Digital Currencies: Now You Have It, Now You Do Not

February 2, 2018

We noted an interesting assertion in “Cryptocurrency ICOs: It’s Impossible to Police What You Can’t See.” The passage points attention to the ease with which initial coin offerings and tokens can be converted into “scams.” We noted:

ICOs have paved the way for so-called “exit scams,” in which fake companies launch an ICO and make off with investor proceeds. BitConnect is one of the latest companies which wound up its exchange operations, crashing the price of its BitConnect Coin (BCC) in the process. Investors were promised converted funds in BCC, but as their original investment had to be made in ETH, they have suffered countless losses as BCC’s value crashed and burned, leading many to believe the whole system was a scam — and one, unfortunately, which has cost its investors millions of dollars.

We loved this quote, attributed to Arianne King, managing partner and Solicitor Advocate of Al Bawardi Critchlow:

“It’s hard to police what you can’t even see.”

The Beyond Search DarkCyber research team would like to point out that modest strides have been made in deanonymizing some activities related to digital currencies.

The write up pointed out:

Investor cryptocurrency funds can be whisked away to multiple wallets and potentially “washed” through Dark Web services to become extremely difficult to track, and without cold, hard currency in a scammer’s bank account, little can be done.

Online is an interesting “environment,” fostering fake news, teen anxiety, and good old fashioned fraud.

Stephen E Arnold, February 2, 2018

AlphaBay Takedown Just One Chapter in Dark Web Saga

January 9, 2018

Did the takedown of AlphaBay last summer have much effect, or will black markets on the dark web carry on with business as usual? Both, according to Wired’s article, “The Biggest Dark Web Takedown Yet Sends Black Markets Reeling.” Writer Andy Greenberg details the immediate aftermath as customers of AlphaBay, the largest dark web marketplace in existence, frantically searched for other sources—apparently causing technical difficulties for two of the leading alternatives. He also notes the (reasonable) secrecy around just how the FBI pulled this off, causing other dark web vendors to wonder whether they will be next.

On the other hand, a robust demand for black market goods has been a fact of life for millennia, and that does not stop with AlphaBay’s defeat. Greenberg writes:

Even so, the chaos in the wake of AlphaBay’s disappearance shouldn’t deal a death blow to the dark web’s vibrant drug trade, or even cause much more than a temporary shakeup, says Carnegie Mellon’s Christin. He points to prior dark web crises like the 2013 takedown of the Silk Road, the bust of the Silk Road’s sequel site in late 2014, or the so-called ‘exit scam’ pulled by the dark web market Evolution in 2015, in which its administrators abruptly absconded with their patrons’ bitcoins. Each time, Christin points out, the dark web’s overall business took a temporary dive, but came roaring back more quickly after those setbacks and continued to grow as a whole. AlphaBay, for example, had more than 20 times as many product listings as the original Silk Road. (Some research has found that even bad news about the dark web markets only attracts more users to them.) And AlphaBay’s buyers and customers will eventually find a new home.

And so the adventure continues. What is next in the fight between law enforcement and dark web marketplaces? Stay tuned.

Cynthia Murrell, January 9, 2018

Dark Web Criminals Seek Alternatives to Bitcoin

January 8, 2018

Law enforcement has been getting better at using Bitcoin to track criminals on the dark web, so bad actors are exploring alternatives, we learn from the article, “Dark Web Finds Bitcoin Increasingly More of a Problem Than a Help, Tires Other Digital Currencies” at CNBC.

Reporter Evelyn Cheng writes:

In the last three years, new digital currencies such as monero have emerged in an effort to increase privacy. Unlike the open transaction record of bitcoin, monero’s technology hides the name of the sender, amount and receiver. A representative from monero did not respond to email and Twitter requests for comment. Monero hit a record high Monday of $154.58, up more than 1,000 percent this year, according to CoinMarketCap.

Digital currency ethereum is an increasing target for cybercrime as well, according to Chainalysis. Ethereum is up about 4,300 percent this year amid a flood of funds into the digital currency for initial coin offerings, which have raised the equivalent of nearly $1.8 billion in the last three years, CoinDesk data showed. Cybercriminals raised $225 million in ethereum so far this year, Chainalysis said in a report posted Aug. 7 on its website. Phishing attacks — disguised emails or other communication used to trick people into disclosing personal information — make up more than half of all ethereum cybercrime revenue this year at $115 million, the study said. The Ethereum Foundation did not return a CNBC request for comment.

Make no mistake, Bitcoin is still in the lead even with criminals—its popularity makes it easy to quickly convert with no third parties involved. As that popularity continues to increase and the currency becomes more mainstream, though, other options await.

