Privacy and Cybersecurity News: Week of 5-25-2013

Chinese Hackers Gain Access to US “Family Jewels” of Weapon Designs
US-China to Meet, Discuss Cyber Attacks
China Preps Military With Training on “Digital Warfare”
Bruce Schneier on “The Politics of Security in a Democracy”
Jeremy Hammond Newest Lulzsec Hacker to Plead Guilty
Liberty Reserve Indicted With Money Laundering

Chinese Hackers Gain Access to US “Family Jewels” of Weapon Designs
Ellen Nakashima with the Washington Post reports that, according to Pentagon officials,“[d]esigns for many of the nation’s most sensitive advanced weapons systems have been compromised by Chinese hackers” Nakashima points to the “significance and extent” of this latest breach as a reason “why the Obama administration has escalated its warnings to the Chinese government to stop what Washington sees as rampant cyber­theft.”  The report is lengthy, but well worth a read. Also attach is an article in the New Yorker discussing some of the more domestic concerns of these hacks, like “What happens to the [government] contractors who did not adequately defend [US] secrets?”
US-China to Meet, Discuss Cyber Attacks
Ewen MacAskill with The Guradian reports that “[President] Obama will confront Chinese president Xi Jinping next week over a spate of cyber-attacks on the US, including the latest allegation that Chinese hackers gained access to more than two dozen of America’s most advanced weapons systems (discussed above).” The meeting, according to MacAskill, will occur June 7th and 8th in California. According to MacAskill, this will be the first meeting between President Obama andPresident Xi Jinping since Xi’s promotion to president
China Preps Military With Training on “Digital Warfare”
Xinhua, China’s state-sponsored news agency, recently reported that “[t]he People’s Liberation Army (PLA) will conduct an exercise next month to test new types of combat forces including units using digital technology.” The report states that the efforts focues on PLA’s “efforts to adjust to informationalized war.” Charlie Osborne with CNet News reports that, according to the army’s general staff department, “eight military academies and forces from the Beijing Military Area Command will participate in the exercises.”
Bruce Schneier on “The Politics of Security in a Democracy”
Security technologist, Bruce Schneier’s recent op-ed for CNN highlights some of the political struggles associated with security (both virtual and physical). Aside from the psychological tendency for individuals to over-exaggerate fear and risk, Schneier makes a strong point that “there are other reasons that it’s smart politics to exaggerate terrorist threats, and security threats in general.” The “good politics” of promote action on security is, according to Schneier, broken down into 4 reasons: (1) the positive response to strong leadership, (2) the positive response to “doing something – anything,” (3) the general success of the “fear-preacher,” and, of course (4) money. Schneier provides some suggestions for moving forward, but none more signfigant than his final point: “Our leaders’ job is to resist [the politically-favorable tendencies to apply draconian police powers]. Our job is to support politicians who do resist.”
Jeremy Hammond Newest Lulzsec Hacker to Plead Guilty
On Tuesday, Jeremy Hammond plead guilty “to conspiring to attack a global intelligence firm,” reports Nichole Perlroth and Colin Moynhan with the New York Times. Hammond is the latest Lulzsec hacker, the small hacking group spun from the large group Anonymous, to plead guilty to the information leak of global intelligence firm Stratfor.  Like many of the other Lulzsec hackers, Perlorth and Moynhan report that Hammonds arrest came after former Lulzsec hacker Hector Xavier Monsegur (Sabu) “helped law-enforcement officials infiltrate Lulzsec.” Perlorth and Moynhan report that “Hammond faces up to 10 years in prison” and “has agreed to pay up to $2.5 million in restitution.” The N.Y. Times article is below, along with a slew of other articles (I would suggest Andy Greenberg’s article with Forbes)
Liberty Reserve Indicted With Money Laundering
Liberty Reserve, a private digital currency exchange, has been shut down and indicted for a “$6 billion money-laundering” online operation, according to New York Times Reporters, Marc Santora, William Rashbaum and Nichole Perlorth. According to the reporters, federal prosecutors in New York have accused Liberty Reserve as being “a central hub for criminals trafficking in everything from stolen identities to child pornography.” According to the Report, law enforcement officials have said Liberty Reserve “traded in virtual currency and provided the kind of anonymous and easily accessible banking infrastructure increasingly sought by criminal networks.” The report states that, according to the indictment, Liberty Reserve used “a complicated system designed to allow people to move sums large and small around the world with virtual anonymity.”

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