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Industry Report: Big Bounty May Help Bitfinex Get its Money Back

Source: bitcoin

Industry Report: Big Bounty May Help Bitfinex Get its Money Back

A Bitfinex bounty, Russia changes its stance on bitcoin, and a rough fate lies ahead for an alleged Silk Road forum operator. Want to catch up on your latest digital currency news? Take a look below.

Also read: Industry Report: Bitfinex Forces Customers to Pay for Hack Losses


Hong Kong exchange Bitfinex has announced a $3.5 million bounty reserved for anyone who can help in their investigation to uncover the $72 million stolen from customer wallets last week. Explaining the terms, Director of Community and Product Development Zane Tackett states:

“5% of recovery and for information leading to recovery (but no bounty if no recovery); if multiple persons lead to recovery, share pro rata.”

Tackett is also refusing to draw up a contract offering explicit details until he can consult with the rest of the team.

In a related story, a bitcoin miner at Hashocean seems to have disappeared with millions of dollars in investors’ money. The website is down, reporting an error message when visited, and the miner has left no trace. Users are working hard to find the truth and earn their funds back.


After years of saying, “We hate bitcoin,” Russia is reversing its stance on the digital currency and potentially revoking its plan to penalize users. In the past, Russian authorities have sworn to enforce fines and even hand out prison time for those who indulge in the art of cryptocurrency, but now the country seems to be having a change of heart. Rather, financial experts have suggested taxing bitcoin over penalizing it. Sources explain:

“Resident natural persons are obliged to provide reports to tax authorities located at the place of their registration as to account moves through banks beyond the Russian Federation pursuant to the procedures established by the Decree of the Government of the Russian Federation No. 1365 dated 12.12.2015.”

While nothing has been set in stone, the idea is that if tax-hounds get their way, criminalizing bitcoin will have to be put on hold or discarded fully. Obviously, authorities can’t have it both ways.


28-year-old Irishman Gary Davis is set to be extradited and sent back to the U.S. for questioning regarding his alleged role with Silk Road. He has been charged with conspiracy to distribute illicit drugs, computer espionage, and money laundering.

According to the FBI, Davis worked as a Silk Road forum operator under the name “Libertas,” and had a personal relationship with Ross Ulbricht. David denies all allegations and is looking to appeal his case to the High Court. He explains:

“The prospect of being torn from my support network here in Ireland, which is essential for my mental well-being, flown halfway across the world, and being dumped into an American Gulag to rot while facing outrageous charges is gut-wrenching in the extreme. The conditions in the Metropolitan Correctional Center, New York, where I would be held post-extradition and pre-trial, are deplorable.”

Know of any stories that belong in our regular industry report pieces? Post your comments below!

Images courtesy of, IrishTimes.

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Industry Report: Big Bounty May Help Bitfinex Get its Money Back

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Industry Report: How China, France, and the FBI Do Bitcoin

Source: bitcoin

Bitcoin Industry Report

China loves digital currency, France wants to fight it, and the FBI doesn’t know how to handle it. Want to catch up on your latest digital currency news? Check out the stories below.

Also read: Industry Report: Bitcoin Thieves Abound As Popularity Skyrockets


China has proposed a new civil law that recognizes the people’s right to own virtual assets. This includes bitcoin and additional cryptocurrencies.

The civil code was introduced in the National People’s Congress on June 27 and states that all virtual and physical financial entities possess equal status. In other words, you can own bitcoin, and you can own yuan. Either way, they’re both money and they’ve both been created for the same purposes.

OKCoin founder Star Xu was enthusiastic about the law, stating:

“Since the Chinese laws have not clearly defined the virtual asset in the past, property disputes involving ‘virtual commodities’ are difficult to be resolved under the existing law. This proposed new civil law draft, which includes digital assets with legal rights, will contribute to the protection of such property rights while also establishing a framework for the development of future specific rules.”


Despite the light in China, there’s a dark sky hovering over Paris. Bernard Debre of the National Assembly of France wants to place a ban on bitcoin in the city of Paris, fearing its use will lead to online drug purchases. Debre believes drug trafficking is at an all-time high. He’s also aiming to shut down “La Maison du Bitcoin” (the house of bitcoin), a bitcoin-advocacy organization operated by Ledger.

