Firefox turns controversial new encryption on by default in the US – The Verge

Starting today, Mozilla will turn on by default DNS over HTTPS (DoH) for Firefox users in the US, the company has announced. DoH is a new standard that encrypts a part of your internet traffic thats typically sent over an unencrypted plain text connection, and which could allow others to see what websites youre visiting, even when your communication with the website itself is encrypted using HTTPS. Mozilla says it is the first browser to support the new standard by default, and will be rolling it out gradually over the coming weeks in order to address any unforeseen issues.

Whenever you type a website into your address bar, your browser needs to go through a process to convert it into an IP address using a DNS lookup. However, this traffic is normally not encrypted, meaning that its possible for others to see what websites youre visiting. DoH is an attempt to encrypt this information to protect your privacy. Heres a more in-depth explanation from Mozilla that explains it in detail.

Mozilla is motivated in part by ISPs who monitor customers web usage. US carriers like Verizon and AT&T are building massive ad-tracking networks. DoH won't stop the data collection but itll likely make it more difficult.

Although its much harder for others to see your DNS lookups with DoH enabled, the websites will still be visible to the DNS server your browser is connecting to. Thus, Mozilla says Firefox will offer a choice of two trusted DNS providers, Cloudflare and NextDNS, and that Cloudflare will be used as the default. Mozilla has outlined a set of privacy requirements that any DoH provider must abide by in order to be considered a trusted resolver.

Mozilla claims that DoH increases the privacy and security of users online, but the technology has faced fierce criticism from lawmakers and security experts who say that it hampers legitimate attempts by enterprise system administrators and lawmakers to block dangerous web content. Experts also claim the technology doesnt provide the perfect privacy protection that its proponents claim. Only certain parts of the DNS lookup process are encrypted, and internet service providers will still be able to see which IP addresses their users are connecting to, they warn.

When it announced that it would be turning on DoH by default last year, Mozilla said that it would allow for opt-in parental controls and disable DoH if Firefox detects them. It also said that it would disable DoH by default in enterprise configurations.

This controversy means that todays announcement only concerns US-based Firefox users. Mozilla told ZDNet last year that it wouldnt be enabling DoH by default in the UK, where the technology has been criticized by the countrys GCHQ intelligence service, child advocacy groups, and ISPs. In an FAQ on its site Mozilla says its current focus is on enabling the feature in the US only. However, users outside the US will be able to manually turn the feature on by heading into Settings, General, and then scrolling down to Networking Settings.

While Firefox is the first browser to start turning on DoH by default, other browsers such as Chrome, Edge Chromium, and Brave have also started supporting the feature. However, in most cases youll have to dig through their settings in order to enable the feature. Heres a guide from last year on how to do so.

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Firefox turns controversial new encryption on by default in the US - The Verge

Barr’s Motives, Encryption and Protecting Children; DOJ 230 Workshop Review, Part III – Techdirt

from the don't-break-the-internet dept

In Part I of this series on the Department of Justices February 19 workshop, Section 230 Nurturing Innovation or Fostering Unaccountability? (archived video and agenda), we covered why Section 230 is important, how it works, and how panelists proposed to amend it. Part II explored Section 230s intersection with criminal law.

Here, we ask what DOJs real objective with this workshop was. The answer to us seems clear: use Section 230 as a backdoor for banning encryption a backdoor to a backdoor in the name of stamping out child sexual abuse material (CSAM) while, conveniently, distracting attention from DOJs appalling failures to enforce existing laws against CSAM. We conclude by explaining how to get tough on CSAM to protect kids without amending Section 230 or banning encryption.

Banning Encryption

In a blistering speech, Trumps embattled Attorney General, Bill Barr, blamed the 1996 law for a host of ills, especially the spread of child sexual abuse material (CSAM). But he began the speech as follows:

[Our] interest in Section 230 arose in the course of our broader review of market-leading online platforms, which we announced last summer. While our efforts to ensure competitive markets through antitrust enforcement and policy are critical, we recognize that not all the concerns raised about online platforms squarely fall within antitrust. Because the concerns raised about online platforms are often complex and multi-dimensional, we are taking a holistic approach in considering how the department should act in protecting our citizens and society in this sphere.

