Posts Tagged ‘hacking’

Bitcoin Tumbles Most in Two Weeks Amid South Korea Exchange Hack

June 10, 2018

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Bitcoin extended losses for a third day, tumbling as much as 6 percent Sunday as South Korean cryptocurrency exchange Coinrail said there was a “cyber intrusion” in its system.

The largest cryptocurrency declined 5.1 percent to $7,242 as of 5:28pm Hong Kong time, the biggest drop since May 23, according to data compiled by Bloomberg from Bitstamp pricing. That widens Bitcoin’s losses for the year to 48 percent. Peer cryptocurrencies Ethereum and Ripple fell at least 6.2 percent.

Coinrail said in a statement on its website that it’s reviewing its system due to hacking attempts. The exchange says it has managed to freeze all exposed NPXS, NPER and ATX coins, and that other cryptocurrencies are now being kept in a cold wallet. The statement is the only content available on the exchange’s homepage, and contact information could not immediately be located.

The exchange trades more than 50 different cryptocurrencies and was the 98th largest, with a 24-hour volume of about $2.65 million, according to data from

— With assistance by Sharon Cho



Report: China hacked sensitive US Navy data

June 9, 2018

China’s government hacked 614 gigabytes of data from the US Navy, according to a Washington Post report. The relevations come as a former CIA officer was convicted for sharing information with China in exchange for cash.

US-Flugzeugträger USS Carl Vinson auf Südchinesischem Meer (Getty Images/AFP/L. Pham)

Chinese government hackers stole a large amount of sensitive data from a US Navy contractor, including plans to develop a new type of submarine-launched anti-ship missile, the Washington Postreported on Friday.

The hackers targeted a contractor who works for the Naval Undersea Warfare Center, a military entity based in Newport, Rhode Island, the unnamed officials said without identifying the contractor, according to the Post.

Read more: Donald Trump’s EU trade dilemma: United against China or alone against the world?

The hacked data comprised 614 gigabytes containing information about a project known as Sea Dragon, as well as signals and sensor data, submarine radio room information relating to cryptographic systems and the Navy submarine development unit’s electronic warfare library, the newspaper reported.

The hacking occurred in January and February, the officials told the Post, speaking on condition of anonymity about an ongoing investigation that is being led by the Navy with assistance from the Federal Bureau of Investigation.

“Per federal regulations, there are measures in place that require companies to notify the government when a ‘cyber incident’ has occurred that has actual or potential adverse beffects on their networks that contain controlled unclassified information. It would be inappropriate to discuss further details at this time,” the US Navy said in response to questions from Reuters.

The Post said it had agreed to withhold some details about the missile project after the Navy said their release could potentially harm national security.

Read more: Opinion: Is Germany courting China and abandoning the US?

The revelation of the hack comes as tensions between Beijing and Washington continue to rise over a range of issues including trade and military matters.

Last month the Pentagon withdrew China’s invitation to join maritime exercises in the Pacific because of Beijing’s “continued militarization” of the South China Sea.

Former CIA officer convicted

Also on Friday, a former CIA officer was convicted on espionage charges for providing China with top secret information in exchange for $25,000 (€21,200), the US Justice Department said.

Kevin Mallory was charged under the Espionage Act last in 2017 after he was discovered with more than $16,000 in undeclared cash on a return flight from Shanghai.

A federal jury in Virginia found Mallory, 61, guilty of delivering defense information to aid a foreign government and other charges. He will face a maximum penalty of life in prison when he is sentenced on September 21, the department said in a statement.

Read more: From the world’s workshop to the world’s tech hub: China’s economic leap forward

Officials found four documents, including three containing classified information, on a Samsung Galaxy smartphone that Mallory was given for secret communications by Michael Yang, a man Mallory met when he went to Shanghai in March and April 2017, according to court documents.

Mallory told the FBI in a voluntary interview that Yang worked for the People’s Republic of China Intelligence Service, the statement said.

One of the documents on the phone “contained unique identifiers for human sources who had helped the US government,” it said.

Federal prosecutors said mallory’s actions were far from isolated as China tries to gather classified US information.

“The People’s Republic of China has made a sophisticated and concerted effort to steal our nation’s secrets,” Assistant Attorney General Demers said. “Today’s conviction demonstrates that we remain vigilant against this threat and hold accountable all those who put the United States at risk through espionage,” he added.

law/bw (AFP, AP, Reuters)


Trump’s lack of cyber leader may make U.S. vulnerable

June 5, 2018

Experts and lawmakers worry the nation is rudderless on the vital issue of cybersecurity.

The absence of senior cybersecurity leaders in President Donald Trump’s administration may be leaving the United States more vulnerable to digital warfare and less prepared for attacks on election systems, according to lawmakers and experts worried about White House brain drain under national security adviser John Bolton.

Both Republicans and Democrats are expressing concern that the White House is rudderless on cybersecurity at a time when hostile nations’ hackers are moving aggressively, inspiring fears about disruptive attacks on local governments, power plants, hospitals and other critical systems.