Following the terrorist attacks of last year, Debre is hard on his stance, and proposing that the country takes a legislative approach towards stopping anything that could further criminal activity.


Three years have gone by since the original Silk Road went offline. Ross Ulbricht is behind bars, and yet this story hasn’t come to a definite close.

Gary Davis, allegedly known as “Libertas” on the darknet market, is presently fighting his extradition to the U.S. He will not be charged for his involvement in Silk Road if he’s successful in his process.

Back in 2013, Microsoft was issued a warrant when the DOJ wanted to investigate a particular Outlook account belonging to Gary Davis. The case to which the investigation pertained was never revealed to Microsoft, and the company is now seeking legal assistance regarding what they say was a “breach of privacy.”

The case is in the hands of the US Court of Appeals and is likely to set new precedents for the technology industry. The outcome should be decided in July, and Microsoft is receiving support from several technology companies ranging from Apple to Cisco and AT&T.

Know of any stories worthy of being included in our regular industry reports? Post your thoughts and comments below!

Image courtesy of Alexandre Beaudry blog.

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FBI Director: “Encryption is Essential Tradecraft of Terrorist Groups”

Source: bitcoin


Law enforcement has been making a lot of media headlines as of late in their “war’ on encryption. FBI Director James Comey mentioned how encryption is “essential tradecraft” of terrorist groups, and more requests to access electronic devices will be part of the future.

Also read: Talking Crix with Founder Dmitry Koval

FBI Still Wants To Gain Access To Encrypted Devices

Although it is not the first time debate ensues over what the FBI wants to do, and what consumers feel they should have access to, it looks like there is no end in sight for these discussions. In fact, things may be taken to the next level, as FBI Director James Comey mentioned how there will be “more US government Litigation over accessing electronic devices”.

But that is not all, as Comey feels tech companies can be compelled to unlock personal devices in the interest of national security. Some people may argue that encrypted forms of communication facilitate terrorist groups to coordinate their attacks, but at the same time, this type of encryption provides all consumers with privacy protection.

Comey even went as far as saying how WhatsApp’s end-to-end encryption is affecting the criminal work of the FBI in huge ways. However, there are no plans to take matters to court just yet,  which may not bode well for the future. So far, the Bureau has been able to unlock close to 500 out of 4,000 examined devices, which is a higher percentage than most people may have anticipated.

Perhaps the most interesting statement made by Comley is the following:

“Encryption is an essential tradecraft of terrorist groups, such as Islamic State. The number of Americans trying to join Islamic state has dropped to one per month since August of 2015, compared to between six and 10 per month in the previous 18 months. I think the ISIL brand has lost significant power in the United States.”

One thing worth noting is how none of the unlocked devices have the same model and operating system as the iPhone used in the San Bernardino case. That being said, the FBI will is still actively working on a way to use the same tool used in that case in an attempt to unlock other devices by different manufacturers.

What are your thoughts on the FBI’s crusade against end-to-end encryption? Let us know in the comments below!

Source: Reuters

Images courtesy of Shutterstock, FBI

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FBI Director: “Encryption is Essential Tradecraft of Terrorist Groups”

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FBI Used Invalid Warrant To Infect Tor Website With Malware

Source: bitcoin

Bitcoinist_Tor Hack Malware

Malware is a grave threat to computer users all over the world, and even law enforcement does not shy away from using this technique to hack Tor and obtain sensitive information. But at a recent Massachusetts court has determined, this method of acquiring evidence is not legal.

Also read: Duo Search Is A Search Engine For OpenBazaar

Evidence Acquired Through Tor Hack Thrown Out

Even though the malware threat against consumers is worrying enough when internet criminals are involved, it becomes even more disconcerting when law enforcement decides to join the party. The FBI recently acquired a substantial amount of evidence in a child porn case and presented this information in court not too long ago.

