Posts Tagged: Bitcoins


7
Feb 14

Florida Targets High-Dollar Bitcoin Exchangers

State authorities in Florida on Thursday announced criminal charges targeting three men who allegedly ran illegal businesses moving large amounts of cash in and out of the Bitcoin virtual currency. Experts say this is likely the first case in which Bitcoin vendors have been prosecuted under state anti-money laundering laws, and that prosecutions like these could shut down one of the last remaining avenues for purchasing Bitcoins anonymously.

michaelhackfeedbackWorking in conjunction with the Miami Beach Police Department and the Miami-Dade State Attorney’s office, undercover officers and agents from the U.S. Secret Service’s Miami Electronic Crimes Task Force contacted several individuals who were facilitating high-dollar transactions via localbitcoins.com, a site that helps match buyers and sellers of the virtual currency so that transactions can be completed face-to-face.

One of those contacted was a localbitcoins.com user nicknamed “Michelhack.” According to this user’s profile, Michelhack has at least 100 confirmed trades in the past six months involving more than 150 Bitcoins (more than $110,000 in today’s value), and a 99 percent positive “feedback” score on the marketplace. The undercover agent and Michelhack allegedly arranged a face-to-face meeting and exchanged a single Bitcoin for $1,000, a price that investigators say included an almost 17 percent conversion fee.

According to court documents, the agent told Michelhack that he wanted to use the Bitcoins to purchase stolen credit cards online. After that trust-building transaction, Michelhack allegedly agreed to handle a much larger deal: Converting $30,000 in cash into Bitcoins.

Investigators had little trouble tying that Michelhack identity to 30-year-old Michell Abner Espinoza of Miami Beach. Espinoza was arrested yesterday when he met with undercover investigators to finalize the transaction. Espinoza is charged with felony violations of Florida’s law against unlicensed money transmitters — which prohibits “currency or payment instruments exceeding $300 but less than $20,000 in any 12-month period” — and Florida’s anti-money laundering statutes, which prohibit the trade or business in currency of more than $10,000.

Police also conducted a search warrant on his residence with an order to seize computer systems and digital media. Also arrested Thursday and charged with violating both Florida laws is Pascal Reid, 29, a Canadian citizen who was living in Miramar, Fla. Allegedly operating as proy33 on localbitcoins.com, Reid was arrested while meeting with an undercover agent to finalize a deal to sell $30,000 worth of Bitcoins.

Documents obtained from the Florida state court system show that investigators believe Reid had 403 Bitcoins in his on-phone Bitcoin wallet alone — which at the time was the equivalent of approximately USD $316,000. Those same documents show that the undercover agent told Reid he wanted to use the Bitcoins to buy credit cards stolen in the Target breach.

Nicholas Weaver, a researcher at the International Computer Science Institute (ICSI) and at the University of California, Berkeley and keen follower of Bitcoin-related news, said he is unaware of another case in which state law has been used against a Bitcoin vendor. According to Weaver, the Florida case is significant because localbitcoins.com is among the last remaining places that Americans can use to purchase Bitcoins anonymously.

“The biggest problem that Bitcoin faces is actually self-imposed, because it’s always hard to buy Bitcoins,” Weaver said. “The reason is that Bitcoin transactions are irreversible, and therefore any purchase of Bitcoins must be made with something irreversible — namely cash. And that means you either have to wait several days for the wire transfer or bank transfer to go through, or if you want to buy them quickly you pay with cash through a site like localbitcoins.com.” Continue reading →


1
Nov 13

How To Avoid CryptoLocker Ransomware

Over the past several weeks, a handful of frantic Microsoft Windows users have written in to ask what they might do to recover from PC infections from “CryptoLocker,”  the generic name for an increasingly prevalent and nasty strain of malicious software that encrypts your files until you pay a ransom. Unfortunately, the answer for these folks is usually either to pay up or suck it up. This post offers a few pointers to help readers avoid becoming the next victim.

A Cryptolocker prompt and countdown clock. Photo: Malwarebytes.org

A CryptoLocker prompt and countdown clock. Image: Malwarebytes.org

According to reports from security firms, CryptoLocker is most often spread through booby-trapped email attachments, but the malware also can be deployed by hacked and malicious Web sites by exploiting outdated browser plugins.

The trouble with CryptoLocker is not so much in removing the malware — that process appears to be surprisingly trivial in most cases. The real bummer is that all of your important files — pictures, documents, movies, MP3s — will remain scrambled with virtually unbreakable encryption unless and until you pay the ransom demand, which can range from $100 to $300 (and payable only in Bitcoins).

File-encrypting malware is hardly new. This sort of diabolical threat has been around in various incarnations for years, but it seems to have intensified in recent months. For years, security experts have emphasized the importance of backing up one’s files as a hedge against disaster in the wake of a malware infestation. Unfortunately, if your backup drives are connected physically or via the local network to the PC that gets infected with CryptoLocker, your backups may also be encrypted as well.

Computers infected with CryptoLocker may initially show no outward signs of infection; this is because it often takes many hours for the malware to encrypt all of the files on the victim’s PC and attached or networked drives. When that process is complete, however, the malware will display a pop-up message similar to the one pictured above, complete with a countdown timer that gives victims a short window of time in which to decide whether to pay the ransom or lose access to the files forever.

Fortunately, there are a couple of simple and free tools that system administrators and regular home users can use to minimize the threat from CryptoLocker malware. A team of coders and administrators from enterprise consulting firm thirdtier.net have released the CryptoLocker Prevention Kit — a comprehensive set of group policies that can be used to block CryptoLocker infections across a  domain. The set of instructions that accompanies this free toolkit is comprehensive and well documented, and the group policies appear to be quite effective.

Continue reading →