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POLITICO spoke with nearly two dozen cyber experts, lawmakers and former officials from the White House, the intelligence community and the departments of Justice, Homeland Security, Defense and State about Bolton’s decisions to oust the White House’s homeland security adviser and eliminate its cyber coordinator position. The overwhelming consensus is that Bolton’s moves are a major step backward for the increasingly critical and still-evolving world of cyber policy.

The widely respected cyber policy expert Tom Bossert, Trump’s former homeland security adviser, resigned in April just after Bolton joined Trump’s White House staff. Late last week, Trump named Doug Fears, a former Coast Guard Atlantic region chief of staff, as his new homeland security adviser, but while several sources praised Fears’ handling of disaster response issues, they noted that he is not a cybersecurity expert.

On May 15, Bolton eliminated the post of White House cybersecurity coordinator following the departure of Rob Joyce, who had held the job since shortly after Trump’s inauguration. Bolton’s staff has said cutting the cyber position would “streamline” decision-making in the National Security Council by reducing a layer of management. But other people familiar with the post say it’s setting up the U.S. for problems.

The leadership void erodes “confidence [that] we’re going to be ready, when we get hit by a cyber incident, to react with anything approaching swiftness and decisiveness,” said Chris Painter, who was the State Department’s top cyber diplomat from 2011 to 2017 — a post that former Secretary Rex Tillerson also eliminated early in Trump’s presidency. Painter said he worries about this indecisiveness “being detected by our adversaries.”

Michael Daniel, former President Barack Obama’s cyber coordinator, said the gap in the White House “represents a significant weakness.” And Greg Garcia, DHS’s first assistant secretary for cybersecurity during the George W. Bush administration, said everything that had been moving forward in the federal government regarding cybersecurity is “going to suffer a bit without some central coordination authority.”

As for Fears, said Daniel, “I don’t think that his appointment fundamentally addresses the void in White House leadership on cybersecurity matters . … That’s not his area of expertise, so this Administration still has a problem in that regard.”

Last week, nearly two dozen Senate Democrats sent a letter to Bolton calling the elimination of the cyber coordinator “a step in the wrong direction.” On May 16, the day after the National Security Council announced Bolton’s decision, eight House Democrats implored Trump to name a coordinator who could serve as “a visible figurehead that other government agencies, the private sector, and our allies can turn to for guidance.”

And on May 24, Maine Sen. Susan Collins became the first Republican lawmaker to voice concerns, urging the White House to publish a cyber strategy and saying a coordinator would be vital to its implementation.

Sen. Mike Rounds (R-S.D.), who chairs the Armed Services cyber subcommittee, recently requested a meeting with Bolton to discuss the situation.

“A lot of us are concerned that cyber leadership is missing,” said Rep. Bennie Thompson (D-Miss.), the top Democrat on the Homeland Security Committee. “It’s difficult to execute a mission with no one at the top.”

The White House and its allies defended the moves, saying they didn’t imply any lack of focus on cybersecurity. The Trump administration has taken public steps on cyber issues since Bossert and Joyce’s departures, issuing two alerts from the FBI and DHS about Russian and North Korean hacking.

“Cybersecurity is one of Ambassador Bolton’s highest priorities,” an NSC spokesman told POLITICO, adding that the administration “is focused on addressing the nation’s many cybersecurity challenges, not in laboring beneath layers of unnecessary and time consuming bureaucracy.”

Panic over the restructuring in the NSC is premature, said Rep. John Ratcliffe (R-Texas), chairman of the House Homeland Security cyber subcommittee. “How do we know that the organization chart isn’t going to be restructured and they’re going to create a new, different position that they feel is better suited to address cybersecurity as a priority?”

Fears, the new homeland security adviser, “clearly has a steep learning curve on cybersecurity issues,” said Ari Schwartz, a former top White House cyber official. But Schwartz and others said Fears was competent and well-respected, which would serve him well in coordinating agency discussions.

Still, said Jay Healey, a cyber conflict scholar at Columbia University, “unless Doug Fears insists on reestablishing a senior role for cybersecurity, he will be using [his] disaster recovery experience to deal with one cyber crisis after another.”

Jeanette Manfra, the DHS assistant secretary for cybersecurity and communications, downplayed the negative consequences of eliminating the coordinator role. Speaking at a recent conference, she said agencies were ready for “a different type of governance” in which they made more policy decisions themselves.

Still, worries about the gaps in the White House’s cyber leadership have seeped into the private sector.

One former congressional staffer recalled meeting with a senior financial services executive when Bossert’s resignation became public. “He was despondent,” said the former staffer, who requested anonymity to discuss a private meeting. The executive, who “kept shaking his head,” told the staffer that the financial sector had “essentially written [the White House] out” of its incident response plan “because there was ‘nobody to work with.’”

Security researchers, on whom the government often depends for insights into evolving threats, were also frustrated. “The elimination of the [coordinator] position after [Joyce’s] departure confirms my worst fears — the administration is absolutely unwilling to listen to cybersecurity experts,” said former NSA hacker Jake Williams, the founder of the security firm Rendition InfoSec.