But that was not to the liking of the Massachusetts court, as they threw out all of this evidence. Law enforcement hacking operations are not entirely new, although they are hardly an excuse to disallow evidence from being presented in court. In fact this decision marks the first time a court denies evidence obtained through a cyber attack by law enforcement.

Some people may recall how the FBI took control of a child porn service called Playpen not that long ago. This service, only accessible through the Tor protocol, was infiltrated to gain access to pedophiles’ computers all over the world. By collecting several thousand IP addresses, the FBI managed to arrest a significant amount of pedophiles in the US.

However, asking permission to hack computers belonging to Playpen users required approval from a district judge, rather than a magistrate. This puts an interesting spotlight on why this particular magistrate authorized the Tor hack, as he does not have the legal right to do so. Moreover, there are several different district judges housed in the same building as this magistrate.

This invalid search warrant results in most of the evidence in this case being thrown out. Considering how the FBI added malware to the Playpen site to infiltrate other computers, none of the information gathered during this attack can be used. For now, only one of the people arrested has pointed out this issue, but it is not unlikely others will follow suit.

It is not the first time the FBI is involved in a Tor breach. Just a few weeks ago, one judge ruled how the FBI and Carnegie Mellon University were in cahoots to breach the Silk Road marketplace, which eventually lead to the arrest of Ross Ulbricht. It is clear for everyone to see US law enforcement is taking a lot of liberties when it comes to cyber security and hacking, but their free reign might be coming to an end sooner rather than later.

What are your thoughts on the court throwing out this evidence? Will this lead to more thorough investigations as to how law enforcement gathers data? Let us know in the comments below!

Source: Engadget

Images courtesy of Shutterstock, FBI

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FBI Used Invalid Warrant To Infect Tor Website With Malware

Úno 24

Bitcoin Ransoms Target Swiss Strip Club Patrons

Source: bitcoin

Bitcoin Ransoms Target Swiss Strip Club Patrons

In a report coming from the Switzerland TV channel, Tele Zueri says visitors of the region’s largest strip club are being blackmailed. It’s said that roughly 50-60 people who frequented the Globe in Schwerzenbach, near Zurich received extortion letters asking for $2,000 in Bitcoin.  

Also read: LimoPlay Launches World’s first 3D Slot Game

Strip Clubs and Hospitals Asked to Pay Bitcoin Ransoms

Hackers using pictures of patrons that visited the Swiss strip are being used against them. The nightclub’s manager Fritz Mueller spoke with NBC News about the situation saying the letters stated that they would “destroy” people’s lives. The Swiss TV channel Tele Zueri says the letters are asking for the equivalent of USD $2,000 in Bitcoin to be paid within five days. Swiss media reports the letters state:

“We know who you are and what you did, We are moralists, and you are our target, We hope that you are not suffering from amnesia. Otherwise, we need to jog your memory with a few photos.” — Strip Club Ransom Letter

The letters were sent to customers visiting the club and threatened reputational much damage if the person ignored the attempt to collect. The letters conclude, “We will destroy your life, the way you do it with others.” The nightclub owner says that it’s possible the hackers gained people’s information by license plate numbers found outside in the parking lot. Mueller states that security has been beefed up since the incident with cameras and mobile phones banned from the premises. NBC had contacted the Zurich prosecutor’s office who said “several affected people’s,” letters were being investigated. The media outlet also states that several nightclubs were also targeted in Switzerland with similar threats.

This news comes shortly after the Hollywood Presbyterian Medical Center staff had realized their system had been compromised with ransomware. On February 5th, the hackers demanded the Los Angeles hospital pay USD $17,000 in Bitcoin to get the Medical Center’s computer files back. In a statement, the hospital said a malware locking mechanism had prevented operations from continuing and they were unable to work with patients fluidly. Subsequently, the medical center paid the ransom to regain authority to the network. The president of Hollywood Presbyterian Medical Center explained:

“The quickest and most efficient way to restore our systems and administrative functions was to pay the ransom and obtain the decryption key. In the best interest of restoring normal operations, we did this.”  — Allen Stefanek, Hollywood Medical

Stefanek said the electronic data was fully restored after the payment was made and they had contacted law enforcement officials concerning the issue. The Federal Bureau of Investigation (FBI) has also said to be looking into the hospital cyber-crime. In October of 2015, the FBI had advised ransomware victims to pay the extortion threats. Joseph Bonavolonta of the FBI’s CYBER Counterintelligence program said back then, “The ransomware is that good. To be honest, we often advise people just to pay the ransom.”