In other words, the DOJ is under intense political pressure to do something about Big Tech most of all from Republicans, who have increasingly fixated on the idea that Big Tech is the new Liberal Media out to get them. Theyve proposed a flurry of bills to amend Section 230 either to roll back its protections or to hold companies hostage, forcing them to do things that really have nothing to do with Section 230, like be "politically neutral" (the Hawley bill) or ban encryption (the Graham-Blumenthal bill), because websites and Internet services simply cant operate without Section 230s protections.

Multiple news reports have confirmed our hypothesis going into the workshop: that its purpose was to tie Section 230 to encryption. Even more importantly, the closed-door roundtable after the workshop (to which we were, not surprisingly, not invited) reportedly concluded with a heated discussion of encryption, after the DOJ showed participants draft amendments making Section 230 immunity contingent on compromising encryption by offering a backdoor to the U.S. government. Barrs speech said essentially what we predicted he would say right before the workshop:

Technology has changed in ways that no one, including the drafters of Section 230, could have imagined. These changes have been accompanied by an expansive interpretation of Section 230 by the courts, seemingly stretching beyond the statutes text and original purpose. For example, defamation is Section 230s paradigmatic application, but Section 230 immunity has been extended to a host of additional conduct from selling illegal or faulty products to connecting terrorists to facilitating child exploitation. Online services also have invoked immunity even where they solicited or encouraged unlawful conduct, shared in illegal proceeds, or helped perpetrators hide from law enforcement. ...

Finally, and importantly, Section 230 immunity is relevant to our efforts to combat lawless spaces online. We are concerned that internet services, under the guise of Section 230, can not only block access to law enforcement even when officials have secured a court-authorized warrant but also prevent victims from civil recovery. This would leave victims of child exploitation, terrorism, human trafficking, and other predatory conduct without any legal recourse. Giving broad immunity to platforms that purposefully blind themselves and law enforcers to illegal conduct on their services does not create incentives to make the online world safer for children. In fact, it may do just the opposite.

Barr clearly wants to stop online services from going dark through Section 230 even though Section 230 has little (if any) direct connection to encryption. His argument was clear: Section 230 protections shouldn't apply to services that use strong encryption. Thats precisely what the Graham-Blumenthal EARN IT Act would do: greatly lower the bar for enforcement of existing criminal laws governing child sexual abuse material (CSAM), allow state prosecutions, and civil lawsuits (under a lower burden of proof), but then allow Internet services to earn back their Section 230 protection against this increased liability by doing whatever a commission convened and controllled by the Attorney General tells them to do.

Those two Senators are expected to formally introduce their bill in the coming weeks. Undoubtedly, theyll refer back to Barrs speech, claiming that law enforcement needs their bill passed ASAP to protect the children.

Barrs speech on encryption last July didnt mention 230 but went much further in condemning strong encryption. If you read it carefully, you can see where Graham and Blumenthal got their idea of lowering the standard of existing federal law on CSAM from actual knowledge to recklessness, which would allow the DOJ to sue websites that offer stronger encryption than the DOJ thinks is really necessary. Specifically, Barr said:

The Department has made clear what we are seeking. We believe that when technology providers deploy encryption in their products, services, and platforms they need to maintain an appropriate mechanism for lawful access. This means a way for government entities, when they have appropriate legal authority, to access data securely, promptly, and in an intelligible format, whether it is stored on a device or in transmission. We do not seek to prescribe any particular solution. ...

We are confident that there are technical solutions that will allow lawful access to encrypted data and communications by law enforcement without materially weakening the security provided by encryption. Such encryption regimes already exist. For example, providers design their products to allow access for software updates using centrally managed security keys. We know of no instance where encryption has been defeated by compromise of those provider-maintained keys. Providers have been able to protect them. ...

