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Businesses

Colonial Pipeline CEO Tells Why He Paid Hackers a $4.4 Million Ransom (wsj.com) 160

The operator of the Colonial Pipeline learned it was in trouble at daybreak on May 7, when an employee found a ransom note from hackers on a control-room computer. By that night, the company's chief executive came to a difficult conclusion: He had to pay. From a report: Joseph Blount, CEO of Colonial Pipeline, told The Wall Street Journal that he authorized the ransom payment of $4.4 million because executives were unsure how badly the cyberattack had breached its systems or how long it would take to bring the pipeline back. Mr. Blount acknowledged publicly for the first time that the company had paid the ransom, saying it was an option he felt he had to exercise, given the stakes involved in a shutdown of such critical energy infrastructure. The Colonial Pipeline provides roughly 45% of the fuel for the East Coast, according to the company. "I know that's a highly controversial decision," Mr. Blount said in his first public remarks since the crippling hack. "I didn't make it lightly. I will admit that I wasn't comfortable seeing money go out the door to people like this. But it was the right thing to do for the country," he added.

[...] Mr. Blount said Colonial paid the ransom in consultation with experts who had previously dealt with the criminal organization behind the attacks. He and others involved declined to detail who assisted in those negotiations. Colonial said it has cyber insurance, but declined to provide details on ransomware-related coverage. In return for the payment, made in the form of bitcoin, about 75 in all, according to a person familiar with the matter, the company received a decryption tool to unlock the systems hackers penetrated. While it proved to be of some use, it was ultimately not enough to immediately restore the pipeline's systems, the person said.

Bitcoin

Ethereum Staking Will Drop Power Consumption By 99% (cryptobriefing.com) 195

After Ethereum transitions to proof-of-stake, the blockchain's power consumption is expected to drop by more than 99%, making it about 7,000 times more energy efficient than Bitcoin. Crypto Briefing reports: Ethereum will reduce its energy consumption by 99.95% following its transition to proof-of-stake, according to a new blog post from Carl Beekhuizen of the Ethereum Foundation. Beekhuizen estimated there are 87,000 at-home stakers using about 100W of energy for a total of 1.64 megawatts. Additionally, there are another 52,700 exchanges and custodial services that use about 100W per 5.5 validators for a total of 0.98 megawatts. Based on those estimates, Beekhuizen says that Ethereum will consume about 2.62 megawatts when it switches to proof-of-stake.

Beekhuizen added that this estimate may be too large. He noted that his own personal staking setup was optimized to use 15W, while some staking services use as little as 5W per validator. This means that Ethereum will no longer use the energy equivalent of a country or even a city. Instead, its total consumption will be comparable to a small town that contains around 2100 homes.

Bitcoin

Hackers Behind Colonial Pipeline Attack Reportedly Received $90 Million In Bitcoin Before Shutting Down (cnbc.com) 60

An anonymous reader quotes a report from CNBC: DarkSide, the hacker group behind the recent Colonial Pipeline ransomware attack, received a total of $90 million in bitcoin ransom payments before shutting down last week, according to new research. Colonial Pipeline was hit with a devastating cyberattack earlier this month that forced the company to shut down approximately 5,500 miles of pipeline in the United States, crippling gas delivery systems in Southeastern states. The FBI blamed the attack on DarkSide, a cybercriminal gang believed to be based in Eastern Europe, and Colonial reportedly paid a $5 million ransom to the group.

On Friday, London-based blockchain analytics firm Elliptic said it had identified the bitcoin wallet used by DarkSide to collect ransom payments from its victims. The same day, security researchers Intel 471 said DarkSide had closed down after losing access to its servers and as its cryptocurrency wallets were emptied. DarkSide also blamed "pressure from the U.S.," according to a note obtained by Intel 471. In a blog post Tuesday, Elliptic said DarkSide and its affiliates bagged at least $90 million in bitcoin ransom payments over the past nine months from 47 victims. The average payment from organizations was likely $1.9 million, Elliptic said.
"To our knowledge, this analysis includes all payments made to DarkSide, however further transactions may yet be uncovered, and the figures here should be considered a lower bound," said Tom Robinson Elliptic's co-founder and chief scientist.

