A Wild $4 Billion Crypto Tale | IRS Ditches Facial Scans | 49ers Ransomware Attack

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The faces of cybercriminals and their alleged accomplices are often hidden from public view. But earlier this month, the Justice Department announced the arrest of a married couple alleged to have perpetrated a huge cryptocurrency laundering operation. It led to the department declaring it was its biggest ever financial seizure, with crypto worth more than $4 billion today. Understandably, there was a flurry of interest in the accused pair.

With my colleagues David Jeans and Cyrus Farivar, we tried to learn more about the so-called Crypto Couple, Heather Morgan and Ilya Lichtenstein, who were alleged to have funnelled money stolen from a hack of the Bitfinex exchange six years ago across various accounts.

It wasn't long ago that Morgan, a rapping entrepreneur with a penchant for fashion design to boot under the moniker Razzlekhan, was a promising economics student. But at some point along the way, she pivoted to specializing in the art of cold calling, blogging for Forbes and Inc about becoming a successful businesswoman, making outlandish rap videos, and founding a handful of businesses along the way, like copywriting consulting company, SalesFolk.

Lichtenstein, meanwhile, proceeded through a series of failed ventures, including running a Ron Paul fan website and setting up a brain-boosting supplements business before co-founding MixRank, now a venture-backed sales and marketing company. He then left MixRank abruptly in 2016, the same year that Bitfinex was hacked. 

Their arrests in New York last week didn't pass without incident. When Morgan insisted she be able to retrieve her cat from her bedroom, she was seen doing something with her phone, investigators suspecting that she was
trying to lock the device to make it difficult for cops to search. In the raid on the couple's flat, police also said they found hollowed out books used to conceal items.

The pair's lawyer have claimed some of the government's allegations appear flawed, but they're yet to file a plea. It's early days in a case that could rumble on for years. We don't even know if the government is going to charge anyone over the actual hack of Bitfinex.

You can our stories about the Crypto Couple here and here.

If you have any tips on government surveillance, privacy or cybercrime, drop me an email on
tbrewster@forbes.com or message me on Signal at +447782376697.

Thomas Brewster

Thomas Brewster

Associate Editor, Cybersecurity

The Big Story

IRS To Drop Facial Scan ID.me Verification For Online Accounts
 
 
 
IRS To Drop Facial Scan ID.me Verification For Online Accounts

The IRS has cancelled plans to force people to use facial recognition to file returns online. The use of ID.me, a third-party service that that used facial scanning technology, as a requirement for taxpayers had caused outrage from privacy advocates.


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Talking of facial recognition, lawmakers including Sens. Edward Markey and Jeffrey Merkley, as well as House Reps. Pramila Jayapal and Ayanna Presley, called on the FBI, ICE and other federal departments to stop using technology from Peter Thiel-backed Clearview AI. In a letter, they claimed that facial recognition like Clearview's posed a threat to black communities.

Senators
Ron Wyden and Martin Heinrich accused the CIA of secretly conducting warrantless bulk surveillance of American citizens. It's not clear what records are being held across the relevant snooping programs at the CIA because it has kept the information classified. The Electronic Frontier Foundation said the spying was "reminiscent of the mass surveillance programs conducted by the NSA."Senators Ron Wyden and Martin Heinrich accused the CIA of secretly conducting warrantless bulk surveillance of American citizens.

Just before the Super Bowl got under way, the
San Francisco 49ers confirmed the team had been hit by a ransomware attack. It was "limited to our corporate IT network," according to a spokesperson.

Meanwhile, in
better ransomware news, keys to unlock systems infected by a variety of malware - Maze, Egregor, and Sekhmet - were released for hacked organizations to set themselves free.

The U.K. tax regulator announced the seizure of three Non-Fungible Tokens (NFT) as part of a probe into a suspected VAT fraud involving 250 alleged fake companies, as three people were arrested on suspicion of attempting to defraud the government of £1.4 million, the BBC reports. It's the first seizure of its kind in the U.K., according to the HM Revenue and Customs.

Winner Of The Week

Macros have long been useful tools for hackers. As small pieces of software embedded within a file like a Word or Excel file, they can be used to run tasks in the background once that file is opened. For a cybercriminal, if they can craft an evil macro inside a file, and trick the user into allowing macros to run once they've opened the document, the app can do all manner of nasty things, like downloading additional malware. But Microsoft announced last week that macros will be disabled by default in files downloaded from the internet, Wired reports. The news will please many security pros, who've long been waiting for this measure.

Loser Of The Week

The U.K. Foreign Office paid cybersecurity supplier BAE Applied Intelligence more than $600,000 to deal with a “serious incident.” The disclosure was made not in a press announcement, but via a public tender document, as TechCrunch reported.


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