Some object that requiring providers to design their products to allow for lawful access is incompatible with some companies business models. But what is the business objective of the company? Is it A to sell encryption that provides the best protection against unauthorized intrusion by bad actors? Or is it B to sell encryption that assures that law enforcement will not be able to gain lawful access? I hope we can all agree that if the aim is explicitly B that is, if the purpose is to block lawful access by law enforcement, whether or not this is necessary to achieve the best protection against bad actors then such a business model, from societys standpoint, is illegitimate, and so is any demand for that product. The product jeopardizes the publics safety, with no countervailing utility. ...

The real question is whether the residual risk of vulnerability resulting from incorporating a lawful access mechanism is materially greater than those already in the unmodified product. The Department does not believe this can be demonstrated.

In other words, companies choosing to offer encryption should have to justify their decision to do so, given the risks created by denying law enforcement access to user communications. Thats pretty close to a recklessness standard.

Again, for more on this, read Berins previous Techdirt piece. According to the most recently leaked version of the Graham-Blumenthal bill, the Attorney General would no longer be able to rewrite the best practices recommended by the Commission. But he would gain greater ability to steer the commission by continually vetoing its recommendations until it does what he wants. If the commission doesnt make a recommendation, the safe harbor offered by complying with the best practices doesnt go into effect but the rest of the law still would. Specifically, website and Internet service operators would still face vague new criminal and civil liability for reckless product design. The commission and its recommendations are a red herring; the truly coercive aspects of the bill will happen regardless of what the commission does. If the DOJ signals that failing to offer a backdoor (or retain user data) will lead to legal liability, companies will do it even absent any formalized best practices.

The Real Scandal: DOJs Inattention to Child Sexual Abuse

As if trying to compromise the security of all Internet services and the privacy of all users werent bad enough, we suspect Barr had an even more devious motive: covering his own ass, politically.

Blaming tech companies generally and encryption in particular for the continued spread of CSAM kills two birds with one stone. Not only does it offer them a new way to ban encryption, it also deflects attention from the real scandal that should appall us all: the collective failure of Congress, the Trump Administration, and the Department of Justice to prioritize the fight against the sexual exploitation of children.

The Daily, The New York Times podcast, ran part one of a two-part series on this topic on Wednesday. Reporters Michael Keller and Gabriel Dance summarized a lengthy investigative report they published back in September, but which hasnt received the attention it deserves. Heres the key part:

The law Congress passed in 2008 foresaw many of todays problems, but The Times found that the federal government had not fulfilled major aspects of the legislation.

The Justice Department has produced just two of six required reports that are meant to compile data about internet crimes against children and set goals to eliminate them, and there has been a constant churn of short-term appointees leading the departments efforts. The first person to hold the position, Francey Hakes, said it was clear from the outset that no one felt like the position was as important as it was written by Congress to be.

The federal government has also not lived up to the laws funding goals, severely crippling efforts to stamp out the activity.

Congress has regularly allocated about half of the $60 million in yearly funding for state and local law enforcement efforts. Separately, the Department of Homeland Security this year diverted nearly $6 million from its cybercrimes units to immigration enforcement depleting 40 percent of the units discretionary budget until the final month of the fiscal year.

So, to summarize:

Let that sink in. In a better, saner world, Congress would be holding hearings to demand explanations from Barr. But they havent, and the workshop will allow Barr to claim hes getting tough on CSAM without actually doing anything about it while also laying the groundwork for legislation that would essentially allow him to ban encryption.

Even for Bill Barr, thats pretty low.

Filed Under: cda 230, congress, csam, doj, encryption, funding, section 230, william barr

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Barr's Motives, Encryption and Protecting Children; DOJ 230 Workshop Review, Part III - Techdirt

Opinion | The trade-off between privacy and content traceability – Livemint

The ability to have private conversations is fundamental to our modern conception of privacy. I have argued time and again in this column that in our current technological and political context, it is critical that we mandate the use of robust end-to-end encryption to ensure that private conversations are secure from eavesdropping by governments and private corporations alike.

