Daily Archives: February 26, 2017

Danish law enforcement have arrested drug traffickers after an investigation that included surveilling the blockchain, according to the regional publication Berlingske. The Danish polices cyber crime unit NC3 claim they have made arrests based on criminal activity tracked via bitcoin transactions.

Law enforcement officials are indeed working with blockchain surveillance software globally, and even warning against the use of digital currency mixers.

Also read:Basel Institute: Take Action Against Digital Currency Mixers/Tumblers

The chief of the Danish cyber crime unit, Kim Aarenstrup, has revealed authorities in the region created a tracking system that analyzes bitcoin transactions. Aarenstrup details the tool has helped police with two narcotics convictions. One arrest took place in January when Danish police arrested a young man for purchasing ketamine, cocaine, and amphetamines on darknet marketplaces. (DNM)

Bitcoin and virtual currency in general is used a lot for trafficking in weapons and drugs, ransom cases and extortion cases, Aarenstrup said. It has become a heavily used tool for criminals. We are pretty much unique in the world at this point because theyre not really any others who have managed to use these trails as evidence.

The Danish prosecutor who worked on the convictions, Jesper Klyve, explained their blockchain analysis worked because the drug traffickers had correlatedbitcoin transactions. Many services that offer bitcoin purchasing platforms follow strict KYC policies and buyers typically have to verify their identification.

Aarenstrup told the press the new blockchain surveillance system was ground-breaking.

The Danish cyber crime unit is not the only agency utilizing blockchain surveillance software to capture criminals. There are four known startups using bitcoin transaction analysis tools and collaborating with law enforcement worldwide. Companies utilizing blockchain surveillance software include Elliptic, Chainalysis, Numisight, and Skry. Both Elliptic and Chainalysis have been working with law enforcement agencies like the FBI, Interpol, Europol and KYC/AML platform providers.

Last summer, Chainalysis detailed that the company was working with global authorities to combat ransomware. Michael Gronager, CEO and co-founder of Chainalysis,said at the time, Expect to see some arrests soon as law enforcement agencies wrap up their investigations into several ransomware operations.

In January, the Basel Institute on Governance, Europol, Interpol, and officialsfrom Qatar warned against the use of bitcoin transaction mixers.

All countries are advised to take action against digital currency mixers/tumblers, theyexplained.

Alongside the rise of startups and law enforcement deploying blockchain surveillance, software developers are also creating privacy-centric transaction tools and concepts for Bitcoin. Ideas like Tumblebit, Schnorr signatures, confidential transactions, and other protocols are being developed. There are also in-production mixing services like Joinmarket, and anonymizing wallets like Samourai.

The privacy activists behind the Samourai wallet recently introduced features like Ricochet, and reusable payment codes. Samourai rebukes warnings made by bureaucrats and law enforcement against privacy-enhancing tools. In a recent blog post called The Bureaucrats Are Coming, the privacy-centric wallet developers explain they are ready to fight the state.

Samourai will not cower to these ivory tower elites We will actively work to destroy the effectiveness of any legislation or policy that is produced.

What do you think about law enforcement officials tracking bitcoin transactions? Let us know in the comments below.

Images courtesy of Shutterstock, Danish Cyber Crime Unit, and Chainalysis.

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Danish Police Surveil the Blockchain to ... - news.bitcoin.com

Forbes

Beyond Bitcoin: Blockchain R&D Firm Investing $1M+ In Scottish University Tech Lab Forbes With cascading disruption and decentralization in the blockchain space the order of the day, IOHK, a leading blockchain research and development company, and the University of Edinburgh are to invest between $500,000 and $1 million (m) a year in the ... and more »

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Beyond Bitcoin: Blockchain R&D Firm Investing $1M+ In Scottish University Tech Lab - Forbes

Bitcoin users need to be well aware of the recent CloudFlare issue, as it affects quite a few different cryptocurrency-related services. Several companies issued warnings regarding CloudBleed, all of whom advise users to change their passwords. With so many exchanges relying on CloudFlare, this is another example of why centralization needs to be avoided.

To put the CloudBleed security issue into perspective, the scope of services affected by this data leak extends well beyond the bitcoin space. It is believed the data leak exposes thousands of passwords and other personal information for several months until it was discovered. Cloudflare managed nearly 10% of all web traffic, which makes it one of the backbones of the internet, so to speak. Unfortunately, this also means virtually every popular service is affected by this data leak.

Among the information being leaked to anyone who requested it are passwords, cookies, messages, and any other type of personal information one can think of. The bug was discovered in September of 2016, yet no further specific details were provided to us at this time. We do know the list of clients affected by CloudBleed is a lot larger than most people would think possible.

Security analysts at Googles Project Zero noticed an overflow error that could leak sensitive information to search engines and other platforms scraping data from the internet. This opens up a treasure trove of financial information to hackers and other criminals looking to take advantage of it. It is unclear if any of this information was obtained by hackers, but it seems very plausible that is the case.

Cloudflare CEO Matthew Prince is confident the issue was fixed before someone could even take advantage of the flaw. That is a rather bold and positive statement, although it wont necessarily put peoples minds at ease. Various bitcoin companies issued warnings to their users to change their password immediately, as that remains the best course of action. Moreover, any platform where the same password was used will need to have the credentials updated as well.