Cynthia Murrell, January 8, 2018

Law Enforcement Do Not Like Smartphones

December 26, 2017

Smartphones and privacy concerns are always hot topics after mass shootings and terroristic acts.  The killers and terrorists always use their smartphones to communicate with allies, buy supplies, and even publicize their actions.  Thanks to these criminals, law enforcement officials want tech companies to build backdoors into phones so they can always can the information.  The remainder of the public does not like this.  One apple spoils the entire batch.  KPTV explains why smartphones are a problem in “Why Smartphones Are Giving Police Fits.”

After the recent mass shooting in Texas, police were unable to hack into the killer’s phone because of all the privacy software in place.  Law enforcement do not like this because they are unable to retrieve data from suspects’ phones.  Software developers insist that the encryption software is necessary for digital privacy, but police do not like that.  It holds up their investigations.

…it could take specialists weeks to unlock the phone and access material that may reveal the killer’s motive and other information.

 

The FBI’s first option is likely to pressure the device-maker to help access the phone, but if that won’t work they could try breaking into it. Sometimes “brute force” attacks aimed at methodically guessing a user’s passcode can open a device, though that won’t work with all phones.

Arora said the difficulty of breaking into the phone would depend on numerous factors, including the strength of the gunman’s passcode and the make and model of the phone. Police may have more options if it’s an Android phone, since security practices can vary across different manufacturers.

The tech companies, though, are out to protect the average person, especially after the Edward Snowden incident.  The worry is that if all smartphones have a backdoor, then it will be used for more harm than good.  It establishes a dangerous precedent.

Law enforcement, however, needs to do their jobs.  This is similar to how the Internet is viewed.  It is a revolutionary tool, but a few bad apples using it for sex trafficking, selling illegal goods, and child porn ruins it for the rest of us.

Whitney Grace, December 26, 2017

China Has an AI Police Station and That Is Not a Good Thing

December 12, 2017

The wave of things artificial intelligence can do is amazing. In China, they are even handling law enforcement with intelligent machines. While this might be a boon for efficiency, people like Stephen Hawking are not happy. We learned more from the Sanvada article, “Check Out The Artificial Intelligence-Powered Police Station in China.”

According to the story:

Recently China announced the opening of an AI-powered police station in Wuhan illustrating its plans to fully incorporate artificial intelligence as a functional part of its systems.

But the most interesting turn comes later, stating:

Artificial intelligence may not yet be up to the task. After all, not every case in the designated area will relate to car or driving related issues. Artificial intelligence has yet to be proven to have the capability of solving complex disputes. It may not use of all of the facts or comprehend the intricate dynamics of human relationships or the damage which can be caused to people whether it is in the case of molestation or rape and hence, may not have the sensitivity to deal with such scenarios.

We love the multitude of uses for AI but have to agree with the skepticism of Sanvada. One of the smartest people on the planet also agrees. Stephen Hawking recently commented that “AI could be the worst event in human history.” Let’s hope he’s not right and let’s hope wise guidance proves that AI police stations stay a novelty in the world of AI.

Patrick Roland, December 12, 2017

DARPA Progresses on Refining Data Analysis

June 12, 2017

The ideal data analysis platform for global intelligence would take all the data in the world and rapidly make connections, alerting law enforcement or the military about potential events before they happen. It would also make it downright impossible for bad actors to hide their tracks. Our government seems to be moving toward that goal with AIDA, or Active Interpretation of Disparate Alternatives. DARPA discusses the project in its post, “DARPA Wades into Murky Multimedia Information Streams to Catch Big Meaning.” The agency states:

The goal of AIDA is to develop a multi-hypothesis ‘semantic engine’ that generates explicit alternative interpretations or meaning of real-world events, situations, and trends based on data obtained from an expansive range of outlets. The program aims to create technology capable of aggregating and mapping pieces of information automatically derived from multiple media sources into a common representation or storyline, and then generating and exploring multiple hypotheses about the true nature and implications of events, situations, and trends of interest.

‘It is a challenge for those who strive to achieve and maintain an understanding of world affairs that information from each medium is often analyzed independently, without the context provided by information from other media,’ said Boyan Onyshkevych, program manager in DARPA’s Information Innovation Office (I2O). ‘Often, each independent analysis results in only one interpretation, with alternate interpretations eliminated due to lack of evidence even in the absence of evidence that would contradict those alternatives. When these independent, impoverished analyses are combined, generally late in the analysis process, the result can be a single apparent consensus view that does not reflect a true consensus.’

AIDA’s goal of presenting an accurate picture of overall context early on will help avoid that problem. The platform is to assign a confidence level to each piece of information it processes and each hypothesis it generates. It will also, they hope, be able to correct for a journalistic spin by examining variables and probabilities. Is the intelligence community is about to gain an analysis platform capable of chilling accuracy?

