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Bitcoin thieves threaten real violence for virtual currencies

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The currency they were after was virtual, but the guns they carried were anything but.

In the beach resort of Phuket, Thailand, last month, the assailants pushed their victim, a young Russian man, into his apartment and kept him there, blindfolded, until he logged onto his computer and transferred about $100,000 worth of Bitcoin to an online wallet they controlled.

A few weeks before that, the head of a Bitcoin exchange in Ukraine was taken hostage and only released after the company paid a ransom of $1 million in Bitcoin.

In New York City, a man was held captive by a friend until he transferred over $1.8 million worth of Ether, a virtual currency second in value only to Bitcoin.

The rich have always feared robbery and extortion. Now, big holders of Bitcoin and its brethren have become alluring marks for criminals, especially since the prices of virtual currencies entered the stratosphere last year.

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Virtual currencies can be easily transferred to an anonymous address set up by a criminal. While banks can stop or reverse large electronic transactions made under duress, there is no Bitcoin bank to halt or take back a transfer, making the chances of a successful armed holdup frighteningly enticing.

Thieves have taken advantage of this system in a startling number of recent cases, from Russia, Ukraine and Turkey to Canada, the United States and Britain.

“This is now becoming more pervasive and touching more law enforcement divisions that deal with organized crime and violent crime on a local level,” said Jonathan Levin, the founder of Chainalysis, which has worked with several law enforcement agencies on virtual currency crimes.

Mr. Levin’s company specializes in tracking criminal transactions on the blockchain, the computerized ledger where every Bitcoin transaction is publicly recorded.

Chainalysis has helped police attempt to track down criminals in several recent cases, including some that have not been made public, according to Mr. Levin.

But even when a transaction can be tracked, the design of Bitcoin means that criminals do not have to associate their identity with their Bitcoin address — as is necessary with most traditional bank accounts. That has stymied police in several cases.

“For this, the advantage of Bitcoin is that it’s hard to verify,” said Chanut Hongsitthichaikul, an investigator with the Chalong Police Station, which investigated the case in Phuket. “We asked the victim how to track it since they know Bitcoin better than us. We asked them how to check the receiver. They said there is no way. It is hard to do.”

The Thai police tracked the victim’s laptop, which was also stolen, to Kuala Lumpur. That’s where the trail went cold.

While the recent crime wave has brought a new level of violence, virtual currency holders have been targets for several years. Criminals have been staging a long-running campaign to remotely hijack the cellphone numbers of prominent virtual currency holders in order to gain control of their digital wallets.

A few years ago, some of Bitcoin’s earliest proponents had SWAT teams called to their homes by people who demanded big Bitcoin payments to stop the harassment — a tactic called “SWATing” in some online communities.

There have also been many documented holdups around the world at in-person meetings where people were looking to convert cash into virtual currency, including one last year in Palm Beach, Fla., where the thief made off with $28,000 before being arrested.

But criminals have grown much more brazen as the price of Bitcoin has spiked.

The most audacious attack hit Exmo, the virtual currency exchange in Ukraine. The chief executive of the exchange, Pavel Lerner, was abducted the day after Christmas and freed a few days later after the company made a ransom payment of Bitcoin worth around $1 million.

A spokeswoman for Exmo said the money came from Mr. Lerner’s personal funds. Mr. Lerner was on leave from the company but would return.

A month earlier, a Turkish businessman was forced to hand over the passwords to his virtual currency wallets — containing nearly $3 million worth of Bitcoin — after having his car stopped by an armed gang in Istanbul that appeared to know about his Bitcoin holdings, according to local news reports.

Many big virtual currency holders privately say that they will no longer travel to Russia, Turkey or other countries where they assume that attacks may be easier to pull off because of organized crime.

But armed attackers have also hit a Canadian Bitcoin exchange in Ottawa, the Ether investor in New York City and a prominent virtual currency trader living near Oxford, England.

In a number of cases, the assailants have been caught — and forced to return money — because of video footage. In other cases, the criminals are still at large.

