FTX: What Does B Stand For?
December 2, 2022
I am not a krypto kiddie. After the mysterious Nakamoto white paper became available, I made an informed judgment: Bad actors will love this crypto thing. My hunch was correct. The meltdown of a crypto wizard and his merry band of tea totaling worker bees have demonstrated that cyber fraud can be entertaining.
I read “Does B Stand for Bankman-Fried or Bankruptcy?” The write up asks a simple question. I noted this passage from the “real” Silicon Valley write up:
SBF said FTX failed on risk management and he didn’t “knowingly co-mingle funds.”
There you go.
Now what does B stand for? Here are my suggestions:
bamboozle – to rip off, fool, or deceive
bane – a source or ruin, harm, or evil
baseborn – a nice way to question one’s family position in society
bebotherer – one who brings trouble
besotted – drunk and incoherent
bonkers — a few cans short of a six pack
brock—a nasty, little, furred creature
I am leaning toward bamboozle but I think brock has a certain charm. Perhaps a combo; to wit:
The brock bamboozled himself and others.
Close enough for horseshoes as the “we’re not talking” analytics folks like to say among friends at lunch.
Stephen E Arnold, December 2, 2022
Why Did Smart People Fall For The FTX Scam? Uh, Maybe Greed?
November 29, 2022
When we hear how people fall for scams, we tell ourselves that we are too smart and will never become a victim of one. Despite our intelligence, we all become scam victims at some point in our lives. Hopefully, the aftermath is no more devastating than broken pride and a well-learned lesson. Unfortunately, investors in the FTX crypto currency have lost everything like people in the 1930s Depression. The Guardian expresses why FTX lured so many people: “Why Were So Many Smart People So Dumb About FTX? Did They Seriously Just Like Sam Bankman-Fried’s Vibe?”
Area Mahdawi wrote the editorial about crypto currencies and she immediately rips into Sam Bankman-Fried’s unprofessionalism. The FTX inventor played videogames during business meetings. That does not inspire confidence. Large investors threw money at him and he was described as the “next Warren Buffett” and it was believed he could become the world’s first trillionaire.
Behind the proverbial curtain, Bankman-Fried was pulling a typical scam: shifting funds from FTX to his other company, Alameda Research. He then made risky risky trades and lost billions! His net worth fell from $16.2 billion to $3. Bankman-Fried lived a luxurious life a lá Anna Delvey in the Bahamas with his nine employees and they all had various romantic relationships with each other.
Mahdawi thinks people fell for Bankman-Fried for two reasons:
- They didn’t understand what he was selling, so that meant he was a genius.
- They liked his charisma.
Some investors were impressed that Bankman-Fried played videogames during meetings. Why? Maybe he conveyed an autistic savant vibe that appeared he could crunch the numbers and do magic tricks. Mahdawi said this would not have happened to other people, especially women:
“I don’t know about you, but I’m having one of those want-to-tear-my-hair-out-with-frustration moments right now. Can you imagine a woman playing video games in a meeting and being handed billions by investors? That would never happen. Last year, female founders secured only 2% of venture capital in the US and I’ll bet you everything I have that those founders were as buttoned-up as you can get. I’ll bet you they didn’t get a billion dollars because people “just liked their vibe”.”
She’s right, but also wrong. It depends on the person handing out the loans and the office politics. As to why the people invested their money with the scam artist, they wanted to make more money. Chalk it up to simple greed. Greed is good too.
Whitey Grace, November 30, 2022
Europol Take Down Despite a Bad Actor Haven, Encryption, and Modern Business Methods
November 28, 2022
First, Europol and a group of investigators shut down a drug operation. “Operation Desert Light: Europol Take Down Massive Cocaine Super Cartel” reported:
…49 people were arrested across six European countries, the EU’s police agency, Europol, said.
The somewhat terse news story referenced a couple of factoids that I found interesting:
- The article mentioned that there were six senior criminals running the operation. This to me suggests what I call in my lectures to law enforcement and intelligence professionals “industrialized crime.” The idea is that the precepts and methods are ones widely used by successful businesses. Just as the ideas about engineering efficiency and MBA profit maximization have diffused in legitimate enterprises, bad actors have been good students and implementers.
- One bad actor fled Europe and operated from Dubai. Dubai has, for some including this particular bad actor, has become a destination of choice for some pursued by authorities representing other countries. What makes Dubai a possible safe haven? What additional steps are needed to reduce the appeal of Dubai and certain other countries?
- The article mentions “encrypted phones.” In my lectures, I discuss the Teflon effect of secure mobile devices and digital currencies which I describe as Bitcoin or variants.
