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As of September 29th, South Korea is the second country in Asia to ban Initial Coin Offerings, or ICOs in short. ICOs refer to the creation of new cryptocurrencies. The ban comes after South Korea noticed that “raising funds through ICOs seem to be on the rise globally” and domestically, the Financial Services Commission said in a statement after meeting with the national bank, tax, and finance officials. After all, ICOs can range from serious attempts to build more digital currencies to more risky plans that resemble pyramid schemes, according to some financial experts’ analysis in the past. In addition to banning raising money through ICOs, Korean regulators may exact more measures to control cryptocurrencies after continuing to monitor the situation. Earlier in September the Chinese government announced it was banning all ICOs due to their ”disrupting” influence on the country’s financial order. The Chinese continued to state that ICOs are a form of unapproved illegal public financing that can be used to finance illegal activities and commit fraud.

Because cryptocurrencies are new, no one is really sure about the full extent of the impact cryptocurrencies have on our society. As it appears, South Korea and China are not willing to take the gamble on cryptocurrencies. They fear that their inability to regulate them will have dire consequences for their country’s economy. Aside from the destabilization of the financial market, they claim that these untraceable, unregulated and decentralized currencies are the perfect way for criminals to finance their activities. So, as a response to the impact and uncertainty of cryptocurrencies, these Asian governments are the first to restrict the influx of new cryptocurrencies, while also tightening control on already existing cryptocurrencies. And who can blame them, with the rise of organisations like the Silk Road; a website that provided a digital platform for drug dealers and users to purchase and sell drugs, all using Bitcoin.

Apparently there are some good reasons to blame them, according to some critics. Most importantly, they argue, the money that is raised from Initial Coin Offerings provides the needed finance for start-ups that would otherwise never have existed. These companies actually contribute to value creation, and should therefore be considered important for the (global) economy. Aside from this, cryptocurrencies enables a system of more efficient transactions. It does this in two ways. Firstly, there is no need for an intermediary like a bank to validate the transactions. This is done via the cryptocurency’s blockchain. This increases the speed at which transaction can be handled. Secondly, since there are very small (if any) transaction costs, financing becomes cheaper and more readily available for everyone.

It is clear that cryptocurrencies are and will remain a sensitive subject, at least until more is known about their positive and negative effects on our society. Perhaps cryptocurrencies are too big of a shock for a society that has been using the same financial system for centuries. But what do you think? Do the benefits of decentralized currencies outweigh the societal risks associated with them? Should governments embrace cryptocurrencies as a blessing or are they right to fear them?

 

 

References:

• Choudhurry, S. (2017). China bans companies from raising money through ICOs, asks local regulators to inspect 60 major platforms. Retrieved from: www.cnbc.com/2017/09/04/chinese-icos-china-bans-fundraising-through-initial-coin-offerings-report-says.html
• Ezugwu, C. (2016). The Pros & Cons Of Cryptocurreny. Retrieved from: https://www.bizcatalyst360.com/the-pros-cons-of-cryptocurrency/
• Liao, S. (2017). South Korea bans Initial Coin Offerings. Retrieved from: www.theverge.com/2017/9/29/16384718/south-korea-ban-initial-coin-offerings-bitcoin-cryptocurrency-icos
• Vicent, J. (2017). China bans all ICOs and digital currency launches as ‘illegal public financing’. Retrieved from: www.theverge.com/2017/9/4/16251624/china-bans-ico-initial-coin-offering-regulation
• Quartz. (2017). South Korea has banned all forms of initial coin offerings in the country. Retrieved from: www.qz.com/1090437/bitcoin-btc-and-ethereum-eth-prices-fall-on-south-koreas-bans-on-initial-coin-offerings-icos/

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Database breaches are becoming more and more common. Some notable ones include University of California, Los Angeles (UCLA) Health System, Community Health Services (CHS), Anthem Inc, OPM, United Airlines and as of yesterday Deloitte. It is quite possible that the perpetrators wanted to gather additional intelligence to select their next targets.

What some people may not know is that information and systems are shared between these organisations. For example, the UCLA Health system has an existing relationship with Anthem in which they exchange patient, financial and testing information. The Anthem, Premera and OPM breaches have been linked to the same (Chinese) hacking group. Based on the relationship of the victims and the data that was taken, we can assume the intelligence was used to further the group’s target value with every next hack.

A thing to consider about database attacks is that infiltrators gather patient information from the breached database servers. Personal information of the medical staff is usually on these servers too. This information often gives access to the other services used by the medical staff and patients. Because humans generally don’t want to have to remember a different password for each service they use, some passwords are used for multiple services. Therefore, getting your hands on one database often opens up the personal access of certain individuals to many different services.

The Transportation Security Administration (TSA), insurance companies and several airlines share data via a Known Traveler Number (KTN) that track travellers in the enrolled program. This shared number is a way for malicious actors to access manifests from United Airlines for the purpose of tracking travellers. A dark question  to ask would be how state-sponsored actors would use this data? One answer could be that they are following agents of government intelligence and military personnel abroad and domestically. This gives overseas governments intelligence to utilize in counter intelligence and compromising individuals’ security clearances.

A simple low-level database breach can have far reaching effects. With the breach of regional medical services (UCLA) the infiltrators had access to data from national insurers. The insurance companies (Premera, Anthem) shared information with travel agencies (United Airlines). Now, travel information (United Airlines) about government personnel (CIA, NSA, FBI) is being tracked. This all potentially started from a breach of a regional medical facility.

However, there are several ways to protect your company from database breaches:

• Track suspicious internal data usage and transfer.
• Maintain active intelligence of open and closed source forums in the dark web.
• Get players in your supply chain to uphold high security standards.
• Create a doomsday protocol for your security staff to execute should the need arrive.
• Scan and test all IT systems regularly.
• Provide the necessary people, processes, and technology to protect your organization.

 

 

 

 

References:

• Premera. (2015). How Anthem Cyber-Attack could impact Premera members. Retrieved from: https://www.premera.com/wa/visitor/healthsource/community/anthem/
• Computerworld. (2015). Premera, Anthem data breaches linked by similar hacking tactics. Retrieved from: https://www.computerworld.com/article/2898419/data-breach/premera-anthem-data-breaches-linked-by-similar-hacking-tactics.html
• ITgovernanceusa (2015). OPM cyber attack linked to Anthem and Premera healthcare breaches. Retrieved from: https://www.itgovernanceusa.com/blog/opm-cyber-attack-linked-to-anthem-and-premera-health-care-breaches/
• Bloomberg. (2015). China-tied hackers that hit U.S. said to breach United Airlines. Retrieved from: https://www.bloomberg.com/news/articles/2015-07-29/china-tied-hackers-that-hit-u-s-said-to-breach-united-airlines