The unsolved crimes have sown fear among the ranks of the so-called crypto rich, which have grown considerably over the past year.

At a conference for about 170 leaders in the virtual currency industry this month, there was a panel discussion about how to deal with the threat of robbery, extortion and kidnappings in which the criminals seek Bitcoin or other virtual currencies.

Organizers of the conference, known as the Satoshi Roundtable and held near Cancun, Mexico, brought in a security force and instituted significant privacy measures for guests to protect them from criminals while they were in attendance.

During the group discussion at the conference, attendees talked about having a “duress wallet” at home that can be handed over to throw an assailant off the trail of a bigger fortune, as well as several other security measures that can be used to deal with the threat.

Most of the crypto rich are loath to speak publicly about the risk of physical attacks, for fear of making themselves targets.

But Jameson Lopp, a longtime Bitcoin engineer and virtual currency holder, said the community should be proactive in confronting the threat, to let criminals know that people are taking steps to protect themselves.

Last summer, someone called a SWAT team to Mr. Lopp’s house to harass him. Since then, Mr. Lopp has installed closed-circuit cameras around his property and posted photos on Twitter of the automatic weapon he has at home.

In a more technical defensive measure, Mr. Lopp has long kept his virtual currency in so-called multisignature wallets created by the company he works for, BitGo. These wallets require multiple people to sign off on a transaction before the money can move.

Mr. Lopp will go even further later this year when he, his girlfriend and his dog move to a new home. He plans to “go dark” — not providing the address to anyone and using a post office box for deliveries. But he said even that will not fully banish his concerns.

“If you are rich and you own real estate, or stocks or a sports team, somebody can’t mug you and take your sports team away,” he said. “Having liquid crypto assets makes you much more attractive for that type of criminal attack.”

Mr. Levin said programmers are working to develop methods of signing virtual currency transactions that can quietly alert the authorities that a transaction is being made under duress — something like the hidden button under the bank teller’s desk.

But he said the most obvious way to thwart attackers is with wallets that require multiple signatures, and with less public discussion about owning virtual currencies.

Mr. Lopp said it is important to publicize the many ways in which virtual currency holders can fend off assailants so that criminals reconsider the likelihood of a successful attack.

“We’re in the very early days of this becoming a problem,” Mr. Lopp said. “The attackers are still trying to figure out what the risk-reward really is.”

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CIA nominee Burns calls China an ‘authoritarian adversary’

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William Burns is sworn in to testify before a Senate Intelligence Committee hearing on his nomination to be director of the Central Intelligence Agency (CIA) on Capitol Hill in Washington, February 24, 2021.

Tom Brenner | Reuters

WASHINGTON – President Joe Biden’s nominee to run the CIA told lawmakers Wednesday that if confirmed he would intensify America’s national security approach to counter China.

“Out-competing China will be key to our national security in the days ahead,” Will Burns said in his opening remarks to the Senate Intelligence Committee. “That will require a long-term, clear-eyed, bipartisan strategy, underpinned by domestic renewal and solid intelligence,” the former career diplomat added.

Burns, 64, who worked under both Republican and Democratic presidents, described Xi Jinping’s China as “a formidable, authoritarian adversary.”

He added that China was “methodically strengthening its capabilities to steal intellectual property, repress its own people, bully its neighbors, expand its global reach, and build influence in American society.”

Burns, who was introduced to the Senate committee by former Secretary of State James Baker and former CIA director and Secretary of Defense Leon Panetta, previously served as the U.S. ambassador to Jordan and Russia.

His confirmation is expected to easily pass with strong bipartisan support similar to the majority of Biden’s national security team.

Earlier this month, the Senate confirmed Alejandro Mayorkas to lead the nation’s Department of Homeland Security, making him the first Latino to hold the role. The Senate voted 56 to 43.

Last month, the Senate confirmed Avril Haines as the director of national intelligence with an 84 to 10 vote, making her the first official member of Biden’s Cabinet. Haines is also the first woman to lead the nation’s 18 intelligence agencies.

