‘Big bitcoin heist’ suspect escapes prison and flees Iceland ‘on PM’s plane’

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Sindri Thor Stefansson escaped through window before reportedly boarding same flight to Sweden as prime minister Katrn Jakobsdttir

The suspected mastermind behind the theft of 600 computers used to mine bitcoin in Iceland has escaped from prison and fled to Sweden on an aeroplane reportedly carrying the Icelandic prime minister.

Sindri Thor Stefansson escaped through a window of the low-security Sogn prison in rural southern Iceland before boarding a flight to Sweden at the international airport in Keflavik located 59 miles from the prison on Tuesday. Police said he travelled under a passport in someone elses name, but was identified via surveillance video.

He had an accomplice, police chief Gunnar Schram told local news outlet Visir. We are sure of that.

Guards at the prison, which has no fences and where inmates have access to the internet and phones, did not report him missing until after the flight to Sweden had taken off. Stefansson had been in custody since February, but was moved to the low-security prison 11 days ago.

An international warrant has since been issued for his arrest, but Swedish police spokesman Stefan Dangardt said no arrest has been made in Sweden.

The plane that Stefansson took was reported to have been carrying the Icelandic prime minister, Katrn Jakobsdttir, to a meeting with Indias prime minister in Stockholm on Tuesday.

The
The plane that Stefansson took was reported to have been carrying the Icelandic prime minister, Katrn Jakobsdttir, to a meeting with Indias prime minister in Stockholm on Tuesday. Photograph: Claudio Bresciani/EPA

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The prison break is yet another twist in a criminal case without parallel on the peaceful island nation with a population of 340,000 and one of the worlds lowest crime rates.

Dubbed by local media as the big bitcoin heist, Stefansson was among 11 people arrested for allegedly stealing the cryptocurrency mining equipment in what is thought to be Icelands biggest theft. The computers, which were stolen in four thefts and have yet to be found, have been valued at 200m kronur (1.45m), described as a grand theft on a scale unseen before by Icelandic police commissioner Olafur Helgi Kjartansson.

Police have arrested 22 people altogether, including a security guard, without solving the burglaries.

Helgi Gunnlaugsson, a sociology professor at the University of Iceland, said keeping a high-profile prisoner in such low-security surroundings was unusual but more so was his organised escape.

Prison breaks in Iceland usually mean someone just fled to get drunk, he said. The underworlds are tiny and it is extremely difficult to hide, let alone flee the country.

Iceland has become a hotspot of for data centres and cryptocurrency mining thanks to its abundance of renewable energy and cold climate, which provides low electricity prices and lower cooling costs for the high-powered computer equipment. The low costs have made it easier for cryptocurrency miners to turn a profit, but have also led to the operators within Iceland consuming more electricity with their intensive computing endeavors than households.

Owners of the stolen computers have, in a rare public outreach, promised a $60,000 reward to anyone who can lead detectives to the stolen computers.

Read more: https://www.theguardian.com/technology/2018/apr/18/big-bitcoin-heist-suspect-sindri-thor-stefansson-escapes-prison-flees-iceland-pm-katrin-jakobsdottir-plane

The Criminal Underworld Is Dropping Bitcoin for Another Currency

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Bitcoin is losing its luster with some of its earliest and most avid fans — criminals — giving rise to a new breed of virtual currency.

Privacy coins such as monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin. A slew of analytic firms such as Chainalysis are getting better at flagging digital hoards linked to crime or money laundering, alerting exchanges and preventing conversion into traditional cash.

The European Union’s law-enforcement agency, Europol, raised alarms three months ago, writing in a report that “other cryptocurrencies such as monero, ethereum and Zcash are gaining popularity within the digital underground.” Online extortionists, who use ransomware to lock victims’ computers until they fork over a payment, have begun demanding those currencies instead. On Dec. 18 hackers attacked up to 190,000 WordPress sites per hour to get them to produce monero, according to security company Wordfence.

For ransomware attacks, monero is now “one of the favorites, if not the favorite,” Matt Suiche, founder of Dubai-based security firm Comae Technologies, said in a phone interview.

Monero's Rally

Monero outperformed bitcoin in the final months of 2017

Source: Coinmarketcap.com

Note: Figures shows percentage change in price compared with Oct. 31

Monero quadrupled in value to $349 in the final two months of 2017, according to coinmarketcap.com, placing it among a number of upstart coins that rose faster than bitcoin, the world’s most valuable digital currency. Bitcoin roughly doubled in the same period, data compiled by Bloomberg show. Monero’s price has climbed another 7 percent so far this year, according to coinmarketcap.com.

Read more: Ripple’s surge makes it the second-biggest cryptocurrency

In monero’s case, criminals are snapping it up because bitcoin’s underlying technology can work against them. Called blockchain, the digital ledger meticulously records which addresses send and receive transactions, including the exact time and amount — great data to use as evidence. Match an address to a crime and then watch the bitcoin universe carefully, and you can see the funds disappear and reappear in other locations.

Sleuths have developed databases and techniques for digesting that information to eventually nab wrongdoers. Say, for example, a coffee shop in Berkeley is known to have a certain bitcoin address, and a wallet used by an extortionist transfers the same amount there every morning at 9 a.m. Police can stop by and make an arrest.

Started in 2014, monero is very different. It encrypts the recipient’s address on its blockchain and generates fake addresses to obscure the real sender. It also obscures the amount of the transaction.

