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Judge Suspends Order Requiring Apple To Help FBI Unlock iPhone, But At A Cost

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A U.S. Magistrate Judge suspended her Feb. 16 order that Apple help investigators unlock the iPhone used in the San Bernardino terror attack, according to The Wall Street Journal. The hearing was scheduled for Tuesday and has been indefinitely suspended. This decision defuses the conflict between the government and Apple, but it comes at a cost to Apple since it suggests there is a gap in its software. Apple had said there is no way to unlock the phone.

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Since 2014, Apple has claimed it had no way to break into phones with the most recent versions of its software. In arguing against the government’s order to create a way to access the phone’s data, the company said doing so would endanger its customers’ privacy.
The court postponed the case Monday, saying it was investigating a way to get the information without help from Apple.

Edward McAndrew, a partner at the Ballard Spahr law firm and a former federal prosecutor, said the postponement suggests that what Apple feared already exists in some form, and it exists outside of the company.

Judge Suspends Order

U.S. Magistrate Judge Sherri Pym suspended her Feb. 16 order for Apple to assist investigators in unlocking the iPhone used by Syed Rizwan Farook, who with his wife killed 14 people in the Dec. 2 attack in San Bernardino, Calif.

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The judge postponed the hearing indefinitely, defusing the conflict between the Justice Department and Apple that pitted security against privacy.

The FBI’s method for accessing the phone was not clear Tuesday. The government said an “outside party” brought the information. A government official said it was still testing the method but is hopeful it will be able to unlock the phone without assistance from Apple.

Theodore Boutros, Apple’s lawyer, urged the judge to revoke or suspend the order. He said the government indicated Apple did something wrong in creating its encryption and in objecting to the government’s order to unlock the phone.

Vacating the order would be premature since the new method might fail, said Tracy Wilkinson, an assistant U.S. Attorney. She said many people have offered assistance with alternate methods to unlock the phone, but none have succeeded.

FBI Could Gain A New Tool

Law enforcement has an interest to not only exploit vulnerabilities in the phone but to keep the information it uncovers out of Apple’s hands.

Casey Ellis, chief executive and co-founder of Bugcrowd, a cybersecurity firm, said the information will become another tool in the FBI’s surveillance arsenal until the vulnerability is fixed.

The government said it knows there is a possible gap in the software protecting the iPhones, but it isn’t saying anything more about it at present.

The main question in the case has been whether or not Apple has a responsibility to help law enforcement unlock the phone or whether law enforcement should help Apple protect its customers from iPhone vulnerabilities.

How To Breach The Phone

Security experts have hypothesized on how the iPhone could be breached. One possibility is that there is an undisclosed vulnerability in the software that the government can exploit, such as a “boot loader” code the iPhone uses to activate its iOS operating system.

Another possibility is that technicians could de-solder the encrypted memory chip, insert a test socket in place of the memory, then copy the encrypted data to memory chips, slide them into the test socked and guess Farook’s passcode. Guessing the passcode would take up to 10,000 guesses. The iPhone only allows 10 attempts, but the FBI could repeatedly load the data onto a flash chip to reset the counter. This system would cost $50,000 in equipment and take as little as two days, according to Daniel Kahn Gillmor, a technology fellow at the American Civil Liberties Union.

Another scenario would focus on an ion beam to probe the phone’s microprocessor, extract cryptographic information and use it to decrypt the phone’s data. This method would cost between $500,000 and $1 million and require several months.

Congressman Criticizes FBI

Rep. Ted Lieu, D-Calif., called the FBI’s actions extremely disconcerting since it filed the case against Apple before exhausting all its options, then asking to delay the hearing before knowing if the new method would work.

Lieu said there was a lack of due diligence, or the agency was not really interested in the iPhone and was using the tragedy to set a precedent.

A Justice Department official said the FBI continuously sought to access the phone’s data without Apple’s help but asked for the delay to test the newly proposed method.

Featured image from Shutterstock.

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  1. jon sebastiani

    March 26, 2016 at 4:36 am

    This is much ado about nothing. In my not so humble opinion I believe that the issue was that the FBI was coercing Apple to make a backdoor key usable on any iPhone. I would expect the the FBI to use some brute force methods to get at the data on the phones in question.

    I think Apple should have taken the phone, retrieved the data and given it to the FBI. The spirit of the request would have been met, Apple would not have provided a one size fits all key. Problem solved.

    Does anyone believe that the average hacker is going to steal your phone, remove parts, and then return the phone to hack their phone? Hacking the phone with hardware is always an option.

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Ethereum Notches Two-Month High as Bitcoin Offspring Triggers Volatility

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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.

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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.

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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.

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Ethereum Prices on Track for 35% Monthly Drop

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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.

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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.

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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.

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Coders Safeguard Vulnerable Ethereum Wallets Following Security Breach

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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.

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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.

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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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