However, no discussion on encryption is complete unless we also speak about how these systems get misused. As much as encrypted messaging is necessary for investigative journalists, whistle-blowers, and abuse helplines, it is tremendously attractive to criminals looking to take advantage of the fact that messages sent over these networks cannot be traced back to them. As a result, these platforms find themselves being used for criminal activities. Of particular concern is the way in which these networks are used to distribute imagery related to children.

In a paper presented at the Web Conference 2019 in San Francisco, it was suggested that the exponential increase in the proliferation of Child Sexual Abuse Imagery (CSAI) on the internet over the last few years is probably directly correlated to the growth of online sharing platforms. Using data from the National Center for Missing and Exploited Children (NCMEC) in the US, an organization that tracks all CSAI content detected by public and online sharing platforms, the paper reported a median growth in reported CSAI of as much as 51% year-over-year. In the first 10 years of its operation, the NCMEC only received 565,000 reports, while in 2017 alone it received over 9.6 million.

This in itself is a cause for concern. However, what is particularly worrying is the increasing globalization of the problem. Ten years ago, 70% of all CSAI that was reported related to abuse committed in the US. Today, 68% of reports relate to abuse in Asia, 19% to abuse in the Americas, 6% in Europe, and 7% in Africa. India, Indonesia and Thailand account for 37% of all reported CSAI, with India leading the list.

The paper suggests that this increase is a direct consequence of improvements in technology, including smartphones, high bandwidth internet connectivity, low-cost cloud storage, and the plethora of applications we can choose from today for internet messaging. If you consider video content alone, it would not be an exaggeration to suggest that the extraordinary growth in CSAI videos from under 1,000 reports a month in 2013 to more than 2 million reports per month in 2017 is almost entirely on account of the proliferation of smartphones that can, at the press of a button, record a high-definition video and directly upload it onto the internet. As much as 84% of CSAI images and 91% of videos have only ever been reported once, which suggests that there is a prodigious amount of new content that is constantly being created.

To their credit, technology companies have been working on this issue, but so far their efforts have simply not been able to keep pace with the problem. Most companies have large teams of human reviewers who scan through the hundreds of millions of user generated images to identify CSAI. Flagged content is then uploaded to a PhotoDNA technology tool which generates a fingerprint of the image that lets it be identified even if the original image has been transformed to avoid detection. However, this is not enough. PhotoDNA can only detect images that have already been flagged during a manual review. It cannot itself identify new content. Given the volumes of original CSAI being created, it is impossible to have human reviewers to manually flag all the content going online. What is needed is a technological solution, and the paper suggests a number of new techniques that can be used, including scene clustering and facial clustering, which will automatically flag content without any need of human intervention.

What the paper does not specifically address is the fact that as so much of this content is shared over secure messaging networks, the encryption deployed by these applications will effectively stymie their own ability to review the content flowing through them. This means that no matter how good the technology we build to automatically detect CSAI content might be, it will be useless if the content is shared through these messaging systems.

Of the many trade-offs we have to make in the arena of technology policy, this, to me, is probably the hardest. I have long been a strong votary of the need to build encrypted networks to protect essential civil liberties. However, I struggle to reconcile that position with the knowledge that once built, these networks will invariably get used for the most vile of criminal activities. From the statistics in the paper cited earlier, it now appears that the very existence of these networks and the immunity from traceability that they provide have actively encouraged the proliferation of heinous crimes against innocent children.

I am not sure that we will ever be able to devise a truly effective solution that strikes the appropriate balance between these two concerns. As much as policy issues are never binary, technology unfortunately is, and opening even the tiniest of backdoors to allow distributors of CSAI to be tracked down will destroy the protection that encryption offers us all.

