Microsoft has sued the U.S. government for the right to advise customers when a federal agency is looking at their emails, claiming the government is violating the law by not allowing Microsoft to notify its customers, according to Reuters.
The suit, filed in federal court in Seattle, Wash., marks the latest in a series of clashes about privacy between the government and the technology industry.
Microsoft claims the government’s actions violate the Fourth Amendment, which establishes the right for individuals and businesses to know if the government seizes or searches their property. The government’s actions violate Microsoft’s free speech rights, the suit claims.
The Justice Department is reviewing the suit, according to a government spokesperson.
Focus On Data Storage
The suit focuses on data storage on remote servers rather than locally on people’s computers. The storage of data provides a new opening for the government to access data, Microsoft claims.
Under the Electronic Communications Privacy Act (ECPA), the government is increasingly directing investigations at parties that store data in the cloud, Microsoft claims. Technology companies have scrutinized the 30-year-old law, while privacy advocates say the law was written prior to the growth of the Internet and is, therefore, outdated.
“People do not give up their rights when they move their private information from physical storage to the cloud,” the lawsuit states, adding that the government “has exploited the transition to cloud computing as a means of expanding its power to conduct secret investigations.”
Microsoft Follows Apple
Microsoft, by filing this suit, is raising its profile in the battle between the technology industry and the government over privacy. In recent months, Apple has dominated that battle on account of the government’s attempts to compel the company to write software to unlock an iPhone used by a shooter in the San Bernardino, Calif. terror attack in December.
Apple argued that cooperating with the government would transform the company into arms of the state.
“Just as Apple was the company in the last case and we stood with Apple, we expect other tech companies to stand with us,” Brad Smith, Microsoft’s chief legal officer, said in a phone interview.
D.J. Rosenthal, a former White House cybersecurity official, questioned Microsoft’s motive and timing in filing the suit. He said the company was motivated by business interests and is capitalizing on the rising concern about customer privacy driven by the Apple dispute.
Microsoft’s Windows, like other legacy systems, are losing traction in an increasingly Internet-centric and mobile computing environment. The company’s cloud-based business is gaining importance.
Microsoft customers have asked about government surveillance, Smith said, indicating that the issue could harm Microsoft’s ability to keep and win cloud customers.
Microsoft: Government Constrains
Microsoft’s complaint said in the past 18 months, it received 5,624 legal orders under the ECPA. From this total, 2,576 orders prevented Microsoft from disclosing that the government seeks customer information through subpoenas, warrants and other requests. Most ECPA requests apply to individuals rather than businesses. Microsoft said they provided no fixed date to the secrecy provision.
Microsoft is among companies that two years ago won the right to disclose the number of government demands for data they receive. The new case goes farther, requesting that it be able to notify individuals and companies that the government wants information about them.
U.S. businesses increasingly fall under pressure to prove they are helping to protect consumer privacy. The effort gained support following revelations in 2013 by Edward Snowden, the former government contractor, that the government routinely conducted Internet surveillance and phone surveillance to a greater degree than previously believed.
After Reuters reported late last year that Microsoft did not alert customers that email was compromised by hackers working from China, the company publicly said it would adopt a policy of advising customers when it thought their email was hacked by a government. The customers that were not alerted included leaders of China’s Uigher and Tibetan minorities.
Congress Proposes Reforms
Microsoft’s lawsuit comes a day after a Congressional panel voted for a set of ECPA reforms, Hacked reported.
Changes in the legislation removed a requirement for the government to advise a targeted user whose communications are being sought. The bill now requires the disclosure of a warrant to service a provider, retaining the right to voluntarily notify users unless a court grants a silencing order.
The bill’s short-term prospects are uncertain.
Microsoft is also battling a federal warrant to provide data held on a server in Ireland that the government claims is lawful under another section of the ECPA. Microsoft says the government has to follow a procedure spelled out in a legal assistance treaty between the two countries.
Twitter Inc., meanwhile, is fighting the government in federal court over public disclosure of requests for information on users.
The case, Microsoft Corp v United States Department of Justice et al, is filed in the U.S. District Court, Western District of Washington, No. 2:16-cv-00537.
Featured image from Shutterstock.
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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