Cynthia Murrell, June 12, 2017

Palantir Technologies: A Beatdown Buzz Ringing in My Ears

April 27, 2017

I have zero contacts at Palantir Technologies. The one time I valiantly contacted the company about a speaking opportunity at one of my wonky DC invitation-only conferences, a lawyer from Palantir referred my inquiry to a millennial who had a one word vocabulary, “No.”

There you go.

I have written about Palantir Technologies because I used to be an adviser to the pre-IBM incarnation of i2 and its widely used investigation tool, Analyst’s Notebook. I did write about a misadventure between i2 Group and Palantir Technologies, but no one paid much attention to my commentary.

An outfit called Buzzfeed, however, does pay attention to Palantir Technologies. My hunch is that the online real news outfit believes there is a story in the low profile, Peter Thiel-supported company. The technology Palantir has crafted is not that different from the Analyst’s Notebook, Centrifuge Systems’ solution, and quite a few other companies which provide industrial-strength software and systems to law enforcement, security firms, and the intelligence community. (I list about 15 of these companies in my forthcoming “Dark Web Notebook.” No, I won’t provide that list in this free blog. I may be retired, but I am not giving away high value information.)

So what’s caught my attention. I read the article “Palantir’s Relationship with the Intelligence Community Has Been Worse Than You Think.” The main idea is that the procurement of Palantir’s Gotham and supporting services provided by outfits specializing in Palantir systems has not been sliding on President Reagan’s type of Teflon. The story has been picked up and recycled by several “real” news outfits; for example, Brainsock. The story meshes like matryoshkas with other write ups; for example, “Inside Palantir, Silicon Valley’s Most Secretive Company” and “Palantir Struggles to Retain Clients and Staff, BuzzFeed Reports.” Palantir, it seems to me in Harrod’s Creek, is a newsy magnet.

The write up about Palantir’s lousy relationship with the intelligence community pivots on a two year old video. I learned that the Big Dog at Palantir, Alex Karp, said in a non public meeting which some clever Hobbit type videoed on a smartphone words presented this way by the real news outfit:

The private remarks, made during a staff meeting, are at odds with a carefully crafted public image that has helped Palantir secure a $20 billion valuation and win business from a long list of corporations, nonprofits, and governments around the world. “As many of you know, the SSDA’s recalcitrant,” Karp, using a Palantir codename for the CIA, said in the August 2015 meeting. “And we’ve walked away, or they walked away from us, at the NSA. Either way, I’m happy about that.” The CIA, he said, “may not like us. Well, when the whole world is using Palantir they can still not like us. They’ll have no choice.” Suggesting that the Federal Bureau of Investigation had also had friction with Palantir, he continued, “That’s de facto how we got the FBI, and every other recalcitrant place.”

Okay, I don’t know the context of the remarks. It does strike me that 2015 was more than a year ago. In the zippy doo world of Sillycon Valley, quite a bit can change in one year.

I don’t know if you recall Paul Doscher who was the CEO of Exalead USA and Lucid Imagination (before the company asserted that its technology actually “works). Mr. Doscher is a good speaker, but he delivered a talk in 2009, captured on video, during which he was interviewed by a fellow in a blue sport coat and shirt. Mr. Doscher wore a baseball cap in gangsta style, a crinkled unbuttoned shirt, and evidenced a hipster approach to discussing travel. Now if you know Mr. Doscher, he is not a manager influenced by gangsta style. My hunch is that he responded to an occasion, and he elected to approach travel with a bit of insouciance.

Could Mr. Karp, the focal point of the lousy relationship article, have been responding to an occasion? Could Mr. Karp have adopted a particular tone and style to express frustration with US government procurement? Keep in mind that a year later, Palantir sued the US Army. My hunch is that views expressed in front of a group of employees may not be news of the moment. Interesting? Sure.

What I find interesting is that the coverage of Palantir Technologies does not dig into the parts of the company which I find most significant. To illustrate: Palantir has a system and method for an authorized user to add new content to the Gotham system. The approach makes it possible to generate an audit trail to make it easy (maybe trivial) to answer these questions:

  1. What data were added?
  2. When were the data added?
  3. What person added the data?
  4. What index terms were added to the data?
  5. What entities were added to the metadata?
  6. What special terms or geographic locations were added to the data?

You get the idea. Palantir’s Gotham brings to intelligence analysis the type of audit trail I found some compelling in the Clearwell system and other legal oriented systems. Instead of a person in information technology saying in response to a question like “Where did this information come from?”, “Duh. I don’t know.”

Gotham gets me an answer.

For me, explaining the reasoning behind Palantir’s approach warrants a write up. I think quite a few people struggling with problems of data quality and what is called by the horrid term “governance” would find Palantir’s approach of some interest.