According to Elliptic, $15.5 million of the $90 million total haul went to DarkSide's developer while $74.7 million went to its affiliates. The majority of the funds are being sent to crypto exchanges, where they can be converted into fiat money, Elliptic added.
Crime

The Bizarre Story of the Man Who Invented Ransomware in 1989 (cnn.com) 67

Slashdot reader quonset writes: To this day no one is sure why he did it, but in 1989 a Harvard-taught evolutionary biologist named Joseph Popp mailed out 20,000 floppy discs with malware on them to people around the world. At the time he was doing research into AIDS and the discs had been sent to attendees of the World Health Organization's AIDS conference in Stockholm.

Eddy Willems was working for an insurance company in Belgium and his boss asked him to see what was on the disc...

CNN picks up the story: Willems was expecting to see medical research when the disc's contents loaded. Instead he became a victim of the first act of ransomware — more than 30 years before the ransomware attack on the US Colonial Pipeline... A few days after inserting the disc, Willems' computer locked and a message appeared demanding that he send $189 in an envelope to a PO Box in Panama. "I didn't pay the ransom or lose any data because I figured out how to reverse the situation," he told CNN Business.

He was one of the lucky ones: Some people lost their life's work.

"I started to get calls from medical institutions and organizations asking how I got around it," said Willems, who is now a cybersecurity expert at G Data, which developed the world's first commercial antivirus solution in 1987. "The incident created a lot of damage back in those days. People lost a lot of work. It was not a marginal thing — it was a big thing, even then...." It's unclear if any people or organizations paid the ransom.

CSO reports that Popp was eventually arrested and charged with multiple counts of blackmail after law enforcement identified him as the owner of the P.O. box where the ransom checks were to be sent.

CNN adds that "One of the biggest problems about ransomware nowadays is that ransoms are often paid with cryptocurrency, such as bitcoin, which is exchanged anonymously and not traceable."
Bitcoin

'I Made Doge In Like Two Hours': Dogecoin Creator Says He 'Didn't Consider' Environmental Impact (independent.co.uk) 83

One of the creators of dogecoin has noted that he "didn't consider" the environmental impact of the cryptocurrency, which was initially created as a joke. The Independent reports: The comments from Billy Markus, one of the people who helped create dogecoin in the first place, when it was intended partly as a joke, came in response to a tweet from Elon Musk. Mr Musk had been attempting to clarify his position on cryptocurrency generally, in the wake of his statement about Tesla. "To be clear, I strongly believe in crypto, but it can't drive a massive increase in fossil fuel use, especially coal," Mr Musk had written. In response, Mr Markus sent a crying face emoji, which he later clarified he had meant to indicate "aw man, you right, environment stuff." In reply to that, Mr Markus was asked whether he had considered energy usage when creating the cryptocurrency. "i made doge in like 2 hours i didn't consider anything," he wrote.

Dogecoin was created in 2013, in reference to the meme and to poke fun at the vast numbers of cryptocurrencies that had been launched. But Mr Markus helped build the technical foundations that allow it to practically work, too. Like bitcoin, dogecoin requires miners to undertake complex cryptographical puzzles to create new bitcoins. That system, known as proof-of-work, relies on large amounts of computing power that use considerable amounts of energy, much of which is generated from fossil fuels.

Bitcoin

Ethereum Founder Regifts Unsolicited DOGE Knockoffs, Donates a Billion Dollars Worth of SHIB To an Indian COVID Relief Fund (coindesk.com) 49

Vitalik Buterin, founder of Ethereum, has signalled dog-themed memecoin creators to bark up another tree, reports CoinDesk. From the report: In a move that captivated the attention of Crypto Twitter on Wednesday, the Ethereum founder re-gifted tokens sent to his public wallet by the creators of Shiba Inu coin (SHIB), Dogelon (ELON) and Akita Inu (AKITA). Notably, Buterin donated 50 trillion SHIB tokens (worth a nominal $1.2 billion at press time) to the India Covid Relief Fund kicked off by Polygon founder Sandeep Nailwal late last month. Memecoin creators started sending large amounts of their tokens to the Ethereum figurehead in recent days. Vitalik was sent trillions of SHIB tokens worth over $8 billion dollars at one point. The knockoff tokens are beginning to tank.
Bitcoin