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Opinion | The trade-off between privacy and content traceability - Livemint

Encryption Software Market Segmented by Product, Top Manufacturers, Geography Trends & Forecasts to 2025 – Keep Reading

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Encryption Software Market Segmented by Product, Top Manufacturers, Geography Trends & Forecasts to 2025 - Keep Reading

IoT Security Solution for Encryption Market Estimated to be driven by Innovation and Industrialization – Keep Reading

IoT Security Solution for Encryption Market 2025: IoT Security Solution for Encryption

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Market Segmentation: Global IoT Security Solution for Encryption Market The market is based on product, end-user, and geographical segments. Based on type, the market is segmented into ,Software Platforms,Service, Based on end-user, the market is segmented into Healthcare,Information Technology (IT),Telecom,Banking,Financial Services, And Insurance (BFSI)/Automotive,

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IoT Security Solution for Encryption Market Estimated to be driven by Innovation and Industrialization - Keep Reading

UK court told Assange tried to call White House, Hillary Clinton over data dump – Reuters

LONDON (Reuters) - Julian Assange tried to contact Hillary Clinton and the White House when he realised that unredacted U.S. diplomatic cables given to WikiLeaks were about to be dumped on the internet, his lawyer told his London extradition hearing on Tuesday.

Assange is being sought by the United States on 18 counts of hacking U.S. government computers and an espionage offence, having allegedly conspired with Chelsea Manning, then a U.S. soldier known as Bradley Manning, to leak hundreds of thousands of secret documents by WikiLeaks almost a decade ago.

On Monday, the lawyer representing the United States told the hearing that Assange, 48, was wanted for crimes that had endangered people in Iraq, Iran and Afghanistan who had helped the West, some of whom later disappeared. [nL5N2AO0W5]

U.S. authorities say his actions in recklessly publishing unredacted classified diplomatic cables put informants, dissidents, journalists and human rights activists at risk of torture, abuse or death.

Outlining part of his defence, Assanges lawyer Mark Summers said allegations that he had helped Manning to break a government password, had encouraged the theft of secret data and knowingly put lives in danger were lies, lies and more lies.

He told Londons Woolwich Crown Court that WikiLeaks had received documents from Manning in April 2010. He then made a deal with a number of newspapers, including the New York Times, Britains Guardian and Germanys Der Spiegel, to begin releasing redacted parts of the 250,000 cables in November that year.

A witness from Der Spiegel said the U.S. State Department had been involved in suggesting redactions in conference calls, Summers said.

However, a password that allowed access to the full unredacted material was published in a book by Guardian reporters about WikiLeaks in February 2011. In August, another German newspaper reported it had discovered the password and it had access to the archive.

A spokesman for The Guardian said the authors were told the password was temporary and the book contained no details about the whereabouts of the files.

Summers said Assange attempted to warn the U.S. government, calling the White House and attempting to speak to then- Secretary of State Clinton, saying unless we do something, peoples lives are put at risk.

Summers said the State Department had responded by suggesting that Assange call back in a couple of hours.

The United States asked Britain to extradite Assange last year after he was pulled from the Ecuador embassy in London, where he had spent seven years holed up avoiding extradition to Sweden over sex crime allegations which have since been dropped.

Assange has served a prison sentence in Britain for skipping bail and remains jailed pending the U.S. extradition request

Supporters hail Assange as an anti-establishment hero who revealed governments abuses of power, and argue the action against him is a dangerous infringement of journalists rights. Critics cast him as a dangerous enemy of the state who has undermined Western security.

Reporting by Michael Holden; Editing by Gareth Jones and Giles Elgood

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UK court told Assange tried to call White House, Hillary Clinton over data dump - Reuters

Julian Assange’s lawyer claims US wanted to kill WikiLeaks founder and make it look like accident – New York Post

The US plotted to kidnap and possibly kill Julian Assange as he hid out at the Ecuadorian embassy in London aiming to make it look like an accident, the WikiLeaks founders lawyer claimed at his extradition hearing this week.

