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Lizard Squad Fails Hard

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Lizard Squad (currently: @LizardMafia), the bane of Sony Playstation and Microsoft XBOX online gaming communities, was the DDoS Grinch that stole Christmas gaming this year. Neither platform was usable for more than thirty minutes, and those brief respites were tied to Twitter account pumping.

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@LizardMafia would pick a smaller account from their group to promote, promising the attacks would stop if the account met some goal, such as reaching 5,000 followers. They also ran repeated tweet polls, asking followers to RT the tweet if they wanted Play Station Network attacked, or favorite the tweet to direct their attention to XBOX.

Also read: Lizard Squad Stops PSN and Xbox Live Takedown Possibly Thanks to Mega and Kim Dotcom

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Their most recent act has been promoting lizardstresser.su, which offers ‘shell booters’, and in doing so they made a string of mistakes. Security researcher Brian Krebs has had direct, personal conflict with them in the past, and their errors permitted him to characterize them accurately.

Smoke, Mirrors & Lizards

Lizard MafiaThe holiday attacks have been maddening for the members of the predominantly male fifteen to twenty five year old demographic that received either type of game console for Christmas. The practice of promoting multiple Twitter accounts meant any attempt to banhammer them had to hit half a dozen targets in very quick succession. The frontal assault tactics favored by young men were at best of limited use, and more often backfired on innocent bystanders, precisely as the Lizards intended.

@LizardMafia itself had a few particular personas they chose to single out for direct attention. The aush0k mentioned here is Matthew Flannery, an Australian hacker who belatedly and quite incorrectly declared himself the supreme leader of LulzSec last year, during his arrest for vandalizing a tiny Australian village government site.

@LizardMafia Taunts aush0k

@LizardMafia Taunts aush0k

@MeanTXLawyer is Texas attorney Jason Lee Van Dyke, whose twin claims to fame are being dumb enough to try to drag Tor Project into court over the content on the PinkMeth hidden service revenge porn site, and for offering a bounty on doxbin operators nachash (@loldoxbin) and Intangir, then publicly threatening to kill both of them.

@LizardMafia Taunts @MeanTXLawyer

@LizardMafia Taunts @MeanTXLawyer

Seeking Media Attention

Emboldened by their successes and in a manner eerily similar to what happened during the FBI orchestrated fifty day LulzSec rampage of 2011, some of the ringleaders took to the airwaves, and the group’s downfall began.

First was the young man seen below, Julius Kivimaki, a Finnish teen who has been at the center of much mayhem for over two years. Brit Vinnie Omari appeared as well, only to be arrested a few days later on some Paypal fraud charges.

Promoting LizardStresser, Doxing Subscribers

Internet celebrity KimDotCom ransomed both PSN and XBOX for $300,000 worth of his company’s cloud storage product, and the Lizards moved on to a new strategy – offering DDOS as a service via lizardstresser.su. Brian Krebs was quickly on the scene with Lizard Kids: A Long Trail Of Fail.

Krebs’ post and Ode To LizardSquad on Malware Tech are the sort of thing one reads with a copy of Maltego running to collect all of the details for further inspection but the executive summary is found in this pastebin: LizardStresser User Dump. Some details of their 1,700 subscribers are now public, and it is unclear what else their sloppy OPSEC has exposed.

Best of all, Malware Tech performed a simple test, proving that LizardPatrol and Darkode share the same system. Read those detailed studies and you’ll be able to trace the Lizards back to their point of origin.

LizardPatrol & Darkode Hosted Together

LizardPatrol & Darkode Hosted Together

Another FBI Sponsored Hacker Rampage?

If what Lizard Squad is doing were organic, it would follow the same power law distribution seen in insurgencies. A few months ago they hit hard and managed to divert an American Airlines flight in order to inconvenience a Sony exec on his way to a conference, then they slipped away quietly. The Christmas holiday attack doesn’t look odd; it’s the right time in terms of maximum audience, and it doesn’t seem particularly closely correlated with the Sony intrusion. If the next few months bring smaller actions with different methods, or nothing at all, that would be a statistical fit.

But two of the members have been arrested. If there is immediately another big hit involving LizardStresser, or some other very noteworthy move, and then another … and another? A steady or escalating stream of events would be clear signs that the next Sabu is moving among the next herd of victims, setting up the young and unwary.

Images from Lizard Mafia, Malware Tech and 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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Coincheck Hackers Launder 40% of Stolen NEM Funds, Experts Say

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The hackers behind Coincheck’s massive NEM heist have successfully offloaded 40% of the stolen funds, according to new research by Tokyo-based consultancy group L Plus. The successful money laundering campaign highlights the ongoing challenges authorities face in bringing cyber criminals to justice.

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Hackers Launder NEM

Analysts at L Plus believe that roughly 200 million NEM tokens, worth $79 million, have already been laundered through the dark web. However, the hackers likely pocketed a much smaller amount amid ongoing efforts to blacklist the tokens.

Nikkei Asian Review reported Monday that Coincheck was targeted with “suspicious traffic” for weeks leading up to the Jan. 26 heist. Citing a person close to the investigation, Nikkei said the attackers hacked an employee email and stole a private key needed to transfer the NEM tokens to the desired accounts. L Plus indicated that the attacker must have repeatedly accessed the Coincheck server to obtain the private key.

When the hack took place, the stolen NEM tokens were worth more than $400 million. Today, they are worth less than half that amount. The identity of the attackers remains unknown to this day. However, authorities have speculated that North Korea may have been responsible for the attack.

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Coincheck plans to resume operations this week following a government-mandated freeze on all trading activity.

