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New York Bill Would Mandate Backdoors into Smartphones

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A new bill up for consideration in the New York state assembly would mandate smartphone manufacturers to decrypt their phones for law enforcement to install backdoors and gain access to smartphones on demand.

The bill, introduced by Assemblyman Matt Titone in summer 2015 was referred to the committee last week, also proposes a $2,500 fine for each device that flouts the requirement, as revealed by On The Wire.

The primary requirement of the bill is:

…any smartphone manufactured on or after January 1, 2016, and sold or leased in New York, shall be capable of being decrypted and unlocked by its manufacturer or its operating system provider.

Encryption has long been a hot topic of debate between policymakers and tech companies. Silicon Valley is refusing to budge, noting that any move to weaken device encryption and security for law enforcement is a vulnerability in itself, with a backdoor now available for malicious hackers and attackers.

As things stand, all new iPhones and some Android phones are encrypted by default.

Manhattan District Attorney Cyrus R. Vance Jr. weighed into the debate recently. He claimed iPhones are the first consumer products in American history to go beyond the reach of lawful warrants. He called for a “national, legislative solution,” stating that Apple’s unwillingness to give in to backdoors.

The note included in the bill explains the reasoning for this sweeping measure and the fine proposed for every device that doesn’t comply with the requirement.

 The safety of the citizenry calls for a legislative solution, and a solution is easily at hand. Enacting this bill would penalize those who would sell smart- phones that are beyond the reach of law enforcement.

The fact is that, although the new software may enhance privacy for some users, it severely hampers law enforcement’s ability to aid victims. All of the evidence contained in smartphones and similar devices will be lost to law enforcement, so long as the criminals take the precaution of protecting their devices with passcodes. Of course, they will do so. Simply stated, passcode-protected devices render lawful court orders meaningless and encourage criminals to act with impunity.

In statements that may come as a surprise to many, the former director of the NSA, Michael Hayden spoke against backdoors and voiced his disagreement with FBI’s plan to put an end to or limit encryption.

Speaking at a recent cybersecurity conference in Miami beach where the former director claimed the NSA are the best hackers in the world, he stated:

I actually think end-to-end encryption is good for America. I know encryption represents a particular challenge for the FBI. But on balance, I actually think it creates greater security for the American nation than the alternative: a backdoor.

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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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4 stars on average, based on 1 rated postsSamburaj is the contributing editor at Hacked and keeps tabs on science, technology and cyber security.




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5 Comments

5 Comments

  1. MickGhee

    January 14, 2016 at 9:17 am

    dont worry folks there will be a custom rom which fools the network into thinking the phone is compliant. there is nothing they can do that we cant undo. Well on Android anyway. Just another reason to ditch your Iphone and join the openspource revolution

    • Illutian Kade

      January 15, 2016 at 2:17 pm

      Or….we could just revolt and throw the scum out.

      It’s easy to make a hardware backdoor, just as it is to make a software one.

      • MickGhee

        January 15, 2016 at 8:35 pm

        much easier to hack it than revolt but i like where you are going … lock n load patriot

  2. Real Anti-Racist Action

    January 14, 2016 at 9:52 am

    This is the worst dictatorship in History. Worse then Asian-Genghis Khan, who genocided 127,000,000 million indigenous Russian and European tribal peoples.
    Worse then the Moors who genocided some 9,000,000 indigenous Spanish tribal peoples.
    Worse then the Holodomor which genocided 45,000,000 indigenous tribal peoples of Ukraine and Russia.
    What is wrong with these lunatics.
    No freedoms here. I check with the Federal government everyday just to receive permission to breath. They always reluctantly grant me this permission each and everyday. I fear for when they deny me the right to breath, for i must let out to much Carbon i am sure..

  3. Dan Gul

    February 4, 2016 at 3:55 pm

    All that will do is open up better ways to root the phones. Considering most of the people in power a technical troglodytes, they miss the easy win this is for hackers. Since the law specifically requires MANUFACTURERS and Phone operators to do this, if the encryption is not theirs, there is nothing they can do legally. https://play.google.com/store/apps/details?id=csh.cryptonite Part of this is the danger however of being under contract with a phone carrier who can pass the legal issues to the customer. This action will make the demand for off contract phones higher and drive prices lower (or higher) in NY if this idiotic law passes. I am skeptical that this law will pass though. Too many consumer protections violated. The word really needs to get out there to NYers to be aware of this.

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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.

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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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4.6 stars on average, based on 544 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 544 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 35 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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