Since the Obama administration created the White House cyber coordinator role in 2009, the position has been key in resolving conflicts among agencies, preparing Cabinet leaders to make major policy decisions and responding to crises, according to cyber experts and former government officials who spoke to POLITICO.

Those experts conceded that agencies’ day-to-day operations will proceed normally — including the bulk of DHS’s work on election security and protection of critical infrastructure such as banks and the electric grid, and the Pentagon’s various operations in cyberspace.

But they said it will likely become increasingly difficult to bring agencies together to formulate big-picture strategies, such as how best to use America’s potent cyber capabilities — the intelligence community and the military often spar over this issue — how to more effectively deter adversaries like Russia from launching cyberattacks, and how to improve existing efforts like DHS’s security partnerships with states. Other debates requiring input from multiple agencies, such as how hard the government should press tech companies to use warrant-compatible encryption, will also stall, they said.

“If you don’t have those individuals really pounding the table … to drive that policy process,” said Lisa Monaco, Obama’s second homeland security adviser, “you’re not going to get those options surfaced, teed up, and decisions made.”

Michael Bahar, a former Democratic staff director on the House Intelligence Committee and top lawyer at the NSC, stressed that the coordinator’s role is far from trivial, especially in forming and executing an “an all-of-government strategy” across various agencies. “Because the bad guys or adversaries are certainly not waiting around for us to restructure,” he said.

The White House maintains that government-wide discussions on cyber have not suffered.

“With the existing structure, the administration continues to hold malicious cyber actors accountable, modernize federal networks, plan for tomorrow’s cyber-workforce and promote cybersecurity to both the public and industry,” said the NSC spokesman.

But recent events have bolstered experts’ concerns that an NSC devoid of top cyber officials might have trouble resolving agency disagreements about the language of key reports or major executive orders. Already, White House turmoil delayed by three weeks the publication of key strategy documents that Trump asked agencies to put together in a May 2017 executive order. Several of those reports finally appeared last week, but without any accompanying message from the White House explaining how it would use the documents to develop new policies.

“It is hard to imagine the indefinite postponement of a marquee event such as that would have happened if Bossert/Joyce were still at the [White House],” said a tech industry lobbyist familiar with internal administration dynamics, who requested anonymity to speak candidly.

Daniel, the former Obama cyber coordinator, also feared that the gaps will cause “operational impacts” if one agency wants to launch a campaign — like a botnet takedown, a series of arrests or a military strike — that will affect the priorities and interests of other agencies.

“Those may not be getting resolved very quickly,” he said, “and so operations may have to be put on hold.”

But on the other hand, some experts worry that agencies will begin acting more boldly on their own if they see delays and gridlock in the NSC process. That “increases the risk that consequential [agency] decisions fly under the NSC’s radar, thus increasing the risk that the White House becomes blindsided by decisions made without its full awareness and input,” said DJ Rosenthal, a former Justice Department and intelligence community official who served as director for counterterrorism at the NSC.

The lack of a cybersecurity coordinator may become especially acute in a crisis. For instance, Monaco pointed to Daniel’s role in leading the response to the massive hack of the Office of Personnel Management that came to light in 2015, which exposed highly sensitive security clearance documents on more than 20 million current and former federal employees and applicants. That break-in was widely believed to be the work of Chinese hackers.

“Those discussions had to come together, at the first instance, [through] the cyber coordinator, and then ultimately to [Cabinet secretaries],” Monaco said. “But you needed one person driving that.”

Monaco also praised Daniel for his handling of Heartbleed, a major security bug that required rapid evaluations of federal computer systems. In the current White House, she said, “who is the sole person responsible for [ensuring] that agencies across the federal government are making sure that they are not vulnerable to those types of … legacy vulnerability?”

Experts also worry that the lack of a coordinator will complicate the administration’s efforts to protect elections.

DHS has been “leaning forward” in its day-to-day consultations with states to prepare for this year’s midterm elections, said Frank Cilluffo, director of the George Washington University Center for Cyber and Homeland Security, but he said the government lacks a more strategic approach. “Disinformation, active measures — that’s more than just a DHS mission,” he said. “That’s an FBI mission. That can be an intelligence mission overseas.”

White House officials must knit all those efforts together, he said.

Jeh Johnson, Obama’s second homeland security secretary, said the government needs “senior people leading the cybersecurity charge. … At the White House level, there appears to be no one running traffic control.”

The lack of a cyber coordinator will also hamper the administration’s efforts to promote international norms and build alliances on digital security issues, said Painter, who played a key role in getting the G-20 to formally disavow cyber-enabled intellectual property theft. That “never would have gotten done” without the involvement of senior White House officials, he said.

The same was true of a 2015 deal in which China and the U.S. both agreed not to hack each other’s computer systems for economic gain. “That was about two years of consistent pressure not just by me but by the highest levels of our government,” he said.

And White House officials have been key to resolving debates between the military and the intelligence community on how and when to use their increasingly powerful cyber tools, the experts said. The Pentagon often wants to loudly and publicly disrupt enemy networks, while the spies would prefer to keep their capabilities secret and use them for intelligence collection.