Australia's Wright Launches Lawsuit Over $5.7 Billion Bitcoin Haul (reuters.com) 52

An Australian computer scientist who alleges he created bitcoin has launched a London High Court lawsuit against 16 software developers in an effort to secure bitcoin worth around 4 billion pounds ($5.7 billion) he says he owns. From a report: In a case that was promptly labelled "bogus" by one defendant, Craig Wright is demanding that developers allow him to retrieve around 111,000 bitcoin held at two digital addresses that he does not have private keys for. In his second London lawsuit in three weeks, Wright alleges he lost the encrypted keys when his home computer network was hacked in February 2020. Police are investigating.

Wright, who is bringing the case through his Seychelles-based Tulip Trading firm, concedes he is a controversial figure since alleging in 2016 that he wrote the bitcoin white paper -- which first outlined the technology behind the digital assets -- under the pseudonym Satoshi Nakamoto in 2008. The claim is hotly disputed. The Australian, who is autistic and lives in Britain with his wife and two of his three children, alleges in his latest lawsuit that developers have breached their duties to act in the best interests of the rightful owner of globally-traded assets.

Bitcoin

eBay Embraces NFTs (techcrunch.com) 22

eBay is joining the NFT frenzy, telling Reuters today that going forward it will allow the sales of NFTs on its platform, a mainstream embrace that follows billions of dollars in NFT purchases over the past few months. TechCrunch reports: The e-commerce company seems poised to slowly build up sales of digital collectibles on the platform, starting with a smaller group of verified sellers on the platform. "In the coming months, eBay will add new capabilities that bring blockchain-driven collectibles to our platform," eBay exec Jordan Sweetnam told them. eBay has invested heavily in infrastructure for physical collectibles like trading cards, as well as items like sneakers and watches which they help verify for buyers.
Television

Elon Musk Begins Hosting 'Saturday Night Live' - As the World Watches 189

This afternoon Elon Musk tweeted a special URL allowing viewers outside the U.S. to simultaenously livestream his 90-minute appearance on Saturday Night Live for the first time in more than 100 countries, starting at 11:30 p.m. EST. The A.V. Club had a sardonic reaction to the livestreaming on YouTube: Good news for anyone looking at tonight's upcoming broadcast of Saturday Night Live — in which labor-busting vaccine skeptic Elon Musk will be given a platform to broadcast his techno-dystopian brain contents to the world — and thought, "Wow, there's not enough Google involved here." Well, not anymore.
Musk has already appeared in a two promos for the show. (Though CNN quips that the tonight's live show means NBC is "relying on Musk to filter his thoughts in real time, despite little evidence, historically, of him holding back on just about anything he wants to say — even when under scrutiny by federal regulators.") And the rest of the world is getting ready too. While Tesla brought the Cybertruck prototype to its New York City store, Lucid Air made plans to broadcast an ad for its coming 500-mile-range electric car that will compete with cars from Musk's Tesla.

Meanwhile, Bleeping Computer reports that Twitter scammers have been hacking into verified Twitter accounts and changing the profiles to impersonate SNL's, then replying to Musk's tweets with URL's lead to cryptocurrency giveaway scams. "We have determined that the scammers have made at least $97,054.62 over the past two days. The Ethereum giveaway scams also earned them $13,758." And the Dogecoin scammers netted at least $42,456.

And this week Slate also noted a spike in the price of Dogecoin. The joke cryptocurrency based on a shiba inu meme is up — uh, let me check — about 20 percent since this time Tuesday, has just about doubled in price since April 27, and as of this moment is up about 26,000 percent for the year (lol). It's trading around 64 cents as I type this... [I]t's probably not worth overthinking this. We're living in the stonks era. Elon is going on a sketch comedy show and is hinting that he might bring up a dumb digital token that everyone finds inherently funny. Now CNBC is hauling on experts to illuminate what the hell is going on, and members of the financial media are having to write earnest explainers about why you should invest in the dog money with caution, as if a single sane person would think otherwise.

