Feds use blockchain for busts

Cybercriminals’ heists have been hoist with their own petards in two stunning reversals achieved by the authorities over the past 24 hours.

The FBI demonstrated it could do busts through the blockchain, recovering most of the 75 bitcoins paid in a ransom to Russia-based hackers DarkSide, who shut down the Colonial Pipeline last month.

As the Justice department explained yesterday: “By reviewing the Bitcoin public ledger, law enforcement was able to track multiple transfers of bitcoin and identify that approximately 63.7 bitcoins, representing the proceeds of the victim’s ransom payment, had been transferred to a specific address, for which the FBI has the ‘private key,’ or the rough equivalent of a password needed to access assets.”

It is unclear how exactly the FBI got hold of the hackers’ private key. Dave Jevans, chief executive of the blockchain analytics group CipherTrace, said the FBI is believed to have seized some of DarkSide’s servers, which “may have hosted wallet private keys”.

Lisa Monaco, the US deputy attorney-general, said. “Following the money remains one of the most basic, yet powerful tools we have.” Recovering a ransom is still rare though. Once hackers have received crypto payments, they typically cash their funds into fiat via cryptocurrency exchanges, over-the-counter brokers or illegal marketplaces on the dark web. 

Even more impressive is how more than 800 people have been arrested around the world through a sting that lured drug dealers, mafia members and other organised criminals to an encrypted communications platform secretly run by the FBI.

Investigators said they monitored more than 12,000 devices used by more than 300 criminal syndicates in an operation that led to seizures of more than 13 tonnes of drugs, $148m in cash and the disruption of more than 100 murder plots, with the operations of gangs targeted in more than 100 countries.

Similar to how European authorities cracked the EncroChat communication service last year, Calvin Shivers, an assistant director from the FBI’s criminal investigative division, said the new operation was a “shining example” of what could be achieved when authorities around the world developed “state of the art investigative tools to detect, disrupt and dismantle criminal organisations”.

The FBI had taken control of an encrypted messaging app called AN0M in 2018 that criminals were using on special smartphones. Police forces worldwide were then able to access 27m messages exposing their activities.

It’s just the kind of privacy breach that would make Apple shudder. At its WWDC annual developer conference on Monday, the iPhone maker doubled down on the security advantages of its software, announcing new privacy features including a “Private Relay” VPN service that will hide users’ locations.

The Internet of (Five) Things

1. News websites go down Fastly
It wasn’t hackers this time, but thousands of websites went offline for as much as an hour on Tuesday morning, including ft.com and other news sites, streaming services, online retailers and even the UK government. A Silicon Valley-based content delivery network Fastly admitted that a problem with its systems caused the outage.

2. G7 plan may mean Big Tech paying less
Big Tech will pay less tax in the UK under a deal agreed at the G7 than they currently pay under the country’s digital service tax, according to calculations by the TaxWatch think-tank. At least Amazon will be included: we’ve learnt its high-margin cloud services can be treated as a separate entity and taxed accordingly.

3. Nvidia seeks Chinese Arm approval
If it happens at all, this deal is going to take a long time. Nvidia has submitted an application to Chinese competition regulators to review its $40bn takeover of UK chip designer Arm, a process that could take 18 months and well exceeding the timeline originally set out by the US company. In other chip news, the spread of Covid-19 into Taiwan’s electronics factories is threatening to delay semiconductor shipments, while Bosch, Europe’s largest auto supplier, has warned car manufacturers that they must put “money on the table” and make a “rock solid” commitment to orders if they are to avoid a repeat of the current chip shortage.

4. NHS delays data dump after outcry
The NHS has pushed back its plans to pool the full medical histories of 55m patients in England into a single database after extensive pressure from campaigners, politicians and patients. Parliament was told the move would be delayed two months to September 1 in order “to strengthen the plan, build a trusted research environment and ensure that the data is accessed securely”.

5. Biden drawn to China’s magnets
The Biden administration is considering an investigation into whether imports of rare earth magnets made largely in China pose a national security threat that could warrant the imposition of tariffs. The neodymium magnets are used to manufacture everything from smartphones to electric vehicle motors. Washington has grown increasingly concerned about China’s dominance in rare earths.

Tech tools — Apple’s Walking Steadiness

Apple’s next mobile operating systems will build on the health features for the iPhone and Watch, with additions in iOS 15 that will include a new Sharing tab that lets users privately share their data with a trusted partner or caregiver. If you’re very old or very inebriated, you might also appreciate Walking Steadiness. This feature captures data as users walk with their iPhone, using custom algorithms to assess balance, stability, and coordination through built-in motion sensors. “In addition to alerting users of possible fall risk, Walking Steadiness helps users meet their stability goals,” says Apple. “Users can choose to receive a notification when their score is Low or Very Low, and be directed to curated visual exercises that are based on clinically validated methods to increase strength and balance”.