Developing national strategies to deter nation-states or criminal hackers from carrying out cyberattacks in the first place also requires White House coordination. In addition, the coordinator and homeland security adviser have been key to promoting the White House’s broad cybersecurity agenda to the public, through interviews and at industry conferences.

Several experts made the analogy to the corporate world: If boards of directors are focused cybersecurity, C-suite executives have to focus on it, which means mid-level managers have to focus on it, too.

“That’s how you create a culture of cybersecurity,” said Bahar, the former NSC and House Intelligence staffer. “If you don’t have it at the board level, or the equivalent in government, then you risk not having cyber receive sufficient attention that it needs.”

Martin Matishak contributed to this report.

U.S. warns again on hacks it blames on North Korea

May 30, 2018

The U.S. government on Tuesday released an alert with technical details about a series of cyber attacks stretching back to at least 2009 that it blamed on the North Korean government.

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The warning is the third from the Department of Homeland Security and the Federal Bureau of Investigation about hacking operations dubbed “Hidden Cobra” that the United States charges were launched by Pyongyang.

A representative with Pyongyang’s mission to the United Nations declined comment. North Korea has routinely denied involvement in cyber attacks against other countries.

The report was published as U.S. and North Korean negotiators work to resuscitate plans for a possible June 12 summit between leaders of the two nations. The FBI and DHS released reports in June and November of 2017, when relations were tense between Washington and Pyongyang due to North Korea’s missile tests.

A Department of Homeland Security official said the U.S. government is confident North Korea’s government is behind the cyber operations, which it says target the media, aerospace and financial sectors and critical infrastructure in the United States and around the globe.

“The United States takes attribution seriously and does not make this conclusion lightly,” the official said in an emailed statement.

Tuesday’s alert did not identify specific victims, though it cited a February 2016 report from several security firms that blamed the same group for a 2014 cyber attack on Sony Pictures Entertainment.

The alert provided a list of 87 IP addresses, four malicious files and two email addresses it said were associated with “Hidden Cobra.”

It described two pieces of malicious software: the self-spreading “worm” Brambul that attackers use to infect computers and malware known as Joanap, which gives hackers remote control of devices so they can steal data, install additional viruses and perform other tasks.

Hidden Cobra has used Brambul and Joanap for several years, making little change to the malware over that period, said Vikram Thakur, a senior researcher with cyber security firm Symantec Corp.

The alert could prompt the attackers to change tactics, Thakur said. “Such activity normally forces attacker groups to expend considerable resources to develop and move away from publicly known malware behavior.

Reporting by Jim Finkle in Toronto; Additional reporting by Rodrigo Campos in New York; Editing by Leslie Adler and Chris Reese


Hacked Crypto Exchange Earned $490 Million Before Epic Heist — But good times may already be over

April 26, 2018

Coincheck made the money in 10 months before $500 million hack — Figures show how lucrative Bitcoin bubble was for bourses

Running a cryptocurrency exchange can be enormously profitable — so long as you don’t lose your clients’ assets to hackers.

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Japan-based Coincheck Inc., which suffered one of the biggest heists in history, earned 53.2 billion yen ($490 million) from April 2017 through January, when the theft occurred, according to its new owner Monex Group Inc. By comparison, Japan Exchange Group, which owns the Tokyo Stock Exchange and Osaka Exchange, earned 66.1 billion yen for all of 2017, according to data compiled by Bloomberg.

The figures illustrate how lucrative it’s been to operate a cryptocurrency venue in the past year, a period that saw prices and transaction values soar to all-time highs. Even after the theft, Coincheck made a profit of 500 million yen in February and March.

The good times may already be over, according to Coincheck’s new owner.

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Monex Chief Executive Officer Oki Matsumoto

“Given that we expect tougher regulatory and internal measures going forward, naturally the profitability will change,” Monex Chief Executive Officer Oki Matsumoto said at a media event on Thursday. “However, as our entire group works toward creating a crypto exchange built on trust, it may be possible to grow our customer base even more, which would drive synergy and boost profitability.”

Read more: The $500 million heist — a QuickTake about the Coincheck hack

Japanese retail brokerage Monex bought Coincheck earlier this month, paying 3.6 billion yen for the bourse under an agreement that will see it split profits with the previous shareholders for the next three years. Monex shares jumped by the daily limit of 20 percent after the announcement.

According to Coincheck’s account of the hack, an unidentified thief stole 523 million coins tied to the NEM blockchain project on Jan. 26, which were trading at about 94 U.S. cents at the time. The company said it would reimburse customers who lost money, which led to a writedown of 47.3 billion yen, according to Monex.


Trump taunts Democrats over Russia collusion lawsuit

April 22, 2018

Democratic Party files suit alleging Russia, the Trump campaign, WikiLeaks and others all in a conspiracy to help Trump win the 2016 election

April 20, 2018


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The Democratic Party on Friday sued President Donald Trump’s presidential campaign, the Russian government and the Wikileaks group, claiming a broad conspiracy to help Trump win the 2016 election.

The multi-million-dollar lawsuit filed in Manhattan federal court says that “In the Trump campaign, Russia found a willing and active partner in this effort” to mount “a brazen attack on American Democracy.”