American spies teamed up with UC Global, a Spanish company contracted by Ecuador to provide security at the embassy, to help plant intrusive and sophisticated secret surveillance of Assange, his attorney stated without evidence at the London hearing Monday, according to reports.

Assange was even filmed meeting with his legal team and got so desperate about constant surveillance that he started sleeping in a tent inside his bedroom, the Telegraph reported.

It was part of an alleged plot that contemplated a sinister ending for the hacker accused of putting lives at risk with his massive dump of top-secret US documents and diplomatic cables, the court was told.

There were conversations about whether there should be more extreme measures contemplated, such as kidnapping or poisoning Julian Assange in the embassy, Assanges attorney, Edward Fitzgerald, told the court, according to the Daily Mail.

US Globals owner, David Morales, was exposed by a mysterious Iberian whistleblower known only as Witness Two, the report says.

Witness Two revealed that Morales said the Americans were desperate and had even suggested more extreme measures could be applied against the guest to put an end to the situation, Fitzgerald told the court, the Mail said.

AP

AP

AP

Julia Quenzler / SWNS

Morales was actively working with the dark side in other words, US intelligence agencies, Fitzgerald claimed, according to the report.

It was suggested that the embassy door could be left open to make a kidnapping look like it could have been an accident, Assanges attorney claimed.

Assange initially entered the embassy in 2012 to avoid extradition to Sweden over sex offense allegations, which were eventually dropped.

He remained there after being indicted in the US on 18 charges over the publication of hundreds of thousands of classified documents, which his legal team says could see him sentenced to 175 years in prison.

Ecuador finally kicked him out of the embassy last April and Assange was immediately arrested by British police ready for the extradition hearing that finally started Monday.

Assange watched the proceedings from the courtroom dock, brought there from Belmarsh Prison next door.

The hearing will be adjourned at the end of the week and continue with three weeks of evidence scheduled for May. A decision on the case is not expected for months.

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Julian Assange's lawyer claims US wanted to kill WikiLeaks founder and make it look like accident - New York Post

Warren Buffett Doesnt Want to Own any Cryptocurrency – Cointelegraph

Cryptocurrencies basically have no value, Warren Buffett said in an interview on Monday.

Speaking to CNBC reporter Becky Quick on Feb. 24, the fourth-wealthiest person in the world discussed his impression of Bitcoin following a fundraiser. In attendance was Justin Sun, CEO of Tron, and long-time believer in crypto.

In May 2019, the two gathered with others at a fundraiser for the Glide Foundation, a charity organization that helps the homeless in San Francisco. Speaking billionaire to billionaire, the young Sun suggested the seasoned Warren consider investing in cryptocurrency.

However, when pressed on whether Sun had given him any Bitcoin after the exchange, Buffett balked:

I dont own any cryptocurrency. I never will You cant do anything with it except sell it to somebody else.

He also commented on the fact that the cryptocurrency has been associated with money laundering and terrorism:

Bitcoin has been used to move around a fair amount of money illegally.

Buffett made the bulk of his fortune from hedge funds and insurance. He has an estimated net worth of $88.9 billion.

Bitcoin has seen major investments from millionaires and billionaires alike, but as Warren demonstrated, some who made their fortunes using more established means are reluctant to accept cryptocurrencies. Mark Cuban, the billionaire who rose to fame in the dot-com bubble, has said hed rather have bananas than Bitcoin.

On the other hand, there have been some success stories. Tyler and Cameron Winklevoss may not have reaped the benefits of Facebook, but the two have a combined net worth of over $1.4 billion after founding the crypto exchange Gemini.

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Warren Buffett Doesnt Want to Own any Cryptocurrency - Cointelegraph

Crypto Appears on Simpsons Where Jim Parsons Explains It’s ‘Cash of the Future’ – Cointelegraph

One of the latest episode of "The Simpsons" aired has just aired featuring Jim Parsons of Big Bang Theory appearing as a guest star to explain cryptocurrencies and how a blockchain works.