What makes the whole rally uniquely amusing, compared with, say, the rise of Bitcoin, is that it's a willfully dumb affront not just to traditional finance, but also to the broader crypto community — which has, shall we say, mixed feelings about Dogecoin, mostly because they think it makes their project, which they tend to treat with self-righteous seriousness, look very silly... Dogecoin is the, well, underdog of the crypto world, the currency that was looked down upon by much of the Bitcoin- and Ethereum-boosting elite. Except now it has an $82 billion market cap. The dogecoiners — basically the sweet, dumb, bong-ripping frat of the crypto world — find all this hilarious.

So what will happen tonight? Ultimately castmember Michael Che, who co-hosts the show's parody newscast segment Weekend Update, joked that while some of the show's performers objected to Musk's appearance, he saw the selection of Musk as both "polarizing" and "exciting."

"You know, what's funny is that I would say I know about 20 to 25% of the white people that get to host the show anyway. So Elon, I was like, 'Oh, I know who he is at least.'"

Share your own reactions in the comments.
Bitcoin

WallStreetBets Forum Members Targeted in Telegram Cryptocurrency Scam (bloomberg.com) 26

Members of Reddit's WallStreetBets forum were targeted in a probable cryptocurrency scam that could have left its victims with at least $2 million in losses. Bloomberg reports: Using the Telegram messaging service, an account called "WallStreetBets - Crypto Pumps" offered users the chance to buy a new token known as WSB Finance before it was listed on crypto exchanges, in what is referred to as a pre-mine sale. The account isn't affiliated with the infamous stock message board. The account running the sale told users to send Binance Coin, known as BNB, or Ether to a cryptocurrency wallet and then to contact its "token bot" on Telegram to receive WSB Finance coins. Those coins were never delivered. A second message then went out on Telegram telling those that had already sent payment that because of a problem with the bot, they'd have to send an equal amount again or they would lose their initial investment. Now thousands of people are taking to Telegram to voice their regrets and try and track down the person or persons behind the account.

More than 3,451 Binance Coin tokens were removed Tuesday from the wallet listed in the Crypto Pumps messages, according to data from BscScan, a validator on the Binance Smart Chain, a blockchain network that runs so-called smart-contract applications. At Binance Coin's current price of $625, that comes to more than $2.1 million and doesn't account for any Ether the account may have been sent. The "WallStreetBets - Crypto Pumps" account has since been deleted from Telegram, but whoever controlled it left those waiting on their payouts with a clue as to where there funds were going: "Buying lambo now."

Businesses

Coinbase To Close San Francisco Offices For Good, Will Have No Headquarters (sfgate.com) 32

The biggest U.S. cryptocurrency exchange, Coinbase, has announced it will close its San Francisco offices for good. SFGate reports: The company -- founded in June 2012 by former Airbnb engineer Brian Armstrong -- has had a speedy rise to the top in the nascent crypto industry, though its practices have also sometimes stoked controversy. [...] Coinbase's 1,200 employees are now decentralizing, and the company will no longer have a physical headquarters at all. The announcement on Twitter on Wednesday that the company's Market Street offices would shutter next year wasn't a total shock. A year ago, Armstrong announced the company would be "remote first" and not have a specific headquarters. Coinbase say they will instead offer some smaller offices elsewhere, but didn't give details. "Closing our SF office is an important step in ensuring no office becomes an unofficial HQ and will mean career outcomes are based on capability and output rather than location," the company said in a statement. "Instead, we will offer a network of smaller offices for our employees to work from if they choose to."
Bitcoin