The named defendants include Trump’s son Donald Trump Jr., his son-in-law Jared Kushner, former campaign chief Paul Manafort and campaign official Richard Gates, and Trump ally Roger Stone.

Also named is the Russian Federation, the general state of the Russian armed force, a Russian intelligence services hacker known as Guccifer 2.0., Wikileaks and its leader Julian Assange, and 10 unidentified people.

This story is developing. Please check back for updates.

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Here are the primary source documents.

Suing a foreign country presents a number of legal challenges for the Democrats, partly because other nations have immunity from most U.S. lawsuits.

Part of the thinking here may be to force the government to disclose evidence, via the legal discovery process.

From reporters Tom Hamburger, Rosalind S. Helderman and Ellen Nakashima in the Washington Post:

The complaint, filed in federal district court in Manhattan, alleges that top Trump campaign officials conspired with the Russian government and its military spy agency to hurt Democratic presidential nominee Hillary Clinton and help Trump by hacking the computer networks of the Democratic Party and disseminating stolen material found there.

“During the 2016 presidential campaign, Russia launched an all-out assault on our democracy, and it found a willing and active partner in Donald Trump’s campaign,” DNC Chairman Tom Perez said in a statement.

“This constituted an act of unprecedented treachery: the campaign of a nominee for President of the United States in league with a hostile foreign power to bolster its own chance to win the presidency,” he said.

The case asserts that the Russian hacking campaign — combined with Trump associates’ contacts with Russia and the campaign’s public cheerleading of the hacks — amounted to an illegal conspiracy to interfere in the election that caused serious damage to the Democratic Party.



“Document: DNC Sues Russia, Trump Campaign and WikiLeaks for Election Interference,” the latest from Matthew Kahn: 

Document: DNC Sues Russia, Trump Campaign and WikiLeaks for Election Interference

On Friday, the Democratic National Committee filed a lawsuit in the U.S. District Court for the Southern District of New York against the Russian government, the Trump campaign and associated…


[Silently hopes to self the DNC lawsuit will be more competently managed than the Fusion oppo research.]

[Oh did I say that out loud?]


Well that’s a hell of a caption. 


Should someone tell the DNC lawyers they forgot to plead that the DNC computers meet the 1030(e)(1) definition?

View image on Twitter

Reuters Politics


MORE: Lawsuit alleges Trump campaign and Russian agents agreed to promote Trump’s candidacy through illegal means 

Jennifer Epstein


DNC suit is against: Russian Federation, GRU, Guccifer 2.0,  Aras & Emin Agalarov, Joseph Mifsud, WikiLeaks, Julian Assange, Donald J. Trump for President, Donald Trump Jr., Paul Manafort, Roger Stone, Jared Kushner, George Papadopoulos, & Richard Gates 

DNC Sues Trump Campaign, WikiLeaks, Russia Over Election Interference

The Democratic National Committee sued Russia, the Trump campaign and WikiLeaks over interference in the 2016 election, saying Russia launched a “brazen attack on American democracy” that began with…

Will Donald Trump Meet Kim Jong Un and Start Meaningful Negotiations? The Odds Just Got Lower as John Bolton Heads to The White House

March 23, 2018

Peace and Freedom

Donald Trump’s new National Security Advisor is a hawk who plays hard ball. He has a history of claiming that North Korea will never give up its quest for nuclear weapons and will never negotiate in good faith.

This joke has been attributed to Bolton:

 “Question: How do you know that the North Korean regime is lying? Answer: Their lips are moving.”

See also:

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The return of John Bolton, a hawk on North Korea and Iran, sparks concerns



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(CNN) John Bolton said on Thursday that his past policy statements are “behind me” and that, after taking over next month as President Donald Trump’s national security adviser, “The important thing is what the President says and the advice I give him.”

But Bolton’s history of provocative, often bellicose pronouncements, typically in the form of calls to bomb countries like Iran and North Korea — along with his unwavering support, before and after, for the 2003 invasion of Iraq — are impossible to pass off, especially as Trump considers tearing up the Iran nuclear deal and prepares for talks with Pyongyang.
What follows is a small sampling of Bolton’s rhetoric, dating back to the post-9/11 period. Back then, while working in the Bush administration, Bolton made the case at home and abroad that Saddam Hussein possessed weapons of mass destruction and that the US role in the aftermath of regime change in Iraq would be “fairly minimal.” Trump, by the way, has pointed to his own opposition to the Iraq war as evidence of his smarts.
Bolton also publicly accused Cuba of providing “dual-use biotechnology to other rogue states.” Years later, after leaving his post as ambassador to the UN, he pushed to expand the Iraq War into Iran. More recently, he’s pushed for unilateral strikes in Iran and North Korea, while casting doubt on Russia’s role in 2016 election-related hacking.