The Senate voted 93 to 2 to confirm Lloyd Austin as the next Pentagon chief, making him the nation’s first Black Defense secretary. The Senate confirmed Biden’s top diplomat Antony Blinken in a 78 to 22 vote, making him the nation’s next secretary of State.

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Tech pessimism founded on ‘real concerns’

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Mike Schroepfer

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Facebook’s Chief Technology Officer Mike Schroepfer believes the pessimism surrounding technology in the world today is “founded on real concerns of the negative impacts of technology.”

In an interview on Tuesday with the president of the Oxford Union, the Oxford University debating society, Schroepfer said that in some cases “we haven’t really always done the homework upfront” and thought about what a “bad actor” might do with a particular product before releasing it.

A Facebook spokesperson told CNBC on Wednesday that he was talking about the tech industry as a whole as opposed to Facebook specifically. The social media giant has been widely criticized for a range issues including the spread of hate speech and misinformation, influencing elections, being addictive, and failing to keep children safe on its platform.

“The thing that’s often true of new technologies and advancements is they often have very clear, acute examples where things change or are disruptive,” said Schroepfer. “It may be a loss of jobs or a new form of scammer abuse. It’s something that’s really easy to understand as ‘bad.’ And then they have very generalized improvements in the quality of life. So if I say I’ve increased the GDP overall by 3%, I’ve made everyone slightly more prosperous, but it’s harder to weigh against these very acute, specific harms.”

Schroepfer said it’s up to technologists to try to minimalize or eliminate these harms from the beginning, adding that he wants to help people understand the world wouldn’t be what it is today without technology.

“If you go back, 50 years, 100 years, 300 years, and you look at how life was different then versus now, the biggest change in my mind is technology,” he said. “300 years ago, most of us would be subsistence farmers. Our average life expectancy would be half of what it is today.”

Schroepfer added: “It’s important for us all to be real about the risks, but still be optimistic about the better future we can build.”

A.I. push

Schroepfer said one of the main areas that Facebook is investing in is artificial intelligence, which has been hailed as a technology that could bring about a new industrial revolution.

Facebook set up a dedicated AI research lab around the same time that Google acquired London AI research lab DeepMind in 2014. Facebook AI Research, as the lab is known, is now spread across multiple offices around the world.

“In the first five years or so at Facebook, honestly a lot of our focus was just trying to keep up with scaling the site,” said Schroepfer. “There was a lot of technology and infrastructure work that had to be built to make sure that as millions, or tens of millions, of new people use their products the whole thing didn’t crash and burn.”

Once Facebook had grappled with scaling, Schroepfer said the company was able to start thinking about the next 10 years, adding that AI was making a breakthrough around the time.

“We realized we didn’t want to be reading other people’s (AI) research papers and trying to reimplement them,” he said. “We wanted to be pushing this at the frontier. We looked at a lot of technological areas and made a very explicit choice to build a research lab focused exclusively on AI, rather than a generalized research center, because we just felt like if we put all of our energy there, there’s so much that AI could do to Facebook and to the world.”

AI software now underpins many of Facebook’s products and Schroepfer said the company’s push into AI has worked out better than he hoped.

He pointed out that Facebook’s Oculus headset doesn’t work without computer vision, which is a field of AI that allows computers to “see” the world around them. AI software also allows Portal, Facebook’s video chat device, to automatically pan and zoom the camera. On the main Facebook platform, AI is used to translate languages and remove content that violates its policies. However, it doesn’t spot everything, and humans still play a significant role.

Artificial General Intelligence

AI keeps on advancing but Schroepfer isn’t as concerned as Tesla CEO Elon Musk about it being a serious danger to humans any time soon.

“I am in a very particular spot here,” said Schroepfer. “There are narrow AIs and there are generalized AIs.”

Narrow AI can excel at specific tasks whereas generalized AI can do multiple things well. Developing artificial general intelligence is often seen as the holy grail in AI.

“Generalizability and transfer learning is an unsolved problem in AI research in general,” said Schroepfer. “We’re quite a way away from a generalized intelligence,” he continued, adding that “this is what the worst of the worst fears of AI is.”