Net net: More direct action by governments is necessary to [a] speed up investigations and [b] remove barriers to appropriate surveillance by direct and indirect methods. Crime is an emergent feature of online systems and services. To prevent criminal activity from becoming the dominant feature of online, a rethink of systems and methods may provide fruitful.
Just my opinion.
Stephen E Arnold, November 28, 2022
AI: Technology Is Neutral, Right?
November 28, 2022
AI technology can be a boon to many—including cybercriminals. The SmartData Collective describes “3 Ways AI Has Led to Horrifying Cybersecurity Threats.” Writer Alexander Bekker warns:
“The last thing you want is to be hacked by cybercriminals and have your company’s and customers’ data fall into the wrong hands. In order to prevent this from happening, it is important to be aware of any current digital security threats. Sadly, AI technology is only making cybersecurity threats worse than ever. Bob Violino wrote an article in CNBC that said both cybersecurity experts and black hat hackers are using AI technology. However, cybercriminals seem to be benefiting the most from AI, which means that cybersecurity experts need to be more diligent and innovative to use it effectively. With this in mind, let’s start by looking at three of the top current digital threats that are becoming worse due to AI technology, as well as how to prevent them from happening to your company:”
At the top of the list is ransomware, an already robust threat which can be turbocharged with AI automation. Most ransomware attacks begin with phishing emails, so companies must train workers to recognize those tricks. Regular backups will ensure a firm can recover data if someone does slip up. Bekker also mentions credential stuffing, wherein hackers acquire credentials stolen from one company and use them to access another. Machine learning algorithms help criminals make connections between organizations much faster than before. To guard against these attacks, companies should require multi-factor authentication and make sure no one reuses passwords for different websites. This advice brings us to the final culprit, poor cyber hygiene. Some algorithms specialize in pinpointing targets with weak security practices. We are reminded:
“To help improve cyber hygiene, start by requiring two-factor authentication, use a password manager program, and ask that employees not use personal devices for work. Also, to help ensure that hackers will not be able to gain access to usable information, it is important to make sure that your company SSL certificates are current.”
As these bad bots continue to grow more sophisticated, best security practices become even more important. Even if they do not become any less tedious.
Cynthia Murrell, November 28, 2022
Is This FTX Math?
November 21, 2022
I recall hearing or reading that the top dog of Aurora, the FTX affiliated entity, thought that running a crypto outfit required basic math skills. I read “FTX Owes more than $3 Billion to Top 50 Crypto Creditors.” The write up points out:
Roughly 1 million customers unable to withdraw funds from crypto currency exchange
Okay, let’s do some modern day basic math. Follow along:
- 50 kind hearted and understanding creditors
- $3 billion in US dollars or a suitable equivalent like Teslas or designer bags
- One Enron experienced super manager.
Now the math:
50 times $3 billion equals 20 years
I will get a middle school student to check my math. I may be off a few years with the prison sum.
Stephen E Arnold, November 21, 2022
Does Medium Promote Stolen Software?
November 21, 2022
I read “Bigasoft Total Video Converter 6.4.2.8118 Crack with Serial Key 2023.” The main idea of the write up is that a reader of this Medium article can steal intellectual property. The tip off for a human subject matter expert reviewing content for appropriateness or smart software jazzed on Snorkelesque magic would probably note the word “crack” and the phrase “with Serial Key 2023.” The fact that this article appears on Medium is probably something will annoy the developers of Bigasoft’s video converter. My hunch is that a legal eagle may want to call this Medium oversight to the attention of a responsible adult at the zippy alternative to an old school magazine. What does this somewhat obvious invitation to steal software say? I quote:
Bigasoft Total Video Converter Keygen is compatible with all versions of Windows and runs smoothly on Mac….After reading the installation instructions below, you may install this application since it is effortless. You get TipuCrack from it….
Yeah, this seems clear. Am I missing something that makes this type of theft advocacy okay? I hope my link goes dead because that shows a modicum of ethical behavior.
Stephen E Arnold, November 21, 2022
Simplifying the Geometry of Conscience
November 14, 2022
My first brush with crypto currency was a request to include the topic in a lecture for an outfit running international training programs for law enforcement and intelligence professionals. In 2013, I was in my first year of retirement and interested in what I called CyberOSINT. My definition of the term pivoted on the companies providing tools and software to deal with was grouped under the category of cyber crime. A decade ago, cyber crime was big, but it was propelled by what now seems to have been bad actor minnows.