He made the case last month for striking North Korea ‘first’

Citing preemptive strikes by Israel on Syrian (2007) and Iraqi (1981) reactor sites, Bolton in February of this year — less than four weeks ago — made a case in the Wall Street Journal for a potential US attack on North Korea:
“Pre-emption opponents argue that action is not justified because Pyongyang does not constitute an ‘imminent threat.’ They are wrong. The threat is imminent, and the case against pre-emption rests on the misinterpretation of a standard that derives from prenuclear, pre-ballistic-missile times. Given the gaps in U.S. intelligence about North Korea, we should not wait until the very last minute. That would risk striking after the North has deliverable nuclear weapons, a much more dangerous situation.”

He suggested election hacking was a ‘false flag operation’ designed to frame the Russians


In December 2016, Bolton said he wasn’t convinced the Russian had a role in pre-election hacking.
“It’s not at all clear to me just viewing this from the outside that this hacking into the DNC and the RNC computers was not a false flag operation. The question that has to be asked is, why did the Russians run their smart intelligence service against Hillary’s server but their dumb intelligence services against the election?”

He seems to have changed his mind; is now advocating heavy retaliation


In an opinion piece filed after special counsel Robert Mueller returned indictments alleging conspiracy to defraud the US against a group of Russian nationals, Bolton wrote:
“One way to (deter Russia) is to engage in a retaliatory cyber campaign against Russia. This effort should not be proportional to what we have just experienced. It should be decidedly disproportionate. The lesson we want Russia (or anyone else) to learn is that the costs to them from future cyberattacks against the United States will be so high that they will simply consign all their cyberwarfare plans to their computer memories to gather electronic dust.”

He said a diplomatic option for dealing with North Korea was to ‘end the regime’


Asked by a Fox News host if there were any “diplomatic options” remaining in the nuclear standoff with North Korea, Bolton suggested this:
Bolton: “I think the only diplomatic option left is to end the regime in North Korea by effectively having the South take it over. You’ve got to argue with China–“
Fox News host Trish Regan: “That’s not really diplomatic! (Laughing) As far as they’re concerned.”
Bolton: “Well, that’s their problem, not ours. Anybody who thinks that more diplomacy with North Korea, more sanctions, whether against North Korea, or an effort to apply sanctions against China, is just giving North Korea more time to increase its nuclear arsenal…”

He compared — to laughter and cheers — former President Barack Obama to a ‘Muslim king’


In a speech to the American Freedom Alliance conference in August 2016, Bolton drew applause when he said this of Obama at the beginning of a speech on Muslim countries and their politics:
“King Abdullah of Jordan, who is not simply the Muslim king of a Muslim country, unlike our president… (laughter and cheers) … King Abdullah and other political leaders in the Middle East have said this is a civil war within Islam.”

He desperately wants to scuttle the Iran nuclear deal


In Janaury of this year, again in the Wall Street Journal, he argued that the administration take more forceful steps to break the terms of the pact:
“Spending the next 120 days negotiating with ourselves will leave the West mired in stasis. Mr. Trump correctly sees Mr. Obama’s deal as a massive strategic blunder, but his advisers have inexplicably persuaded him not to withdraw. Last fall, deciding whether to reimpose sanctions and decertify the deal under the Corker-Cardin legislation, the administration also opted to keep the door open to ‘fixes’ — a punt on third down. Let’s hope Friday’s decision is not another punt.”
He also touched on a common theme in his writing, going back at least to former President George W. Bush’s “Axis of Evil” speech, that connects Iran and North Korea:
“Little is known, at least publicly, about longstanding Iranian-North Korean cooperation on nuclear and ballistic-missile technology. It is foolish to play down Tehran’s threat because of Pyongyang’s provocations. They are two sides of the same coin.”

He took — and seems to take — the ‘Axis of Evil’ line literally


Rewind to August 2002 and remarks made during talks between the North and South Koreans, when Bolton defended the expression and insisted “it was factually correct.” This is from the New York Times report:
“In a strongly worded speech, the official, John R. Bolton, the under secretary of state for arms control, cited what he said was ‘a hard connection between these regimes — an “axis” along which flow dangerous weapons and dangerous technology.'”

He argued in favor of Brexit, touting the UK’s strong negotiating hand


Ahead of the Brexit vote in 2016, Bolton wrote in the New York Daily News that the UK would enter potential EU exit negotiations with the upper hand. (Things have been somewhat more difficult than he figured.):
“EU stalwarts like German Minister of Finance Wolfgang Schäuble have tried to scare Britain by proposing obnoxious exit terms. The rhetoric is hollow bluster. The advantages of free trade and easy movement of goods and financial resources between Europe and Britain, whether or not the latter remains part of the former, will dictate that Britain and the EU negotiate Brexit terms that are mutually advantageous. … There is an inherent economic risk in abandoning arrangements and institutions built up over time. But in the sweep of European history, the EU is a newcomer. It makes sense for Britain exit now rather than wait until disaster strikes.”

Before the deal was done, he wrote an op-ed calling on the US to bomb Iran


Shortly before the framework of the Iran nuclear deal was set in place, Bolton wrote a piece headlined, “To Stop Iran’s Bomb, Bomb Iran.” He even considered outsourcing the job to Israel:
“Time is terribly short, but a strike can still succeed. … An attack need not destroy all of Iran’s nuclear infrastructure, but by breaking key links in the nuclear-fuel cycle, it could set back its program by three to five years. The United States could do a thorough job of destruction, but Israel alone can do what’s necessary. Such action should be combined with vigorous American support for Iran’s opposition, aimed at regime change in Tehran.”

