A Cryptocurrency Exchange, A Dead Man’s Account, and Exhuming a Corpse

• January 31, 2020
• by:  RKN Global 
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Lawyers who represent the users of the collapsed Quadriga CX cryptocurrency exchange platform have asked Canadian authorities to dig up and examine the body of Gerald Cotten.  Cotten was the CEO and co-founder of Quadriga. In December, he died while traveling in India.  He was also the only person in the world who could access $145 million worth of clients’ assets.

$145 million worth of assets frozen in Cotten’s account

Cryptocurrency users who were affected by the collapse of the digital currency reportedly want to check if the person buried is really Gerald Cotten. Quadriga was one of the biggest cryptocurrency exchanges in Canada before Cotten’s death. After Cotten died, Quadriga said that it couldn’t access its clients’ money.  It said that about $145 million were left frozen in an account accessible only by Cotten.

Cotten’s death  plunged Quadriga into deep crisis and the company called Quadriga Fintech Solutions Corp. is now in bankruptcy proceedings. The executives of Quadriga are struggling to find out a way to refund more than 100,000 users.

The law firm Miller Thompson LLP requested an exhumation and autopsy of Gerald Cotton’s body to confirm both the cause of death and identity of the body.

A Cold Wallet with One Key

According to Quadriga, it stored many of the digital assets offline in accounts called “cold wallets” in order to protect them from hackers.  However, Cotten was the only person with the access to those wallets.  This created an enormous risk for investors.  Dependence on one person for access to investor assets without any oversight or redundancies is dangerous.  It exposes investors to a high risk of loss through fraud or accident. The inability to access a dead man’s account impacted over 115,000 customers and led to the closure of QuadrigaCX.

Fake News Alerts in India

• January 24, 2020
• by:  RKN Global 
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Modern problems require modern solutions. Facebook, in its war against fake news and misinformation, has now come up with a new solution to alert users about fake news. The tech company has merged tech and human review together to alert users about fake news in videos, images or posts shared on the platform.

The role of third-party fact-checkers

The tech company is working with third-party fact-checkers to identify and review misinformation.

In December 2016, Facebook began a fact-checking programme which now has over 24 partners in 14 countries. In India, some of the third-party fact-checkers include big names like India Today Group, Vishvas.news, Fact Crescendo, BoomLive, and Factly. The Indian government announced the release of an online portal last month to curb fake news on social media platforms.

Facebook harnesses user feedback in addition to third party fact-checkers to identify fake news. A post which has even a little link to false information will automatically be down-ranked by an algorithm. The platform will curtail the reach of accounts or pages for repeat offenders and limit their ability to promote content.

Fake news alerts notifying users posting fake content

Facebook said that it would notify page admins and users when they have shared posts that are suspected to contain false content or misinformation.

It also said it would mark stories as fake news, stating clearly that the primary claims in the post are factually inaccurate.

Unplug Everything: Ransomware Attacks on Cities

• January 10, 2020
• by:  RKN Global 
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Hackers used ransomware to attack the city of New Orleans in December.  The attack was the third ransomware hack on the State of Louisiana, and followed ransomware attacks on other cities.  Of course, the massive attack created an emergency for the city.

The Response:  Unplug everything

Following the attack, the city instructed all of its employees to completely disconnect their systems.  This meant disconnecting wifi and unplugging their computers.

How does one communicate about a cyber attack without using the internet?  New Orleans officials used the city hall public loudspeaker systems to alert employees about the cyber-attack.

The cause of the hack was uncertain. Employees did not respond to phishing emails. Therefore, it was unclear how hackers got access to the city’s systems.

Preparation

The city appeared prepared to function after such an attack.  Even though its website was down and a great deal of functionality was lost, the city continued to function. Of course, New Orleans police continued to function effectively. They used radios and backup communications to continue their work. Similarly, 911 emergency services continued unabated.  In parallel, other services, like scheduling of building inspections, continued manually.

Previous ransomware attacks on Louisiana’s governments included an attack on its school districts and on the state government’s IT network.   In recent years, Atlanta and Baltimore bore the brunt of ransomware attacks as well.

The Ransomware Dilemma, Magnified

Ransomware attacks put victims in a difficult situation. This is because paying the ransom encourages more ransomware attacks. On the one hand, if victims never paid the ransom, the attacks would disappear.  On the other hand, not paying the ransom means victims will lose valuable data.  Naturally, that can make life very difficult and even cripple businesses.

The problem is magnified for governments.  Their data relates not “just” to an individual or a business, but to entire cities and states.  The potential harm is on a massive, public scale.