S. Commodity Futures Trading Commission (CFTC) has offered a reward for anyone who warns the agency about potential pump and dump schemes involving cryptocurrencies.

“If you have original information that leads to a successful enforcement action that leads to monetary sanctions of $1 million or more, you could be eligible for a monetary award of between 10 percent and 30 percent,” a CFTC memo, released in February, read. That translates into a potential reward of at least $100,000.

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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4.6 stars on average, based on 548 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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Breaches

MyEtherWallet Compromised in Security Breach; Users Urged to Move Tokens

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Popular cryptocurrency service MyEtherWallet (MEW) is urging users to move their tokens after the platform succumbed to its second cyber attack of the year. As the company reported earlier, hackers targeted MEW’s popular VPN service in an attempt to steal cryptocurrency.

Hola VPN Users Compromised

Rather than target MEW directly, hackers took control of the Hola VPN service, which claims nearly 50 million users. For the next five hours, MEW users who had the Hola chrome extension installed and running on their computer were exposed.

MEW took to Twitter to urge users to move their funds immediately.

“Urgent! If you have Hola chrome extension installed and used MEW within the last 24 hrs, please transfer your funds immediately to a brand new account!” the company said. It added the following message shortly thereafter:”We received a report that suggest Hola chrome extension was hacked for approximately 5 hrs and the attack was logging your activity on MEW.”

At the time of writing, MEW’s Twitter feed had no further updates.

MyEtherWallet is used to access cryptocurrency wallets, where users can send and receive tokens from other people.

The company reportedly told TechCrunch that the attack originated from a Russian-based IP address.

“The safety and security of MEW users is our priority. We’d like to remind our users that we do not hold their personal data, including passwords so they can be assured that the hackers would not get their hands on that information if they have not interacted with the Hola chrome extension in the past day,” MEW said, as quoted by TechCrunch.

It’s not yet clear how many users were compromised in the attack or how much, if any, was stolen from their wallets. MEW suffered a similar incident in February after a DNS attack wiped out $365,000 worth of cryptocurrency from users’ accounts.

Cyber Attacks on the Rise

The attack on MEW came less than 24 hours after Hacked reported another major cyber breach involving Bancor, a decentralized cryptocurrency exchange. The security breach compromised roughly $23.5 million worth of digital currency, including Ethereum, NPXS and BNT, Bancor’s native token.

Last month, a pair of South Korean exchanges fell prey to cyber criminals, prompting local regulators to expedite their approval of new cryptocurrency laws.

It has been estimated that a total of $761 million has been stolen from cryptocurrency exchanges in the first half of the year, up from $266 million in all of 2017. That figure is expected to rise to $1.5 billion this year.

CipherTrace, the company behind the estimates, told Reuters last week that stolen cryptocurrencies are mainly used to launder money and aid criminals in concealing their identities.

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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4.6 stars on average, based on 548 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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Breaches

Mt. Gox vs. Bithumb: That Was Then, This Is Now

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Bithumb now shares something in common with the Tokyo-based shuttered bitcoin exchange Mt. Gox — both suffered a hack on about the same date, June 19. It’s a club that no exchange wants to belong to and that Bithumb happened on the seven-year anniversary of Mt. Gox’s maiden attack has to be more than an eerie coincidence.

It’s a stark reminder of the risks involved with keeping funds on an unregulated exchange, vulnerabilities that cost South Korea’s Bithumb some $36.6 million in digital cash and Mt. Gox $450 million in hacked bitcoin and its future. The Mt. Gox theft unfolded over a series of hacks that culminated in 2014. Though it’s still early on in the Bithumb hack, it appears the South Korean exchange will recover from the security breach. So what do we know now that we didn’t on June 19, 2011?

Then vs. Now

Former Coinbase official Nick Tomaino, who is also the founder of crypto fund 1 confirmation, reflected on the Mt. Gox hack in what proved to be a prescient tweet given the Bithumb attack that was about to surface.

The thing to note about Mt. Gox is that the Japan-based exchange in 2011 controlled most of the BTC trading volume, approximately three-quarters of it by average estimates — more if you ask Tomaino. Since bitcoin fever caught on in 2017, there are more than 500 cryptocurrency exchanges on which trading volume is shared. Binance boasts the highest trading volume and captures nearly 15% of bitcoin trading. It’s much less than Mt. Gox days but still a little high.

The other thing to note is that the Mt. Gox hack or actually hacks, as there were multiple attacks on the exchange over several years, was a mysterious event that was shrouded in controversy and mistrust of a key executive. Bithumb, on the other hand, confronted the hack seemingly right away on Twitter and has not let any grass grow under its feet in the interim, which is a key difference in the way Mt. Gox was handled.

Also, the bitcoin price didn’t tank in response to the Bithumb hack. It traded lower for a while, but less than 24 hours it was back in the green, which is a reflection of the fact that bitcoin trading is no longer dependent on a single exchange.

Charlie Lee, creator of Litecoin (LTC), the No. 6 cryptocurrency by market cap, was among the first to respond to the Bithumb hack. He tweeted:

Indeed, Bithumb does expect to be able to cover the losses via their reserves.

Crypto Security

It’s still early on in Bithumb’s security breach, and more details are sure to emerge in time. In the meantime, it’s a good idea to use the hack as an opportunity to examine the security of your cryptocurrency investment portfolio. There are several hardware wallet options out there for you to choose from — whether it’s Trezor or Ledger Nano S, to name a couple — and as Charlie Lee advised, “only keep on exchange coins that you are actively 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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4.6 stars on average, based on 37 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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