The U.S. Internal Revenue Service (IRS) has identified an automated attack on its computer systems that it says is aimed at getting information that could be used to steal tax refunds, The Wall Street Journal reported.
Identity thieves last month used personal taxpayer data stolen elsewhere to generate e-file personal identification numbers to file fraudulent tax returns and claim refunds.
Some individuals use E-file PINs to file tax returns. These numbers are different from identity protection numbers (PIN)s that the agency provides victims of tax ID theft to protect them from future problems.
464,000 Social Security Numbers
The agency has identified unauthorized efforts to gain e-file PINs for 464,000 Social Security numbers, of which 101,000 accessed an e-file PIN.
The agency said no personal taxpayer information was disclosed by IRS systems. It is advising affected taxpayers by mail that criminals used their personal information. The agency said it is protecting accounts from tax ID theft.
An IRS spokesman said identity thieves would usually require much more data than an e-file PIN to file a fraudulent return.
The agency said the incident is not related to an outage last week of Internal Revenue Service tax processing systems.
Senator To Question IRS Commissioner
Sen. Orrin Hatch (R., Utah), the Senate Finance Committee chairman, said he would ask IRS Commissioner John Koskinen about the issue at a previously-scheduled hearing today.
“While it appears that the IRS was able to successfully block this attempted breach this time around, it’s past time we fundamentally rethink our approach in authenticating taxpayers and processing tax returns,” Hatch said.
IRS, state tax officials and tax-preparation firms have sought to combat the tax-refund fraud over the past year. Thieves use stolen personal data to file a return claiming a fake refund. If a thief can use information from a taxpayer’s prior returns, the fraudulent return can be harder for federal and state fraud filters to detect.
Hackers in 2015 stole personal information from over 330,000 taxpayers from the IRS “Get Transcript” database, which included data from prior returns.
Ethereum Notches Two-Month High as Bitcoin Offspring Triggers Volatility
Digital currency Ethereum climbed to a two-month high on Monday, taking some of the heat off Bitcoin and Bitcoin Cash, which have slumped since the weekend.
Ethereum Forges Higher Path
Concerns over Bitcoin created a favourable tailwind for Ethereum (ETH/USD), which is the world’s No. 2 digital currency by total assets. Ether’s price topped $340.00 on Monday and later settled at $323.54. That was the highest since June 20.
At its peak, ether was up 10% on the day and 70% for the month of August.
The ETH/USD was last down 2.2% at $315.02, according to Bitfinex. Prices are due for a brisk recovery, based on the daily momentum indicators.
Fractured Bitcoin Community
Bitcoin and its offshoot, Bitcoin Cash, retreated on Monday following a volatile weekend. The BTC/USD slumped at the start of the week and was down more than 3% on Tuesday, with prices falling below $3,900.00. Just last week, Bitcoin was trading at new records near $4,500.00.
Bitcoin Cash, which emerged after the Aug. 1 hard fork, climbed to new records on Saturday, but has been in free-fall ever since. The BTH was down another 20% on Tuesday to $594.49, according to CoinMarketCap. Its total market value has dropped by several billion over the past two days.
Analysts say that a “fractured” Bitcoin community has made Ethereum a more attractive bet this week. The ether token has shown remarkable poise over the past seven days, despite trading well shy of a new record.
Other drivers behind Ethereum’s advance are steady demand from South Korean investors and growing confidence in a smooth upgrade for the the ETH network. The upgrade, which has been dubbed “Metropolis,” is expected in the next several weeks. Its key benefits include tighter transaction privacy and greater efficiency.
Ethereum Prices Unaffected by ICO Heist
Fin-tech developer Enigma was on the receiving end of a cyber-heist on Monday after hackers took over the company’s website, mailing list and instant messaging platforms. The hack occurred three weeks before Enigma’s planned Initial Coin Offering (ICO) for September 11.
In addition to defacing the company’s website, the hackers pushed a special “pre-sale” ahead of the ICO. While many users realized it was a scam, 1,492 ether tokens – valued at $495,000 – were directed into the hackers’ cryptocurrency wallet by unsuspecting backers.
