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Bitcoin

Secret Service Agent Pleads Guilty In Bitcoin Theft 71

An anonymous reader writes: A former Secret Service agent has pleaded guilty to charges related to the theft of $800,000 worth of bitcoins during a high-profile investigation into the online drug marketplace Silk Road. Reuters reports: "Shaun Bridges, 33, appeared in federal court in San Francisco and admitted to money laundering and obstruction of justice....In court on Monday, Bridges admitted his theft made Ulbricht believe that another individual was stealing from Silk Road and helped lead Ulbricht to try to hire someone to kill that person."
Security

Six UK Teens Arrested For Being "Customers" of Lizard Squad's DDoS Service 71

An anonymous reader writes: UK officials have arrested six teenagers suspected of utilizing Lizard Squad's website attack tool called "Lizzard Stresser". Lizard Squad claimed responsibility for the infamous Christmas Day Xbox Live and PlayStation Network attacks. The teenagers "are suspected of maliciously deploying Lizard Stresser, having bought the tool using alternative payment services such as Bitcoin in a bid to remain anonymous," an NCA spokesperson wrote in an official statement on the case. "Organizations believed to have been targeted by the suspects include a leading national newspaper, a school, gaming companies, and a number of online retailers."
Bitcoin

Beyond Bitcoin: How Business Can Capitalize On Blockchains 57

snydeq writes: Bitcoin's widely trusted ledger offers intriguing possibilities for business use beyond cryptocurrency, writes InfoWorld's Peter Wayner. "From the beginning, bitcoin has assumed a shadowy, almost outlaw mystique," Wayner writes. "Even the mathematics of the technology are inscrutable enough to believe the worst. The irony is that the mathematical foundations of bitcoin create a solid record of legitimate ownership that may be more ironclad against fraud than many of the systems employed by businesses today. Plus, the open, collaborative way in which bitcoin processes transactions ensures the kind of network of trust that is essential to any business agreement."
Canada

Extortionists Begin Targeting AshleyMadison Users, Demand Bitcoin 286

tsu doh nimh writes: It was bound to happen: Brian Krebs reports that extortionists have begun emailing people whose information is included in the leaked Ashleymadison.com user database, threatening to find and contact the target's spouse and alert them if the recipient fails to cough up 1 Bitcoin. Krebs interviews one guy who got such a demand, a user who admits to having had an affair after meeting a woman on the site and who is now worried about the fallout, which he said could endanger his happily married life with his wife and kids. Perhaps inevitable: two Canadian law firms have filed a class action lawsuit against the company, seeking more than half a billion dollars in damages.
Bitcoin

Bitcoin Fork Divides Community 185

HughPickens.com writes: The Bitcoin community is facing one of the most momentous decisions in its six-year history. The Bitcoin network is running out of spare capacity, and two increasingly divided camps disagree about what, if anything, to do about the problem. The technical issue is that a block, containing a record of recent transactions, currently has a 1MB limit. Increasing the block size would allow more transactions on the network at once, helping it to scale up to meet growing demand. But it would also make it more difficult for ordinary users to host full network "nodes" that validate new transactions on the network, potentially making the digital currency more centralized as a result. Now Rob Price writes that two high-profile developers have released a competing version of the codebase that risks splitting the digital currency in two.

Gavin Andresen and Mike Hearn have released Bitcoin XT, an alternative version of the core software that supports increasing the block size when required. Bitcoin users will now be forced to decide between "Bitcoin Core" and Bitcoin XT, raising the prospect of a "fork," where the digital currency divides into two competing versions. According to Price, Core and XT are compatible right now. However, if XT is adopted by 75% of users by January 2016, it will upgrade to a larger block size that will be incompatible with Core — meaning that if the other 25% don't then choose to convert, it will effectively split the currency into two. So far, 7.7% of the network has adopted XT, according to website XTnodes.com. "Ultimately, how the dispute is resolved may matter more than the specific decision that's reached," says Timothy B. Lee. "If the community is ultimately able to reach a consensus, the process could become a template for resolving future disagreements. On the other hand, if disagreements fester for months — or, worse, if a controversial software change splits the Bitcoin network into two warring camps — it could do real damage to Bitcoin's reputation."
The Internet