The techniques are so potent that software that flags coins suspected of being obtained through crime now tags just about anything converted into or out of monero as high risk, according to Pawel Kuskowski, chief executive officer of Coinfirm, which helps exchanges and other companies avoid tainted money. That compares with only about 10 percent of bitcoin, he said.

“What we treat ‘high risk’ is something that’s anonymizing funds,” he said in a phone interview. “How are you going to prove that these funds are not coming from illegal sources?”

Read a QuickTake: All about bitcoin, blockchain and their crypto world

Monero is one of many privacy-focused coins, each offering different security features. Its main competitor, Zcash — which isn’t known to have a significant criminal following — can offer even better privacy protection. Instead of creating fake addresses to hide senders, it encrypts their true address. That makes it impossible to identify senders by looking for correlations in addresses used in multiple transactions to pinpoint the real one — a vulnerability for monero. Developers of the coin have made progress in reducing it, though.

Still, Princeton University researchers recently developed a tool that helps them analyze Zcash transactions at least to some extent — but they haven’t been able to crack monero. And Zcash high-security features can’t be used on disposable burner phones, a favorite of criminals eager to stay anonymous.

Developers behind monero say they simply created a coin that protects privacy. Most people use it legitimately — they just don’t want others to know whether they’re buying a coffee or a car, Riccardo Spagni, core developer at monero, said in a phone interview.

“As a community, we certainly don’t advocate for monero’s use by criminals,” Spagni said. “At the same time if you have a decentralized currency, it’s not like you can prevent someone from using it. I imagine that monero provides massive advantages for criminals over bitcoin, so they would use monero.”

‘Utility’ Too

Yet criminals are probably only a fraction of monero’s users, according to Lucas Nuzzi, a senior analyst at Digital Asset Research, which provides research to institutional investors.

“As with any disruptive technology, many of the initial use cases revolve around illicit activities,” he wrote in an email. But as everyday people grow concerned about privacy and surveillance, “there is utility in these currencies that go beyond just a means of exchange for illicit goods.”

For related news and information:
Bitcoin price graph: XBT Curncy GP
Cryptocurrency monitor: VCCY

For more on cryptocurrencies, check out the  podcast: 

    Read more: http://www.bloomberg.com/news/articles/2018-01-02/criminal-underworld-is-dropping-bitcoin-for-another-currency

    Bitcoin: UK and EU plan crackdown amid crime and tax evasion fears

    Cryptocurrency close to record high despite news Treasury plans to end traders anonymity

    The UK and other EU governments are planning a crackdown on bitcoin amid growing concerns that the digital currency is being used for money laundering and tax evasion.

    The Treasury plans to regulate bitcoin and other cryptocurrencies to bring them in line with anti-money laundering and counter-terrorism financial legislation. Traders will be forced to disclose their identities, ending the anonymity that has made the currency attractive for drug dealing and other illegal activities.

    Under the EU-wide plan, online platforms where bitcoins are traded will be required to carry out due diligence on customers and report suspicious transactions. The UK government is negotiating amendments to the anti-money-laundering directive to ensure firms activities are overseen by national authorities.

    The Treasury said: We are working to address concerns about the use of cryptocurrencies by negotiating to bring virtual currency exchange platforms and some wallet providers within anti-money laundering and counter-terrorist financing regulation.

    Q&A

    What is bitcoin and is it a bad investment?

    Bitcoin is the first, and the biggest, “cryptocurrency” a decentralised tradable digital asset. Whether it’s a bad investment is the $97bn question (literally, since that’s the current value of all bitcoins in existence). Bitcoin can only be used as a medium of exchange and in practice has been far more important for the dark economy than it has for most legitimate uses. The lack of any central authority makes bitcoin remarkably resilient to censorship, corruption or regulation. That means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it’s hard (but not impossible) to trace a bitcoin transaction back to a physical person.

    The rules are expected to come into effect in the next few months. The Treasury said digital currencies could be used to enable and facilitate cybercrime. It added: There is little current evidence of them being used to launder money, though this risk is expected to grow.

    The bosses of Goldman Sachs and JP Morgan have criticised bitcoin as a vehicle to commit fraud and other crimes. But Sir Jon Cunliffe, a deputy governor of the Bank of England, last week said the digital currency was too small to pose a systemic threat to the global economy. He also cautioned that bitcoin investors needed to do their homework.

    Bitcoin was trading at $11,566 on Monday. It hit a fresh record high of $11,800 on Sunday but fell to $10,554 on news of the regulatory crackdown.

    zerohedge (@zerohedge)

    Reason For Bitcoin Sudden Plunge Revealed: UK Plans Regulatory Crackdown On Cryptocurrencies https://t.co/xIxdg6aUkU

    December 3, 2017

    The Labour MP John Mann, a member of the House of Commons Treasury select committee, suggested MPs would look into the regulation of virtual currencies.

    He told the Daily Telegraph: These new forms of exchange are expanding rapidly and weve got to make sure we dont get left behind thats particularly important in terms of money laundering, terrorism or pure theft.

    It would be timely to have a proper look at what this means. It may be that we want speed up our use of these kinds of thing in this country, but that makes it all the more important that we dont have a regulatory lag.

    Stephen Barclay, the economic secretary to the Treasury, set out the governments plans in a written parliamentary answer in October. The UK government is currently negotiating amendments to the anti-money-laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation, which will result in these firms activities being overseen by national competent authorities for these areas.

    The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017 or early 2018.

    Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here.

    Read more: https://www.theguardian.com/technology/2017/dec/04/bitcoin-uk-eu-plan-cryptocurrency-price-traders-anonymity