The irony in all this is that Engima is a cryptography company that prides itself on top-notch security protocols. The company issued a statement that its servers had not been compromised.
Ethereum Prices on Track for 35% Monthly Drop
It has been a difficult month for ethereum. The world’s No. 2 digital currency has lost a third of its value over the past 30 days following a series of cyber breaches targeting vulnerable wallets and ICOs.
Ethereum Struggles to Regain Momentum
Ethereum (ETH/USD) was trading near $197.00 Sunday at 6:30 BST, according to Bitfinex. That represents a decline of around 5%. At current values, ethereum’s market cap was $18.4 billion.
The ETH/USD exchange rate has struggled throughout July, with prices briefly falling below $160.00. The decline, which amounted to a 60-day low, lured bargain-hunters back into the market. After surging back toward $250.00, the ETH/USD has consolidated below the $220-mark, which continues to offer strong resistance. On the opposite side of the spectrum, major support is located at $180.00.
A price recovery may prove elusive in the short-term, with the Relative Strength Index (RSI) and Stochastic indicator signalling weak underlying momentum.
Despite its recent decline, ethereum’s value has surged more than 2,200% this year.
Cyber Attacks, SEC Weigh on Market
The ethereum network suffered a large-scale cyber breach earlier this month resulting in the loss of tens of millions of dollars. A community of ethical hackers quickly banded together to “rescue” hundreds of millions of dollars worth of tokens.
Blockchain-based trading platform Coindash was also hijacked during an initial coin offering (ICO). The breach exposed Coindash’s ether wallet address, resulting in the loss of $7 million worth of ether.
The Securities and Exchange Commission (SEC) has also taken an interest in the ethereum-based ICO market. Last week, the regulator concluded that a certain multi-million dollar token sale last year violated securities law. Although ICOs have been compared to crowd-sourcing, the SEC maintained that some tokens were in fact securities.
Analysts say the SEC ruling could impact the future of ICOs, although it remains unclear how the regulator is pursuing this market. The SEC’s July 25 press release cautions investors about ICOs in general.
Coders Safeguard Vulnerable Ethereum Wallets Following Security Breach
Ethereum suffered large-scale security breaches last week after anonymous hackers targeted vulnerable wallets in the network, resulting in the loss of tens of millions of dollars. However, it didn’t take long for a volunteer group of coders to “rescue” the funds in 500 at-risk wallets before the same attackers could get to them too.
White Hat Group Takes Charge
The so-called White Hat Group showed initiative by “rescuing” the funds using the same techniques the thieves employed to compromise $32 million USD worth of ether from three multi-signature wallets. As of Monday, the White Hat Group of ethical hackers was in possession of $86 million worth of ether and an additional $122 million in tokens.
Tokens are digital assets that are sold during an Initial Coin Offering (ICO) fundraising event. They have proven to be extremely popular.
Tens of millions of dollars worth of ether and tokens have already been returned to their owners. The White Hat Group says it will issue full refunds by the end of July.
Blockchain-based trading platform Coindash was also breached last week, resulting in the loss of more than $7 million worth of ether.
Security Breaches Nothing New in Crypto World
For all its benefits, cryptocurrency has been vulnerable to several high-profile security breaches. Last summer, Hong Kong-based Bitfinex was the target of a major attack that resulted in the theft of around $70 million worth of bitcoins. In response, the exchange announced a controversial plans to “socialize” its losses among all users. Each Bitfinex trader was docked 36% as a result.
Bitcoin prices declined sharply following the attack, stopping what had been a blistering summer of gains.
Ethereum Enterprise Alliance
For anyone doubting the potential of the ether, take a look at the list of companies participating in the Enterprise Ethereum Alliance (EEA). The EEA is a forum that connects Fortune 500 companies, startups and academics with ethereum subject matter experts. The EEA is made up of multinational banks and some of the world’s biggest technology companies.
The forum has made cyber security a top priority, according to a May 22 press release. In the release, companies like Infosys, Mitsubishi UFJ Financial Group, Synechron and others expressed their intent to contribute to the future of ethereum’s security.
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