Dogecoin Spike Crashes Robinhood Token Trading (theverge.com) 64

Robinhood's trading app crashed for around an hour this morning, as Dogecoin hit record highs and Ethereum continued to gain ground. The outage is reminiscent of the Robinhood-GameStop fiasco last January, where Robinhood deliberately blocked users from trading GameStop stock as it catapulted in value. The Verge reports: Robinhood ran into issues processing cryptocurrency trades this morning, during a spike in the price of Dogecoin that sent users flocking to the app. The website DownDetector shows the outage starting around 9:30AM ET and reducing in severity about an hour later. Robinhood confirmed that it experienced a "partial outage" in crypto trading and said the issues had been resolved as of 11:15AM ET. The outage was particularly noticeable since it came during a spike (and subsequent dip) in Dogecoin prices. Coins were priced at around $0.40 USD at the beginning of the day. Around 8AM ET, they spiked past $0.50 USD and reached as high as $0.60 USD near 10AM ET.

Users were quick to voice their frustrations with the app on Twitter, seeing it as a repeat of the situation that happened in January when Robinhood limited trading on buzzy, soaring stocks, including GameStop and AMC. In the app this morning, a message told users, "We are experiencing intermittent issues with crypto trading. We are working to resolve this issue as soon as possible." Meanwhile, the price ticker on Dogecoin continued its rapid flip up and down.

Bitcoin

eBay Says It's Open To Accepting Cryptocurrencies In Future, Exploring NFTs (reuters.com) 13

EBay is open to the possibility of accepting cryptocurrency as a form of payment in the future and is looking at ways to get non-fungible tokens (NFTs) on its platform, the company said on Monday. Reuters reports: "We are always looking at the most relevant forms of payment and will continue to assess that going forward. We have no immediate plans, but it (cryptocurrency) is something we are keeping an eye on," eBay said in a statement to Reuters. In an interview with CNBC, Chief Executive Officer Jamie Iannone said that accepting virtual currency was an option the company was looking at.

EBay, which disappointed investors with a weak second-quarter profit forecast last week, said it was looking at a "number of ways" to get into the NFT space. NFTs, a type of digital asset that exists on a blockchain, have exploded in popularity this year, with NFT artworks selling for millions of dollars and musicians such as the Kings of Leon rock group embracing them for their latest album. "We're exploring opportunities on how we can enable it (NFTs) on eBay in an easy way," Iannone said on CNBC. "Everything that's collectible has been on eBay for decades and will continue to be for the next few decades."

Bitcoin

Ether Hits $3,000 as Bitcoin's Crypto Dominance Declines (bloomberg.com) 71

Bitcoin's domination of total cryptocurrency market value is declining as its next-biggest rival Ether reaches the $3,000 milestone. From a report: The rise of Ether suggests there's room for more than one winner among digital tokens as the sector evolves. Bitcoin now accounts for about 46% of total crypto market value, down from roughly 70% at the start of the year, and Ether makes up 15%, according to tracker CoinGecko. Bitcoin remains the biggest cryptocurrency but the momentum in other tokens is drawing increasing interest. Proponents argue investors are getting more comfortable with a variety of tokens, while critics contend the sector may be in the grip of a stimulus-fueled mania. Cryptocurrencies were broadly higher on Monday. Bitcoin climbed above $58,000, while Ether jumped 6% to $3,151 as of 8:17 a.m. in New York. "Ethereum is rising and not much seems to be in its way," Edward Moya, a senior market analyst at Oanda, wrote in a note Friday, adding that other tokens were also seeing "fresh interest." The current distribution of market share also reflects an April shakeout in the cryptocurrency sector. Bitcoin has yet to recover all the ground it lost after tumbling from a mid-April record of almost $64,870.
Bitcoin

Tesla Has Already Sold 10% of Its Bitcoin (msn.com) 81

Newsweek writes: Elon Musk has hit back at a critic who claimed he pumped and dumped Bitcoin to "make a fortune" after Tesla reported first quarter earnings that surpassed market expectations... The company appears to have sold 10 percent of its Bitcoin portfolio in the first quarter, which it said had a "positive impact" of $101 million on revenues.

On Monday, Dave Portnoy, founder of Barstool Sports, called out Musk, CEO of Tesla, on the Bitcoin sale. He tweeted: "So am I understanding this correctly? Elon Musk buys Bitcoin. Then he pumps it. It goes up. Then he dumps it and makes a fortune." Musk replied: "No, you do not. I have not sold any of my Bitcoin. Tesla sold 10 percent of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet."