Cuba Uses Big Data To Help Tourism, But Their Networks Lack Capacity 60

dkatana writes: The Cuban government is very active in reshaping the country's industry, not only focusing on leisure and cultural tourism. The biggest challenge, however, is the quality of Internet connections. Cuba's global ranking for Internet speed is 196 out of 200, averaging 1.6 Mbps, just ahead of Guinea, Gambia, Equatorial Guinea, and Niger. Another thing that Cuba lacks: free movement of currency, as reader lpress points out: Cuba has two paper currencies — the Peso and the Convertible Peso or CUC. CUCs are worth about $1 and Pesos, which are used for government salaries, are worth about $.04. But, what about Bitcoin? The first Cuban Bitcoin transaction is history. Will Bitcoin be used by Cubans and Americans to sell goods and services without the knowledge of their governments? Cuban offshore developers might be the first to use Bitcoin.
Security

Spyware Demo Shows How Spooks Hack Mobile Phones 35

An anonymous reader writes: Joe Greenwood, of cybersecurity firm 4Armed, recently gave a live demonstration of some of Hacking Team's leaked spyware to the BBC. Tracking Bitcoin payments, recording audio from the microphone of a locked device, and secretly gaining control of an infected phone's camera are just a few of the software's capabilities. The BBC reports: "Both Mr Greenwood and 4Armed's technical director, Marc Wickenden, said they were surprised by the sleekness of the interface. Both point out, though, that customers could be paying upwards of £1m for the software and would expect it to be user-friendly, especially if it was intended for use by law enforcers on the beat. For the tracked user, though, there are very few ways of finding out that they are being watched. One red flag, according to Mr Greenwood, is a sudden spike in network data usage, indicating that information is being sent somewhere in the background. Experienced spies, however, would be careful to minimize this in order to remain incognito."
Bitcoin

Japanese Police Arrest Mount Gox CEO Mark Karpeles 104

McGruber writes with the news as carried (paywalled) by the Wall Street Journal that Mark Karpeles, who headed bitcoin exchange Mt. Gox, has been arrested by Japanese police: In February 2014, Mount Gox filed for bankruptcy, saying it had lost 750,000 of its customers' bitcoins as well as 100,000 of its own, worth some $500 million at the time. A police spokesman said Mr. Karpelès is suspected of manipulating his own account at the company by making it appear that $1 million was added to it. The BBC reports the arrest as well, and notes that the coins missing from Mt. Gox represent 7% of all Bitcoins in circulation.
Security

Your Stolen Identity Goes For $20 On the Internet Black Market 57

HughPickens.com writes: Keith Collins writes at Quartz that the going rate for a stolen identity is about twenty bucks on the internet black market. Collins analyzed hundreds of listings for a full set of someone's personal information—identification number, address, birthdate, etc., known as "fullz" that were put up for sale over the past year, using data collected by Grams, a search engine for the dark web. The listings ranged in price from less than $1 to about $450, converted from bitcoin. The median price for someone's identity was $21.35. The most expensive fullz came from a vendor called "OsamaBinFraudin," and listed a premium identity with a high credit score for $454.05. Listings on the lower end were typically less glamorous and included only the basics, like the victim's name, address, social security number, perhaps a mother's maiden name. Marketplaces on the dark web, not unlike eBay, have feedback systems for vendors ("cheap and good A+"), refund policies (usually stating that refunds are not allowed), and even well-labeled sections. "There is no shortage of hackers willing to do about anything, computer related, for money," writes Elizabeth Clarke. "and they are continually finding ways to monetize personal and business data."
Bitcoin

Winklevoss Twins Get Closer To Launching Their Bitcoin Exchange 93

An anonymous reader writes: Reuters has an update on the Winklevoss twins plan to launch a regulated Bitcoin exchange called Gemini. The two have filed a New York trust application necessary for them to launch their Gemini bitcoin exchange. If approved, the exchange would be able to accept deposits, and issue loans. The twins say they want to make digital currency mainstream in the United States.
EU