The hot topics were the Dark Web, forums offering tips and tricks for hacking, and CSAM (child sexual abuse material). Digital currency, specifically Bitcoin, was the lubricant for cyber crime. Therefore, my team and I had no choice but take a look at the Nakamoto white paper, poke into the universities in England beavering away on techniques to deanonymize individual transactions, and the early research efforts of everyone’s favorite online bookstore Amazon. We attended meet ups about digital currency and spoke with seemingly well meaning people who were excited about doing money things without annoying intermediaries and regulatory authorities.
It became clear at least to me and my team that digital currency would become a replacement for paper and coin currencies because [a] money costs a lot to produce, manage, and make counterfeit resistant and [b] values could be whipped up using the juices that bad actors, money launderers, and financial “innovators” have pumping through their veins.
Today digital currencies have become a big financial play. It works… for a while. Then like the tragedy of the commons, the open green field is trashed. I thought about the current big time mess a whiz kid has created. The scale of the fraud makes those early players look less like minnows and more like clueless paramecia with math skills. “Sam Bankman-Fried and the Geometry of Conscience” is an interesting essay. However, it is difficult for a simple and somewhat dull person like myself to understand.
The write up says (and I urge you to read the complete 1,400 word essay. I want to cite one passage, if I may:
On reflection, maybe I’d just try to convince SBF to weight money logarithmically when calculating expected utility (as in the Kelly criterion), to forsake the linear weighting that SBF explicitly advocated and that he seems to have put into practice in his crypto ventures. Or if not logarithmic weighing, then at least some concave utility function—something that makes, let’s say, a mere $1 billion in hand seem better than $15 billion that has a 50% probability of vanishing and leaving you, your customers, your employees, and the entire Effective Altruism community with less than nothing.
Interesting, right.
Here’s my take. The SBF innovator attended MIT. In theory, he was exposed to MIT thinking, which as you may recall, involved taking money from everyone’s favorite poster child for questionable behavior Jeffrey Epstein. Several questions:
- What’s up with an MIT education and inculcation of such quaint concepts as moral behavior?
- Why are individuals willing and able to commit financial fraud when it is comparatively easy to deanonymize some crypto activities?
- Do we need big thoughts like “linear and concave utilities” to explain criminal behavior?
My take. Effective altruism is word salad. Say crypto to me I think of cyber crime. End of story. No Hopf fibration or wordsmithing needed, thank you very much.
Stephen E Arnold, November 14, 2022
Medium and Software Fancy Dancing
October 19, 2022
I noted this link in my Medium email to this Medium published story: “CCleaner Pro 6.03.10002 Crack Plus Serial Key Latest Version.” The write up is allegedly by an entity with the handle Mubashirrana. What’s seems to be troubling is that the information in the write up provides a link to what appears to be a dicey Web site called Get Crack PC’s . No, I will not provide the link. You can get this information from the Medium story if the company has not taken it down. If you do visit the Get Crack PC Web site keep in mind that there may be a risk of risk malware or just breaking a law related to software theft. The write up says:
CCleaner Pro Key 6.03.10002 With Crack [All Editions Keys]
CCleaner Pro 6.03.10002 Crack For Windows computers is helpful software. That eliminates all the clutter over time, including broken shortcuts, temporary files, and other issues. It is the ideal cleaning pro crack for your PC, making your system operate quickly and smoothly. Additionally, it safeguards your privacy and secures your system. Your surfing history and temporary internet files are both cleaned. This program may boost your Internet security and make you less vulnerable to identity theft.
Several observations:
- Medium is outputting lists of suggested stories to people like me and you. One would assume that those suggested links would not publicize a Web site which appears to facilitate software theft
- Medium pesters me with requests to pay them money. Why would I want to pay money to read stories about software theft? Is Medium aware of my lectures to law enforcement and intelligence professionals and trying to help me out with case examples?
- The idea of allowing anyone to create content with the hope of making money is one thing. A failure to use common sense about what to publish is, in my book, another.
Net net: Silicon Valley think demonstrates what I would call a common-sense gap. Will anyone at Medium “care”? Maybe not. Will a Medium professional speak with Mubashirrana about acceptable content? I don’t know. The new digital publisher whiz kids may want to study how the dinobabies handled content selection. Just a thought.
Stephen E Arnold, October 19, 2022
Cyber Security: The Stew Is Stirred
October 12, 2022
Cyber security, in my opinion, is often an oxymoron. Cyber issues go up; cyber vendors’ marketing clicks up a notch. The companies with cyber security issues keeps pace. Who wins this cat-and-mouse ménage a trois? The answer is the back actors and the stakeholders in the cyber security vendors with the best marketing.
Now the game is changing from cyber roulette, which has been mostly unwinnable to digital poker.