Now do I care about Palantir? Nah.

Do I care about bashing Palantir? Nah.

What I do care about is tabloidism taking precedence over substantive technical approaches. From my hollow in rural Kentucky, I see folks looking for “sort of” information.

How about more substantive information? I am fed up with podcasts which recycle old information with fake good cheer. I am weary of leaks. I want to know about Palantir’s approach to search and content processing and have its systems and methods compared to what its direct competitors purport to do.

Yeah, I know this is difficult to do. But nothing worthwhile comes easy, right?

I can hear the millennials shouting, “Wrong, you dinosaur.” Hey, no problem. I own a house. I don’t need tabloidism. I have picked out a rest home, and I own 60 cemetery plots.

Do your thing, dudes and dudettes of “real” journalism.

Stephen E Arnold, April 27, 2017

Dark Web Drug Dealers Busted in Finland

March 1, 2017

Law enforcement’s focus on the Dark Web seems to be paying off, as we learn from the write-up, “Finland: Dark Web Drug Operation Exposed” at Hetq, an outlet of the Association of Investigative Journalists. In what was described as Finland’s largest drug bust, authorities seized over a million dollars’ worth of narcotics from a network selling their wares on the Dark Web. We learn:

The network is alleged to have imported €2 million (US$ 2.2 million) worth of drugs between 2014 and 2016, selling them on the dark web site Silkkitie. More than 40 kilograms of powdered narcotics, such as amphetamine, heroin and cocaine, as well as 40,000 ecstasy tablets and 30,000 LSD blotters were smuggled into Finland from the Netherlands and Germany, and then sold on the site. …

As part of the investigation, customs officers in April seized at least €1.1 million worth of heroin, cocaine, methamphetamine, MDMA and ecstasy in the coastal town of Kustavi. The same month, police arrested three Finnish citizens.

The write-up notes that Silkkitie users communicated through encrypted messages under pseudonyms, and that Bitcoin was the currency used. We’re also reminded that Silkkitie, a.k.a. Valhalla, is one of the Dark Web’s most popular drug marketplaces. The Finnish site was launched in 2013.

Cynthia Murrell, March 1, 2017

Online Gun Sales Strengthens the Technology and Law Enforcement Connection

February 14, 2017

A feature article on CNN recently provided some background on Dark Web marketplaces. Entitled Inside the illegal online weapons trade, this piece shares the story of Michael Andrew Ryan. Ryan adopted the moniker gunrunner and opened up a gun sales business on the Dark Web while based in a small town in Kansas. Dark Web trading statistics are tough to pinpoint. However, in comparison with other illegal online trading, gun sales on the Dark Web are less than 3% according to a Carnegie Mellon professor and researcher. The author writes,

By the way, it’s entirely legal to buy guns online in the U.S. — although the process is more complicated, depending on various factors. Nonetheless, the ATF said it’s taking enforcement to a new level by creating an Internet Investigations Center aimed at combating illegal online gunrunners. The center includes federal agents, legal counsel and investigators. Their job: track illegal online firearms trafficking and feed intelligence to agents in the field. It’s a gigantic task, which aims to hit a constantly moving target.

While we will not comment on the sensationalizing and dramatizing of the Dark Web through Ryan’s story, we can say found the concluding remarks above to be helpful. This presents a good picture of the interconnectivity between multiple layers of law enforcement. It also hints at a need for technology upgrades in this cybersecurity arena.

Megan Feil, February 14, 2017

Another Untraceable Dark Web Actor Put Behind Bars

January 19, 2017

A prison librarian in England who purchased drugs and weapons over the Dark Web for supplying them to prisoners was sentenced to 7-years in prison.

The Register in a news report Prison Librarian Swaps Books for Bars After Dark-Web Gun Buy Caper says:

Dwain Osborne, of Avenue Road, Penge, in London, was nabbed in October of 2015 after he sought to procure a Glock 19 – a staple of police and security forces worldwide – and 100 rounds of ammunition on the dark web. A search of Osborne’s house revealed the existence of a storage device, two stolen passports, and a police uniform.

Osborne was under the impression that like other Dark Web actors, he too is untraceable. What made the sleuths suspicious is not known, however, the swift action and prosecution are commendable. Law enforcement agencies are challenged by this new facet of crime wherein most perpetrators manage to remain anonymous.

Most arrests related to the purchase of arms and drugs over Dark Web were result of undercover operations. However, going beyond this type of modus operandi is the need of the hour.

Systems like Apacke Teka seem to be promising, but it is premature to say how such kind of systems will evolve and most importantly, will be implemented.

Vishal Ingole, January 19, 2017

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