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Public support for Covid vaccines rises but skepticism remains: study

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Pharmacist, Murtaza Abdulkarim (L) administers a dose of the AstraZeneca/Oxford Covid-19 vaccine to a patient at a temporary vaccination centre, staffed by pharmacists and pharmacist assistants, at the Al-Abbas Islamic Centre in Birmingham, West Midlands on February 4, 2021.

Oli Scarff | AFP | Getty Images

LONDON — More than three quarters of people in the U.K. now say they are “very likely” to have a coronavirus vaccine, a survey by the University of Oxford has found, up from 50% among the same group of survey respondents five months ago.

The study, part of the University of Oxford-funded research projectCoping with COVID-19′, was conducted on a representative sample of over 1,600 U.K. adults using the polling company YouGov. 

It found that the percentage of people who are “likely” or “very likely” to take the vaccine has increased to 87% from 78% since the sampling of respondents last October.

It found that age remains a strong predictor of willingness to take the vaccine with the 50-59 age group now much more positive about the vaccine since October.

There is a group of around 7% of the population who remain “very unlikely” to take the vaccine and this has not shifted greatly, the study said.

The survey of 1,200 UK residents, contacted in early October 2020 and again in the first week of February 2021, showed strong relationships between political attitudes and the intention to accept the vaccine, however, and that important gaps remain, driven by income and ethnicity.  

Co-authored by scholars from the University of Oxford, London School of Economics, and University College London, the study found that people on lower incomes are, on average, much less willing to take the vaccine. It also found that ethnic minority participants’ opinion of the vaccine had edged slightly in favor of the shot, but still trailed the white population represented in the survey.

The U.K.’s vaccination rollout began in December, with priority given to the elderly, care home residents and staff, and health care workers. The nationwide vaccination program has been seen as a success so far, with the rollout now extending to more priority groups in younger age brackets, and those deemed clinically vulnerable. As of Monday, almost 18 million people have received their first dose of a coronavirus vaccine.

Government officials have expressed concern over vaccine hesitancy among some key groups, however, including care home workers and some ethnic minorities.

Barriers to vaccine uptake can include a perception of risk, low confidence in the vaccine, distrust in the medical establishment and a lack of endorsement or communication from trusted providers and community leaders, the government said in a recent report. It has sought to tackle vaccine hesitancy by engaging faith leaders and local medical practitioners that can easily engage with their local communities and encourage vaccine take-up.

However, one’s political persuasion was found to affect vaccine acceptance too, according to the Oxford study, including whether respondents voted for Brexit or not. The study found “Remainers,” those who voted for the U.K. to stay in the EU, are 7 percentage points more likely to be willing to take the vaccine than “Leavers,” or those who did not vote in the 2016 referendum. 

People who voted for the Brexit party or Green in 2019 — and especially those who did not vote at all — were found to be the least willing to take the vaccine, with supporters of the Scottish National Party and Liberal voters most positively inclined.  

Much is riding on vaccine rollouts in the U.K. and beyond. The U.K. government has recently set out a four-step plan to lift a national lockdown in England over the coming weeks and months, but has said it would rely on data rather than dates in determining how and when it lifts restrictions. How quickly it can re-open public life will affect how quickly its economy, which contracted almost 10% in 2020, can bounce back.

Ben Ansell, professor of Comparative Democratic Institutions at the Department of Politics and International Relations at Oxford University, said the findings showed “important gaps remain especially among groups whose trust in politicians is typically lower: non-voters, younger citizens, and poorer households.”

“When so much of the U.K. Government’s lockdown exit strategy rests on successful vaccine roll out, these insights will be of immediate importance to policymakers in both their internal deliberation on policy and their outward facing communication with the public.”

The Economist Intelligence Unit has forecast that, if vaccine rollouts proceed as it currently expects, most developed countries should have immunized 60-70% of their population by mid-2022. It believes the economic impact of vaccination rollouts should emerge sooner, however, with a global economic recovery to pick up pace from mid‑2021.

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