Here’s how the new game works if the information in “With Security Revenue Surging, CrowdStrike Wants to Be a Broader Enterprise IT Player” is on the money. I have to keep reminding myself that if there is cheating in competitive fishing, chess, and poker, there might be some Fancy Dancing at the cyber security hoe down.
The write up points out that CrowdStrike, a cyber security vendor, wants to pull a “meta” play; that is, the company’s management team wants to pop up a level. The idea is that cyber security is a platform. The “platform” concept means that other products and services should and will plug into the core system. Think of an oil rig which supports the drill, the pumps, spare parts, and the mess hall. Everyone has to use the mess hall and other essential facilities.
The article says:
Already one of the biggest names in cybersecurity for the past decade, CrowdStrike now aspires to become a more important player in areas within the wider IT landscape such as data observability and IT operations…
Google and Microsoft are outfits which may have to respond to the CrowdStrike “pop up a level” tactic. Google’s full page ads in the dead tree version of the Wall Street Journal and Microsoft’s on-going security laugh parade may not be enough to prevent CrowdStrike from:
- Contacting big companies victimized by lousy security provided by some competitors (Hello, Microsoft client. Did you know….)
- Getting a group of executives hurt in the bonus department by soaring cyber security costs
- Closing deals which automatically cut into both the big competitors’ and the small providers’ deals with these important clients.
The write up cites a mid tier consulting firm as a source of high value “proof” of the CrowdStrike concept. The write up offers this:
IDC figures have shown CrowdStrike in the lead on endpoint security market share, with 12.6% of the market in 2021, compared to 11.2% for Microsoft. CrowdStrike’s growth of 68% in the market last year, however, was surpassed by Microsoft’s growth of nearly 82%, according to the IDC figures.
CrowdStrike’s approach is to pitch a “single agent architecture.” Is this accurate? Sure, it’s marketing, and marketing matters.
Our research suggests that cyber security remains a “reaction” game. Something happens or a new gaffe is exploited, and the cyber security vendors react. The bad actors then move on. The result is that billions in revenue are generated for cyber security vendors who sell solutions after something has been breached.
Is there an end to this weird escalation? Possibly but that would require better engineering from the git go, government regulations for vendors whose solutions are not secure, and stronger enforcement action at the point of distribution. (Yes, ISPs and network providers, I am talking about you.)
Net net: Cyber security will become a market sector to watch. Some darned creative marketing will be on display. Meanwhile as the English majors write copy, the bad actors will be exploiting old and new loopholes.
Stephen E Arnold, October 12, 2022
LinkedIn: What Is the Flavor Profile of Poisoned Data?
October 6, 2022
I gave a lecture to some law enforcement professionals focused on cyber crime. In that talk, I referenced three OSINT blind spots; specifically:
- Machine generated weaponized information
- Numeric strings which cause actions within a content processing system
- Poisoned data.
This free and public blog is not the place for the examples I presented in my lecture. I can, however, point to the article “Glut of Fake LinkedIn Profiles Pits HR Against the Bots.”
The write up states:
A recent proliferation of phony executive profiles on LinkedIn is creating something of an identity crisis for the business networking site, and for companies that rely on it to hire and screen prospective employees. The fabricated LinkedIn identities — which pair AI-generated profile photos with text lifted from legitimate accounts — are creating major headaches for corporate HR departments and for those managing invite-only LinkedIn groups.
LinkedIn is a Microsoft property, and it — like other Microsoft “solutions” — finds itself unable to cope with certain problems. In this case, I am less interested in “human resources”, chief people officers, or talent manager issues than the issue of poisoning a data set.
LinkedIn is supposed to provide professionals with a service to provide biographies, links to articles, and a semi-blog function with a dash of TikTok. For some, whom I shall not name, it has become a way to preen, promote, and pitch.
But are those outputting the allegedly “real” information operating like good little sixth grade students in a 1950s private school?
Nope.
The article suggests three things to me:
- Obviously Microsoft LinkedIn is unable to cope with this data poisoning
- Humanoid professionals (and probably the smart software scraping LinkedIn for “intelligence”) have no way to discern what’s square and what’s oval
- The notion that this is a new problem is interesting because many individuals are pretty tough to track down. Perhaps these folks don’t exist and never did?
Does this matter? Sure, Microsoft / LinkedIn has to do some actual verification work. Wow. Imagine that. Recruiters / solicitors will have to do more than send a LinkedIn message and set up a Zoom call. (Yeah, Teams is a possibility for some I suppose.) What about analysts who use LinkedIn as a source information?
Interesting question.
Stephen E Arnold, October 6, 2022
-
- Subscribe to Beyond Search
Feature archive
News archive
-