Whatever the case may be these stories are not giving Bitcoin a good reputation even though it happens quite frequently with credit cards and prepaid cards as well. However, the crime continues to increase in popularity with the use of cryptocurrency. Swiss news reports did not detail if there were individuals advised to pay the ransom but officials are reviewing each case.   

What do you think about the latest ransomware news? Let us know in the comments below.

Images courtesy of, Shutterstock, and Pixbay


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Bitcoin Ransoms Target Swiss Strip Club Patrons

Úno 17

Apple Responds to FBI Backdoor Order in Effort to Save PR

Source: bitcoin

Apple Responds to FBI Backdoor Order in Effort to Save PR

 February 17, 2016 — Apple is no stranger to handing over its users’ sensitive data to government – they went live on the NSA’s PRISM program back in late 2012, stated in their TOS and EULA documents that there should be expectation of privacy while using their services, and follow the common industry practice of handing over sensitive information they have on file with the issuance of a warrant. So the decision to reject a court ordered backdoor that would allow brute force decryption of their phones, accompanied by an open letter to Apple customers from CEO Tim Cook explaining their stance on the matter, has come as a surprise to many.

Also read: itBit to Expand Blockchain Operations Abroad

Apple’s Long History of Giving up User Data

Apple CEO Tim Cook

The order arrives in the aftermath of the San Bernadino Shootings. Many thought initially that the court was asking Apple to do the impossible: pull private keys out of thin air to give investigators access to the Shooters’ encrypted data, which would have demonstrated a laughable lack of understanding of the data encryption process on the FBI’s part. The open letter from Cook indicates that the government request is much more competent and insidious, though:

“Specifically, the FBI wants us to make a new version of the iPhone operating system, circumventing several key security features, and install it on an iPhone recovered during the investigation. In the wrong hands, this software — which does not exist today — would have the potential to unlock any iPhone in someone’s physical possession.”

Essentially, the court order mandates that Apple cooperates in assisting in the creation of a backdoor that would allow brute force decryption of any iPhone, which would be a disaster for Apple customers everywhere. It’s easy to see why Apple seems to have shifted its stance on privacy in this case: cooperation would, in addition to being a PR nightmare, but be setting a disturbing precedent that would allow law enforcement to circumvent 4th amendment rights even further, with corporate assistance. The FBI is citing the All Writs Act of 1789 to justify this court order, contending that the software backdoor is somehow a necessary act in analyzing their evidence.

Secure data, something that has been traditionally protected by 4th and 5th amendment rights, has been accessed previously through use of this law, including one case involving an iPhone 5s in 2014. Since that time, Apple has shifted its stance on personal information handoffs, and this is the first example where they’ve followed through on their new stated policies. While it is refreshing to see a multinational corporation defend it’s customers’ privacy, this protection of individual data may seem counter-intuitive to those who follow Apple’s data collection and analysis practices.

Remember: Apple is an information broker as much as they are a hardware and software company. They do sell their users’ data and metrics, and will continue to do so for the foreseeable future. The problem here is that they lose their information collection capability if people stop using their phones because anyone can crack the built-in encryption. If people perceive your product as insecure and fundamentally flawed, they move away from your ecosystem, and if anyone has access to the information you’re trying to sell, it becomes much less valuable. The move to protect user data, in this case, makes as much sense for their data collection infrastructure as it does from a PR and best practices standpoint.

While it is nice to see Apple stand up to government pressures to invalidate user privacy, know that it is only because it serves Apple’s interests. They have a far from stellar track record when it comes to user data protection. For now, their goals dictate keeping strong encryption on their devices, but that has not and will not always be the case. Their policy on encryption will likely change with their corporate interest as it has several times in the past. Of course, this shifting stance on consumer rights is not unique to Apple, but in recent times, they’ve had the most extreme turnabout.