In a transcript of the Q1 2021 earnings call posted by the Motley Fool, Tesla CFO Zachary Kirkhorn said the company intends to hold its Bitcoin investment long-term and called it "a good place to place some of our cash that's not immediately being used for daily operations".

Bitcoin was worth roughly $40,000 in early February at the time Tesla's $1.5 billion investment was reported.

The Almighty Buck

CNN Says 'Move Over, Bitcoin. Ethereum is at an All-Time High' (cnn.com) 104

CNN writes: Bitcoin prices continued their rebound Saturday, rising about 6% to nearly $58,000. But the world's largest cryptocurrency has been overshadowed lately by its younger sibling, Ethereum.

Ethereum, or ether for short, hit a new record high Saturday of just over $2,900. Ether prices have nearly quadrupled in 2021, soaring 290%. Bitcoin has had a great run too this year, doubling in value.

The total value of all Ethereum in circulation is now about $333 billion, according to CoinMarketCap. Bitcoin's market value is nearly $1.1 trillion. While there are thousands of cryptocurrencies — including the Elon Musk tweet-fueled Dogecoin — Bitcoin and ether account for nearly two-thirds of the entire $2.2 trillion global crypto market...

Ethereum has enjoyed an even bigger surge than Bitcoin because it is the cryptocurrency of choice for the purchases of many non-fungible tokens, or NFTs — which have taken the art and broader collectibles world by storm.

Bitcoin

The IRS Wants Help Hacking Cryptocurrency Hardware Wallets (vice.com) 66

An anonymous reader quotes a report from Motherboard: The IRS is looking for help to break into cryptocurrency hardware wallets, according to a document posted on the agency website in March of this year. Many cryptocurrency investors store their cryptographic keys, which confer ownership of their funds, with the exchange they use to transact or on a personal device. Some folks, however, want a little more security and use hardware wallets -- small physical drives which store a user's keys securely, unconnected to the internet. The law enforcement arm of the tax agency, IRS Criminal Investigation, and more specifically its Digital Forensic Unit, is now asking contractors to come up with solutions to hack into cryptowallets that could be of interest in investigations, the document states.

"The decentralization and anonymity provided by cryptocurrencies has fostered an environment for the storage and exchange of something of value, outside of the traditional purview of law enforcement and regulatory organizations," the document reads. "There is a portion of this cryptographic puzzle that continues to elude organizations -- millions, perhaps even billions of dollars, exist within cryptowallets." The security of hardware wallets presents a problem for investigators. The document states that agencies may be in possession of a hardware wallet as part of a case, but may not be able to access it if the suspect does not comply. This means that authorities cannot effectively "investigate the movement of currencies" and it may "prevent the forfeiture and recovery" of the funds. "The explicit outcome of this contract is to tame the cybersecurity research into measured, repeatable, consistent digital forensics processes that can be trained and followed in a digital forensics' laboratory," the document says.

Crime

Feds Arrest an Alleged $336M Bitcoin-Laundering Kingpin (wired.com) 73

An anonymous reader quotes a report from Wired: For a decade, Bitcoin Fog has offered to obscure the source and destination of its customers' cryptocurrency, making it one of the most venerable institutions in the dark web economy. Now the IRS says it has finally identified the Russian-Swedish administrator behind that long-running anonymizing system and charged him with laundering hundreds of millions of dollars worth of bitcoins, much of which was sent to or from dark web drug markets. What gave him away? The trail of his own decade-old digital transactions.