He (still) believes leaving Iraq was a worse decision than invading it


Bolton became Bush’s under secretary of state for arms control and international security in May of 2001 and remained in the job for about four years, during which time the US invaded Iraq under false pretenses, before taking over as ambassador the United Nations via recess appointment. Asked in 2015 about the decision to go to war, here’s what he told the Washington Examiner:
“I still think the decision to overthrow Saddam was correct. I think decisions made after that decision were wrong, although I think the worst decision made after that was the 2011 decision to withdraw U.S. and coalition forces. The people who say, oh things would have been much better if you didn’t overthrow Saddam miss the point that today’s Middle East does not flow totally and unchangeably from the decision to overthrow Saddam alone.”

He wanted to bomb Iran during the Iraq war


In 2008, Bolton called for strikes inside Iran as part of a bid to cut off Tehran’s aid to insurgents in Iraq. Asked by a Fox News host what he thought would “happen next” if the US attacked, he downplayed the potential for widening the war:
“I think the Iranians need to look very carefully at what risk they would run if they were to escalate. The idea here is not to have much larger hostilities, but to stop the Iranians from engaging in the hostilities that they’re already doing against us inside Iraq. And they’re doing much the same by aiding the Taliban in Afghanistan. So this is not provocative or preemptive, this is entirely responsive on our part.”

He downplayed the short- and long-term dangers of war in Iraq


In the run-up to the Iraq invasion he made the case for regime change to the BBC. Here’s one of his arguments in favor:
“I think the Iraqi people would be unique in history if they didn’t welcome the overthrow of this dictatorial regime. And Iraqi opposition leaders of a variety of positions and views are discussing now what will happen after Saddam Hussein. I expect that the American role actually will be fairly minimal. I think we’ll have an important security role. I think concluding the destruction of the weapons of mass destruction themselves will be important. But I think fundamentally the recreation of a hopefully democratic Iraqi government — that must rest with the Iraqis.”
See also:
The return of John Bolton, a hawk on North Korea and Iran, sparks concerns

Hacked Japanese Cryptocurrency Exchange Pays Back Customers — Coincheck spends $435 million to compensate customers

March 13, 2018

Coincheck spends $435 million to compensate customers who kept a digital currency called NEM at Coincheck

Coincheck resumed accepting withdrawals of selected cryptocurrencies including bitcoin on Monday. Here, Koichiro Wada, president of the exchange.
Coincheck resumed accepting withdrawals of selected cryptocurrencies including bitcoin on Monday. Here, Koichiro Wada, president of the exchange. PHOTO: FRANCK ROBICHON/EPA-EFE/REX/SHUT/EPA/SHUTTERSTOCK

TOKYO—Coincheck Inc., a Japanese cryptocurrency trading platform operator that was hacked in January, said Tuesday that it has completed compensating customers affected by the hacking and resumed some exchange services.

Coincheck, based in Tokyo, spent ¥46.3 billion ($435 million) to compensate 260,000 customers who had kept a digital currency called NEM at Coincheck. The exchange said 523 million units of NEM were stolen in a cyberattack in January.

TOKYO: Japanese cryptocurrency exchange Coincheck Inc, reeling from government reprimands over lax standards after $530 million dollar theft of digital money, said it would from Monday start repaying customers affected by the heist.

The customers received refunds in yen at a rate of 88.549 yen per NEM, in line with earlier promises by Coincheck. That is higher than the current market rate but lower than the ¥110 value at the time of the hacking.

A Coincheck spokeswoman said the payment in yen to the former NEM holders was begun and finished on Monday. She said the company used its own funds for the payment.

The company also resumed accepting withdrawals of selected cryptocurrencies including bitcoin on Monday. It had halted the service after the hacking, saying it wanted to make sure the system was secure. The company hasn’t resumed accepting deposits.

Some Coincheck customers expressed relief on Twitter and other social media and said they would use the refunded yen to buy cryptocurrencies again.

Still, experts warn that cryptocurrencies and the exchanges dealing in them remain vulnerable to cyberattacks. Japanese authorities are investigating the hacking at Coincheck, but they haven’t reported significant progress in identifying the hackers. Many cryptocurrencies were designed to provide a high level of anonymity to their owners.

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Coincheck said it couldn’t comment on the investigation.

The company, which has described itself as Japan’s largest bitcoin exchange, has said it hopes to stay in business, but it hasn’t acquired a license from the Japanese government. The nation’s financial watchdog has told the company twice to improve its governance and controls.

Coincheck executives have said they would like the company to remain independent but wouldn’t rule out a buyout if that is the best way to survive.

Write to Takashi Mochizuki at

Russia’s conflict-laden foreign policy

March 12, 2018

Russian foreign policy has hardened under President Vladimir Putin. Although Russia is looking for cooperation, it is not afraid of confrontation, which has often led to difficult foreign relations. DW has the lowdown.