What do you think about this letter from Apple? Let us know in the comments below!

Images courtesy of Apple

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Apple Responds to FBI Backdoor Order in Effort to Save PR

Úno 11

Encryption is Keeping Global Leaders In the ‘Dark’

Source: bitcoin

Encryption is Keeping Global Leaders In the ‘Dark’

February 11, 2016 The use of encryption whether in messaging applications, using Bitcoin and other methods of privacy-centric technology continues to bother global leaders. Some of these technical advances have given authorities the opinion that they are being kept in the “dark.” Now Government officials in the U.S. are proposing to increase their funding to crack today’s encryption methods and enhance security. The Obama administration’s latest proposal the “Cybersecurity National Action Plan” details that the president believes cybersecurity is a difficult challenge for America.

Also Read: Coinbase CEO Brian Armstrong Announces Switch to Bitcoin Classic

The White House is just one group of authority figures who wants to up cybersecurity funding. The FBI according to their recent memo would like to add $38 million more to their budget to help crack encryption. In the report, it mentions how encryption is on the rise and this, in turn, is making data collection harder. In a section called “Going Dark” addressing the issue the paper reads in request for the $38 million in funding:


Going Dark: $38.3 million — The requested funding will counter the threat of Going Dark, which includes the inability to access data because of challenges related to encryption, mobility, anonymization, and more. The FBI will develop and acquire tools for electronic device analysis, cryptanalytic capability, and forensic tools.” — Federal Bureau of Investigation

Since the Paris attacks and other unfortunate events bureaucrats have been promoting the idea that encryption should be breakable by government officials. Many bureaucrats such as the U.K.’s David Cameron, presidential candidate Hillary Clinton, and others have objected against strong encryption. Officials over the past year have pressed technology related businesses to allow authorities access to cracking device encryption. Executives like Apple’s current CEO and many others have been against this approach of handing over inaccessible data over to federal agents. However in its latest press release, the Obama administration’s statement on cybersecurity says they will be partnering with giant tech companies to advance the government’s goals. Firms such as Google, Facebook, DropBox, and Microsoft are mentioned in the White House brief. However, the Obama administration bolsters the use of two-factor authentication to be used by citizens and organizations within the nation and is mentioned multiple times. But due to increased levels of malicious hacking, identity theft and terrorism the White House wants to boost funding to fight against these crimes. The press release reads:

“The Department of Justice, including the Federal Bureau of Investigation, is increasing funding for cybersecurity-related activities by more than 23 percent to improve their capabilities to identify, disrupt, and apprehend malicious cyber actors.” — White House Cybersecurity Action Plan

In a recent article from the publication, Motherboard Vice an FBI official explains that the increased funding will be used for hacking tools. In an encrypted chat Christopher Soghoian, a technologist from the American Civil Liberties Union told the online magazine, “The days of reliable wiretaps are vanishing. [Hacking] is the next best thing for the FBI.” Officials are finding that they have to compete with the level of technology to apprehend these types of criminals. The FBI believes their request for increased funding is valid and empowers their services to keep up with the technological times. The FBI states:

“This combination of authorities gives the FBI the unique ability to address national security and criminal threats that are increasingly intertwined and to shift between the use of intelligence tools, such as surveillance or recruiting sources, and law enforcement tools of arrest and prosecution. The FBI can shift seamlessly between intelligence collection and action allowing the agency to continue gathering intelligence on a subject to learn more about his social and financial network, and shift gears quickly to make an arrest if harm to an innocent person appears imminent.” — Federal Bureau of Investigation

Encryption is growing popular and governments all across the globe are feeling kept in the dark. These new proposals and policy regulations may affect technology like cryptocurrency, private messaging, and anything with a level of encryption. Many people believe that cryptography has protected our private affairs and civil liberties, so this war against the use of it will not happen without a fight.

What do you think about the federal government’s increased measures to stay ahead of encryption? Let us know in the comments below.   

Images courtesy of Pixbay, Shutterstock and Wiki Commons


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Encryption is Keeping Global Leaders In the ‘Dark’