The list of affected bitcoin companies is rather long and includes virtually every platform most users ever come in contact with. Popular exchanges, such as Coinbase, BTC-E, QuadrigaCX, Kraken, Bitstamp, and Bitfinex, for example, are all using Cloudflare for their Anti-DDOS protection. All of these companies advised users to update their password sooner rather than later. LocalBitcoins is also affected, even though the platform does not act as a custodian for funds. Then again, having someone steal your account and scamming users is still a real threat.

This event goes to show multiple companies relying on one and the same anti-DDoS provider is a big problem. Especially in the world of bitcoin and decentralization, a more distributed solution is direly needed. CloudFlare has built a strong reputation over the past few years, but this data leak highlights the problem of centralization. All bitcoin users relying on a service affected by this leak need to update their login credentials as soon as possible, that much is certain.

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CloudBleed Data Leak Is A Big Threat To Bitcoin Platforms - The Merkle

In the last few months devastating earthquakes have hit central Italy, devastating many mountain villages, killing nearly 300 people and displacing 22 thousand inhabitants. The environmentalist association Legambiente, and several partners, have since been collaborating on a crowdfunding campaign for those affected.

Legambiente (League for the Environment) is the most widespread environmental organization in Italy, with 20 Regional branches and more than 115,000 members. It is acknowledged as association of environmental interest by the Ministry of the Environment; it represents the UNEP National Committee for Italy, it is one of the leading member of the European Environmental Bureau, and of IUCN - the World Conservation Union.

The bitcoin based campaign was Legambientes first foray into bitcoin donations, thanks to Helperbit. 59 percent of the campaigns goal, over eight bitcoins, have already been raised. Five of those bitcoins were donated by insurance giant Swiss Re.

- Helperbit

Helpbit is an Italian startup that uses Blockchain technology to allow people to donate digital and local currencies to charities and people in need all over the world, while tracking the donations and the manner in which they are used.

The company co-founders Guido Baroncini Turricchia, Davide Gessa, Davide Menegaldo, Roberto Tudini, Vincenzo Agu and Gianluca Carbone, initially came up with the idea for their platform in 2009, after reading news about the ineffective management of charitable funds following the 2009 LAquila earthquake in Italy.

In 2012, the Italian il Fatto Quotidiano reported that the five million euros donated by Italians to help with building reconstruction were transferred to a guarantee fund, which locked up the funds for nine years.

The lack of transparency that characterizes the traditional systems allows donative streams to be drained along their way to those who need it, Helperbit states. The lack of transparency puts people off donating and we want to unlock this unexpressed donative potential.

Having officially launched in 2015, Helperbit now offers a bitcoin platform that allows people to donate digital and local currencies to charities and people in need all over the world. Donors can trace the funds and the manner in which they are used, offering true transparency.

- Helperbit

The recent fundraising campaign provided a specific case study for the Helperbit platform. The campaign funds are being offered to local entrepreneurs. We want to support and promote their economic activities and finance projects presented by those that, in front of the tragedy of the earthquake, want to react, investing on new corporate initiatives in those areas, Helperbit explains.

Among the many affected locals, the earthquake in central Italy has taken away everything Ilaria and Lorenzo have. The owners of Societ Agricola Etiche Terre S.S., moved to the region less than a year ago to start the production of saffron, garlic and black truffle.

The farmers recently uploaded the first invoice on the Helperbit platform, activating a refund request from Legambiente. Much of the process is visible in the public Bitcoin Blockchain, including the proof of expenditure with a cryptographic reference to the invoice.

The document certifying the request and the transaction are now inextricably linked in the immutable and decentralized public register, giving the opportunity to verify the sender, the recipient and the justification. The process provides a higher level of transparency and increases donor participation. They know precisely how the funds are spent.

Donors should be able to decide how their donation is used. Organizations that act properly should not be affected by few bad behaviors, states Helpbit. Our aim is to offer tools that allow the system to work with a complete audit of economic flows.

Each campaign Helperbit runs uses multisignature technology. Recipients get as many multisignature keys as is appropriate for their organization. This reduces drastically the risk of theft and misuse of the donations, Helperbit explains. Donors also receive a key. Helperbit Donors can fund their accounts by either sending bitcoin or simply use their own debit cards. Organization can accept bitcoin or local currency.

The platform won second place in the iBank Challenge 2016 competition in December, taking home 11,000 after beating out all but one of the 83 contestants. The contest was promoted by the Italian Banking Association and organized by its own R&D laboratory, ABI Lab.

- Helperbit

Vaious Charities including the Red Cross and Greenpeace hace accepted bitcoins for individual fundraisers in the past, but typically they do not explore accepting bitcoin permanently as the size of the market is still too small. Unfortunately, few if any of these attempts have exposed the major charities to the technological benefits of using a blockchain.

Bitgives GiveTrack is one of very few similar attempts at tracking charity funding from donor to recipient. The platform has many of the same features as Helperbit, and has successfully run several campaigns. The Water Project raised $11,000, more than their $10,000 goal.

Read more here:
Bitcoin charity platform Helperbit completes first case study - Brave New Coin