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United States

Russia has an ambivalent relationship to the US. During the US presidential elections in the fall of 2016, Russia apparently tried subtly to influence public opinion to benefit the future president Donald Trump. At least, that is the gist of special investigator Robert Mueller’s work to date.

But since Trump’s inauguration, the relationship between the two heads of state has been strained. At the beginning of March, Putin announced in his speech on the state of the nation that he wanted to turn new, and what he described as impossible to attack, nuclear missiles against the West.

This was also a reaction to the US’ withdrawal from the treaty with Russia on missile defense in 2002. In any case, the US did not seem surprised by this move. Trump announced the construction of new nuclear missiles with reduced explosive force. Political scientist Susanne Spahn told DW that she suspects it is important to Putin to strengthen his country’s position of power specifically in relation to the US.

“The main enemy is the United States. Putin has used very threatening rhetoric towards the West along the lines of, ‘in the past you did not want to listen to us, then at least listen to us now’.”

Middle East

Russia’s ambition to become an international political heavyweight again is most evident in the Middle East. Russia strongly supports the Syrian President Bashar al-Assad, who is at war with sections of his own population. Russia has set up a substantial military contingent to protect Assad and his established political order.

Read moreWhat foreign powers want from the war in Syria

There are several reasons for Moscow’s involvement: Firstly, it is about having a military foothold in the Mediterranean region. Above all, however, Russia has become an actor in the region that no one can avoid. Together with Assad’s other key ally, Iran, Russia now has considerable influence in the region between Iran and Israel.

Russia’s authority holds significantly more weight than at the beginning of the Syrian war, in Iraq, Syria and in areas of Lebanon controlled by Iran-backed Hezbollah. Russian authority also counts in Turkey, which intervened in northern Syria in January. The US had largely withdrawn from the Middle East under the Obama administration. They left behind a gap that Russia is increasingly filling.

Central and Eastern Europe

Russia has rather difficult relations with the former satellite states of the Soviet Union. Lithuania has barely had any political contact with Russia since the Ukraine crisis. Around 65 percent of Lithuanians regard Russia as an “unfriendly” neighbor, while around 18 percent do not rule out the possibility that Russia could invade their country. This has made them all the happier about the 1,000 NATO soldiers who have been deployed to Lithuania.

Lithuania has also distanced itself economically. For a long time, the Baltic country was heavily dependent on Russian energy exports. It has systematically reduced this dependence.

Russian relations with Poland are also at a low point. Jaroslaw Kaczynski, whose role as chairman of the right-wing conservative ruling PiS party makes him a kind of eminence grise of Polish politics, is a staunch anti-communist. He has also distanced himself from Putin’s Russia. For example, he is a strong supporter of the EU’s sanctions against Poland’s neighbor to the east. Neither country has any discernible interest in rapprochement.

On the other hand, Russia enjoys good relations with Serbia, which is in large part due to the good personal relationship between Putin and Serbian President Aleksandar Vucic. Serbia also gets a substantial part of its arms and energy imports from Russia.


Russia has had a difficult relationship with Germany since the outbreak of the Ukraine crisis. Germany supports the EU’s decision to impose trade sanctions on Russia, despite the fact that German firms have suffered heavily as a result; around 40 percent of trade losses affect Germany.

Nevertheless, Germany is maintaining its critical stance on the annexation of Crimea and the conflict in Ukraine, SPD foreign policymaker Rolf Mützenich told DW. The breach of international law in Crimea is unacceptable, he said. However, he explained that the relationship with Ukraine and Russia generally remains a focal point of German foreign policy. “We must not put ourselves at the mercy of domestic political actors in either country,” said Mützenich.

Russia’s President Putin has an unclear relationship with Germany. On the one hand, Moscow maintains a close dialogue with Berlin. On the other hand, Putin questioned Germany’s sovereignty in June 2017. “There are not that many countries in the world that enjoy the privilege of having sovereignty. I don’t want to offend anyone, but what Mrs. Merkel said [in a previous speech – Ed] is an expression of the resentment of a limited authority that has accumulated over a long period of time.” The relationship is also strained by alleged Russian hacker attacks on German government computers.


Since relations with the EU have cooled as a result of the Ukraine crisis, Russia has increasingly turned its attention to China. Both countries want to expand their trade relations. Russia also wants to participate in the expansion of the “New Silk Road” — the dynamism of this primarily Chinese-European trade route should also benefit the Russian economy.

Read moreAre China and Russia challenging US military dominance?

In political terms, both states maintain a similar style, in particular, authoritarian dealings with critics and opponents within the country and a robust representation of their own interests to the outside world. Both states have repeatedly spoken out against Syria’s condemnation in the UN Security Council. They argue that interference in the country’s internal affairs is not admissible.

The two states have also come closer to each other militarily. They conducted several joint maneuvers — not only in central Asia, but also in the East China Sea. As a result, Russia has moved away in part from its previously cultivated neutrality in the dispute between China and Japan over islands in the South China Sea — a state of affairs that weighs heavily on Russian-Japanese relations, but that has further strengthened those with China.