Bitcoin Exempt From VAT Says European Court of Justice 72

An anonymous reader writes: The European Court of Justice (ECJ) proposes that Bitcoin should be exempt from Value Added Tax (VAT). This news has been positively received by the Bitcoin community in the EU, as member states are not likely going to apply VAT to purchases and sales of Bitcoin. A clear cut argument brought up by Advocate General Juliane Kokott, was that VAT is commonly applied to goods and services which have an end consumer. Bitcoin is neither a good, nor a service and has no end consumer, as Bitcoins are eternally transferable just like normal currency. Bitcoin exchanges such as Coinbase, Kraken, Bitstamp, and Bitfinex will all benefit from this ruling, which may lead to other countries across the globe to follow a similar approach.
Bitcoin

Bitcoin Snafu Causes Miners To Generate Invalid Blocks 179

An anonymous reader writes: A notice at bitcoin.org warns users of the cryptocurrency that many miners are currently generating invalid blocks. The cause seems to be out-of-date software, and software that assumed blocks were valid instead of checking them. They explain further "For several months, an increasing amount of mining hash rate has been signaling its intent to begin enforcing BIP66 strict DER signatures. As part of the BIP66 rules, once 950 of the last 1,000 blocks were version 3 (v3) blocks, all upgraded miners would reject version 2 (v2) blocks. Early morning UTC on 4 July 2015, the 950/1000 (95%) threshold was reached. Shortly thereafter, a small miner (part of the non-upgraded 5%) mined an invalid block--as was an expected occurrence. Unfortunately, it turned out that roughly half the network hash rate was mining without fully validating blocks (called SPV mining), and built new blocks on top of that invalid block. Note that the roughly 50% of the network that was SPV mining had explicitly indicated that they would enforce the BIP66 rules. By not doing so, several large miners have lost over $50,000 dollars worth of mining income so far."
Encryption

MIT's Bitcoin-Inspired 'Enigma' Lets Computers Mine Encrypted Data 46

Guy Zyskind, Oz Nathan, and the MIT Media Lab have developed a system to encrypt data in a way that it can still be shared and used without being decrypted. "To keep track of who owns what data—and where any given data’s pieces have been distributed—Enigma stores that metadata in the bitcoin blockchain, the unforgeable record of messages copied to thousands of computers to prevent counterfeit and fraud in the bitcoin economy." Enigma needs a fairly large base of users to operate securely, so its creators have proposed requiring a fee for anyone who wants data processed in this way. That fee would then be split among the users doing the processing. Those with encrypted datasets on the Enigma network could also sell access to datamining operations without letting the miners see the unencrypted data.
Bitcoin

Greek Financial Crisis Is an Opportunity For Bitcoin 359

An anonymous reader writes: Greece's economy has been in trouble for several years, now, and a major vote next weekend will shake it up even further. The country can't pay its debts, and the upcoming referendum will decide whether they face increased austerity measures or start the process of exiting the Euro. One side effect of the crisis is that alternative currencies like Bitcoin suddenly look much more attractive as the "normal" currencies become unstable. "Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, tweeted on Sunday night that he expected the price of bitcoin to rise to between $610 and $1,250 if Greece exits the Euro. The currency is currently worth $250. Part of the reason why the crisis is so tempting for proponents of the cryptocurrency is the echoes of a previous crisis in the Eurozone: the banking collapse in Cyprus in 2013, which saw that nation also impose capital controls to prevent massive outflows of currency from the panicking country. That collapse came at the same time as the first major boom in the price of bitcoin, which began the year at less than $20 and peaked at ten times that by early April – before it all came crashing down."
Social Networks