Japan Boosts Oversight

The attack has prompted Japan’s financial regulators to step up their oversight efforts of the cryptocurrency market. Last week, regulators penalized seven exchanges after deeming their internal controls insufficient to deal with a cyber attack.

Japan’s Financial Services Agency (FSA) slapped two exchanges – FSHO and Bit Station – with month-long suspensions. The remaining five exchanges – Bicrements, Coincheck, GMO Coin, Mr. Exchange and Tech Bureau – were given business improvement orders.

The FSA began conducting on-site inspections in late January following the Coincheck attack. Regulators have uncovered several issues, including a lack of customer protection measures and insufficient anti-money laundering controls.

Japan remains one of the most welcoming jurisdictions for cryptocurrency trading, but repeated attacks may prompt regulators to reconsider their relatively lax approach. Digital currency exchanges in Japan and elsewhere face a growing threat from cyber criminals looking to capitalize on the rising value of digital assets.

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 410 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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Skepticism Grows Over BitGrail’s Supposed $167 Million Hack

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A relatively unknown cryptocurrency exchange by the name of BitGrail has informed its users of a coordinated cyber attack targeting Nano (XRB) tokens. However, the incident does not appear to be holding up to scrutiny after the founder of the exchange made an odd request to the developers of Nano shortly after discovering the alleged theft.

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BitGrail Exchange Allegedly Compromised

The Italian exchange issued a notice to its clients last week informing them that 17 million XRB tokens were compromised in a cyber attack. The XRB token, formerly known known as Raiblocks, is valued at $9.80 at the time of writing for a total market cap of $1.3 billion. That puts the total monetary loss of the supposed heist at nearly $167 million.

Parts of the notice have been translated into English from the original Italian by Tech Crunch, a media company dedicated to startups and technology news. According to the agency,  BitGrail has stated the following:

“… Internal checks revealed unauthorized transactions which led to a 17 million Nano shortfall, an amount forming part of the wallet managed by BitGrail… Today a charge about those fraudulent activities has been submitted to the competent authorities and now is under police investigation.”

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The notice indicated that all transactions have been put on hold until authorities complete their investigation.

Very little is known about BitGrail, as it is not listed among the 183 exchanges whose volume is ranked by CoinMarketCap.

Suspicion Grows

Unlike other crypto heists, the circumstances surrounding the alleged BitGrail attack have been met with widespread suspicion. As David Z. Morris of Fortune rightly notes, this isn’t the first time BitGrail has suspended Nano withdrawals. The same thing happened in early January when the exchange halted not only Nano, but Lisk and CryptoForecast transactions as well.

The suspension was followed by an announcement that the exchange was taking measured steps to verify users and enforce anti-money laundering requirements. It was around this time that users became suspicious that BitGrail was going to cut and run with their tokens.

BitGrail founder Francesco Firano made an unusual request to the developers of Nano following the alleged attack: he asked them to fork their record, a move that would essentially restore the stolen funds.

Nano officially rejected the request on Friday, the day after Firano supposedly discovered the stolen coins. In a post that appeared on the Nano Medium page, the team said:

“We now have sufficient reason to believe that Firano has been misleading the Nano Core Team and the community regarding the solvency of the BitGrail exchange for a significant period of time.”

Last month, hackers made off with more than $400 million worth of NEM tokens stolen from Coincheck, a Japan-based cryptocurrency exchange. The coins have yet to be recovered and the perpetrators remain at large. In 2014, a cyber heist brought down Mt Gox, which was the world’s largest 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 410 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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Coincheck Hackers Are Trying to Sell Their Stolen NEM Coins

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hacker extortion bitcoin

The hackers behind the biggest crypto heist of all time are attempting to sell their stolen coins, according to an executive at the NEM Foundation. The revelations are the latest in a four-day saga that has authorities still struggling to identify perpetrators or locate the account in receipt of the stolen funds.

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Hackers Try to Profit

Jeff McDonald, Vice President of the NEM Foundation, said Tuesday that his organization had traced stolen XEM coins to an unidentified address. It was here that the thief tried to unload the stolen funds onto six online exchanges for the purpose of selling them. McDonald said the exchanges have since been notified.

It was not immediately apparent how many of the stolen coins were spent or even the whereabouts of the account. A spokeswoman at the NEM Foundation later said the attacker sent the cryptocurrency to several random accounts in 100-token increments.

Last Friday, the attackers made off with more than $400 million worth of NEM tokens from Japanese cryptocurrency exchange Coincheck. The monetary value of the heist has fluctuated several times over the past four days, reflecting regular price moves in NEM’s native XEM token. However, Coincheck said it would reimburse account holders at a rate of 81 U.S. cents per token, which reflects the average price between Jan. 26 and 27.

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Coincheck has been fined administrative penalties for failing to secure client funds. It was later revealed by the executive management team that the exchange failed to implement basic security features, such as multi-signature capability and cold storage. Rather, the XEM tokens were held in accounts connected to the internet.

Although the NEM Foundation is trying to prevent the liquidation of stolen funds, MacDonald said the attackers will likely get away with some of the money. However, the likelihood that they spend all of it is virtually zero given the market’s underlying liquidity constraints.

NEM Price Volatility

News of the heist on Friday triggered significant volatility in the price of XEM and the broader cryptocurrency market. Following a brief recovery, XEM has declined steadily over the past three days, with prices reaching new six-week lows on Tuesday. The coin touched a session low of 79 cents on volumes of more than $32 million. At press time, the coin was worth a little more than 80 cents.

Even with the decline, NEM held on to tenth spot in the global cryptocurrency rankings based on market cap. The coin’s overall value remains well north of $7 billion, according to CCN.

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 410 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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