In the song and dance predicts cryptocurrency to be the future money, the animated ledger states: "Each day I'm closer, to being the cash of the future. Not in your wallet, I'm in your computer!

At the end of Jims talk, there is a subliminal message on screen. It further explains how cryptocurrencies work, part of which says:

"Using the word "cryptocurrency" repeatedly while defining cryptocurrency makes it seem like we have a novice's understanding of cryptocurrency. Well that is a total pile of cryptocurrency. In this system, rules are defined for the creation of additional units of cryptocurrency. They can be generated by fiat like traditional currency or just thrown around randomly or all given to LeBron."

The crypto community welcomed the episode. Altcoin Daily account has commented:

The Simpsons did it! Cryptocurrency explained to Lisa by the great Jim Parsons on #TheSimpsons! It's the money of the future! Bullish!

Some comments to the tweet also pointed out that the Simpsons has a reputation for predicting the future over the years. Ten years ago it showcased Donald Trump as the president of the U.S., and more recently guessed the Game of Thrones series finale.

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Crypto Appears on Simpsons Where Jim Parsons Explains It's 'Cash of the Future' - Cointelegraph

Cryptocurrency exchange operator ruled in breach of contract – The Straits Times

The Court of Appeal has ruled in a landmark case that virtual currency exchange operator Quoine must pay damages for wrongfully reversing a number of transactions on its platform.

The apex court yesterday rejected Quoine's argument that it was entitled to unilaterally cancel the seven orders - placed by trader B2C2 to sell ethereum for bitcoin - on the basis the transactions were a mistake.

Quoine had argued that the parties who transacted with B2C2 were under the mistaken belief that the trades were at market price and that B2C2 knew of this mistake.

The case is the first legal dispute in Singapore involving cryptocurrency. It is also believed be the first in the Commonwealth to deal with the question of how the legal doctrine of mistake should be applied when contracts are made by computerised trading systems, without human involvement.

The case will now centre on assessing how much damages should be paid to B2C2.

Both companies use complex computer systems to place buy and sell orders on Quoine's platform.

Quoine's software retrieves price information from other currency exchanges to generate orders. B2C2's software evaluates the first 20 market prices, excluding low volume orders, and calculates an appropriate price to buy or sell.

The software has a fail-safe "deep price" of 10 bitcoin to one ethereum. This kicks in when there is insufficient market data.

In April 2017, a glitch in Quoine's software made it unable to access external data and it stopped creating new orders. This led to B2C2's "deep price" taking effect.

On April 19, 2017, seven trades were carried out by the computer systems, with 3,092 bitcoins being credited to B2C2 in exchange for about 309 ethereum debited. This was at a rate of about 250 times the prevailing exchange rate of about 0.04 bitcoin to one ethereum.

Quoine became aware of these trades the next day and unilaterally reversed the transactions. B2C2, represented by Mr Danny Ong, then sued Quoine, arguing that the cancellations amounted to a breach of contract and a breach of trust.

The Singapore International Commercial Court found in March last year that Quoine was in breach of both contract and trust.

Quoine, represented by Senior Counsel Stanley Lai, appealed before a five-judge panel.

The majority - comprising Chief Justice Sundaresh Menon, Judges of Appeal Andrew Phang and Judith Prakash and International Judge Robert French - dismissed Quoine's appeal on breach of contract.

They held that, in the context of contracts made by computer systems, it is the programmer's state of knowledge that is relevant, from the point of programming up to the forming of the contract.

In other words, the court has to determine whether in programming the system, the programmer was acting to take advantage of offers made by a party operating under a mistake.

The court said there was no mistake in this case as to the terms of the trading contract. Even assuming there was a mistake, the creator of B2C2's software did not know of this mistaken belief.

International Judge Jonathan Mance dissented on this issue.

The court allowed the appeal on breach of trust, saying that no trust was created over the bitcoins in B2C2's account.

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Cryptocurrency exchange operator ruled in breach of contract - The Straits Times