US Teen Pleads Guilty To Teaching ISIS About Bitcoin Via Twitter 312

jfruh writes: Ali Shukri Amin, a 17-year-old from Virginia, has pleaded guilty to charges that he aided ISIS by giving the group advice about using bitcoin. An odd and potentially troubling aspect of the charges is that this all took place in public — he Tweeted out links to an article on his blog about how bitcoin and Darknet could help jihadi groups, making it difficult to say whether he was publishing information protected under free speech or was directly advising the terrorist organization. Free speech qua speech isn't the only relevant charge, though: Amin "also admitted facilitating the travel of another teenager, 18-year-old Reza Niknejad, to Syria to join IS. Amin faces a maximum penalty of 15 years in prison if convicted."
Communications

OpenBazaar, Born of an Effort To Build the Next Silk Road, Raises $1 Million 107

Patrick O'Neill writes: After the fall of Silk Road, Amir Taaki built DarkMarket in an effort to offer a decentralized and "untouchable" market alternative. That's grown into OpenBazaar, a "censorship-resistant" protocol that just raised $1 million from venture capital firms Union Square Ventures and Andreessen Horowitz, as well as angel investor William Mougayar through the company OB1, which will now do core development on the software.
Security

Ransomware Creator Apologizes For "Sleeper" Attack, Releases Decryption Keys 45

colinneagle writes: Last week, a new strain of ransomware called Locker was activated after having been sitting silently on infected PCs. Security firm KnowBe4 called Locker a "sleeper" campaign that, when the malware's creator "woke it up," encrypted the infected devices' files and charged roughly $24 in exchange for the decryption keys. This week, an internet user claiming to be the creator of Locker publicly apologized for the campaign and appears to have released the decryption keys for all the devices that fell victim to it, KnowBe4 reported in an alert issued today. Locker's creator released this message in a PasteBin post, along with a link to a file hosted on Mega.co containing the decryption keys. The malware creator also said that an automatic decryption process for all devices that were affected by Locker will begin June 2nd.

However, the post did not mention anything about providing a refund to victims who paid the 0.1 bitcoin (equal to $22.88 at the time this was posted and about $24 last week) required for the decryption keys since last week. KnowBe4 CEO Stu Sjouwerman says the files released do not appear to be malicious after brief analysis, and that "it does contain a large quantity of RSA keys and Bitcoin addresses." But he warned those interested to only open these files "at your own risk until further analyses are performed." Sjouwerman speculated that the malware creator may have been spooked by attention from law enforcement or Eastern European organized crime syndicates that are behind most ransomware campaigns.
Security

The Underground Hacking Economy 29

Fast Company profiles the rise of sites like Hackers List and Hackers For Hire, which provide consolidated markets for people to hire hackers to break passwords, alter databases, learn to operate malware, and more. People with the skills to circumvent security are putting themselves out there as freelancers for specific tasks, and people in need of their services are posting notices asking for help. Law enforcement agencies are warning about this new type of behavior, saying it's often illegal, and facilitated by online anonymity and cryptocurrencies like Bitcoin. The number of deals currently being made through these sites remains small, but it's growing — particularly among business seeking to gain an advantage over competitors in other countries.
Crime

Feds Bust a Dark-Web Counterfeit Coupon Kingpin 90

Sparrowvsrevolution writes: The dark web has become the go-to corner of the Internet to buy drugs, stolen financial data, guns...and counterfeit coupons for Clif bars and condoms? The FBI indicted Beauregard Wattigney yesterday for wire fraud and trademark counterfeiting on digital black market sites Silk Road and Silk Road 2. Wattigney allegedly spoofed coupons for dozens of products and sold collections of them online in exchange for Bitcoin. The FBI accused him of doing $1 million worth of collective damage to the companies he made coupons for, but a fraud consultancy believes the total financial cost of his actions was much higher. Wattigney also offered expensive lessons that taught people how to make their own coupons. "In his tutorials, [he] explained the simple breakdown of barcode creation using the increasingly universal GS1 standard: GS1 codes begin with a 'company prefix' that can be copied from any of the company's products. The next six digits are the 'offer code,' which can be any random number for a counterfeit coupon, followed by the savings amount listed in cents and the required number of item purchases necessary to receive the discount."