US authorities on Tuesday arrested Roman Sterlingov in Los Angeles, according to court records, and charged him with laundering more than 1.2 million bitcoins -- worth $336 million at the times of the payments -- over the 10 years that he allegedly ran Bitcoin Fog. According to the IRS criminal investigations division, Sterlingov, a citizen of Russia and Sweden, allowed users to blend their transactions with those of others to prevent anyone examining the Bitcoin blockchain from tracing any individual's payments. He took commissions on those transactions of 2 to 2.5 percent. In total, the IRS calculates, Sterlingov allegedly took home roughly $8 million worth of bitcoin through the service, based on exchange rates at the times of each transaction. That's before factoring in Bitcoin's massive appreciation over the past decade. Ironically, it appears that the 2011 transactions Sterlingov allegedly used to set up Bitcoin Fog's server hosting are what put the IRS on his trail. Of the $336 million the complaint accuses Bitcoin Fog of laundering, at least $78 million passed through the service to various narcotics-selling dark web markets like the Silk Road, Agora, and AlphaBay over the years that followed. The IRS also appears to have used undercover agents in 2019 to transact with Bitcoin Fog, in one case sending messages to Bitcoin Fog's administrator that explicitly stated that they hoped to launder proceeds from selling ecstasy. Bitcoin Fog completed that user's transactions without a response.

Most remarkable, however, is the IRS's account of tracking down Sterlingov using the very same sort of blockchain analysis that his own service was meant to defeat. The complaint outlines how Sterlingov allegedly paid for the server hosting of Bitcoin Fog at one point in 2011 using the now-defunct digital currency Liberty Reserve. It goes on to show the blockchain evidence that identifies Sterlingov's purchase of that Liberty Reserve currency with bitcoins: He first exchanged euros for the bitcoins on the early cryptocurrency exchange Mt. Gox, then moved those bitcoins through several subsequent addresses, and finally traded them on another currency exchange for the Liberty Reserve funds he'd use to set up Bitcoin Fog's domain. Based on tracing those financial transactions, the IRS says, it then identified Mt. Gox accounts that used Sterlingov's home address and phone number, and even a Google account that included a Russian-language document on its Google Drive offering instructions for how to obscure Bitcoin payments. That document described exactly the steps Sterlingov allegedly took to buy the Liberty Reserve funds he'd used.

Bitcoin

A Second Bitcoin Exchange Collapses In Turkey Amid Crackdown On Cryptocurrencies (cnbc.com) 52

An anonymous reader quotes a report from CNBC: A second cryptocurrency exchange has collapsed in Turkey amid a crackdown on the industry. The platform, Vebitcoin, said in a brief statement on its website that it has ceased all activities after facing financial strain and that it would update clients on the situation as soon as possible. Days earlier, Thodex, went offline with its CEO reportedly leaving the country. Local media reports say Thodex founder Faruk Fatih Ozer flew to Albania, taking $2 billion of investors' funds with him. Turkey has issued an international arrest warrant for Ozer, while 62 people were detained in connection with complaints filed against Thodex.

Turkish authorities have blocked Vebitcoin's domestic bank accounts and detained four people as part of a probe into the exchange, Reuters reported Saturday. According to CoinGecko data, Vebitcoin had almost $60 million in daily trading volumes prior to its collapse. Some Turks have turned to crypto as a way to protect their savings from skyrocketing inflation and the weakening of its currency, the lira. But there have been growing calls for regulation of the market due to concerns around fraudulent activity. Earlier this month, Turkey's central bank banned the use of digital assets for payments. And President Recep Tayyip Erdogan has called for swift regulation, warning of pyramid schemes emerging in the crypto markets.

Security

Ransomware Gang Threatens To Expose Police Informants If Ransom Is Not Paid (therecord.media) 52

An anonymous reader writes: A ransomware gang is threatening to leak sensitive police files that may expose police investigations and informants unless the Metropolitan Police Department of the District of Columbia agrees to pay a ransom demand. A group that emerged this year called Babuk claimed responsibility for the leak. Babuk is known for ransomware attacks, which hold victims' data hostage until they pay a ransom, often in Bitcoin. The group also hit the Houston Rockets N.B.A. team this month.

In their post to the dark web, Babuk's cybercriminals claimed they had downloaded 250 gigabytes of data and threatened to leak it if their ransom demands were not met in three days. They also threatened to release information about police informants to criminal gangs, and to continue attacking "the state sector," including the F.B.I. and the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency. The information already released appeared to include chief's reports, lists of arrests and lists of persons of interest.

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