As the agency describes it, the scammer will contact their victim and somehow convince them that they need to send money, either with promises of love, further riches, or by impersonating an actual institution like a bank or utility company. After the mark is convinced, the scammer will have them get cash (sometimes out of investment or retirement accounts), and head to an ATM that sells cryptocurrencies and supports reading QR codes. Once the victim’s there, they’ll scan a QR code that the scammer sent them, which will tell the machine to send any crypto purchased to the scammer’s address. Just like that, the victim loses their money, and the scammer has successfully exploited them.
The “upgrade” (as it were) for scammers with the crypto ATM method is two-fold: it can be less friction than sending a wire transfer, and at the end the scammer has cryptocurrency instead of fiat. With wire transfers, you have to fill out a form, and you may give that form to an actual person (who could potentially vibe check you). Using the ATM method, there’s less time to reflect on the fact that you’re about to send money to a stranger. And, if you’re a criminal trying to get your hands on Bitcoin, you won’t have to teach your targets how to buy coins on the internet and transfer them to another wallet—they probably already know how to use an ATM and scan a QR code.
Entries Tagged "scams"
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The SQUID cryptocurrency peaked at a price of $2,861 before plummeting to $0 around 5:40 a.m. ET., according to the website CoinMarketCap. This kind of theft, commonly called a “rug pull” by crypto investors, happens when the creators of the crypto quickly cash out their coins for real money, draining the liquidity pool from the exchange.
I don’t know why anyone would trust an investment—any investment—that you could buy but not sell.
As usual, you can also use this squid post to talk about the security stories in the news that I haven’t covered.
Read my blog posting guidelines here.
It turns out that it’s surprisingly easy to create a fake Harvard student and get a harvard.edu email account. Scammers are using that prestigious domain name to shill brands:
Basically, it appears that anyone with $300 to spare can —or could, depending on whether Harvard successfully shuts down the practice—advertise nearly anything they wanted on Harvard.edu, in posts that borrow the university’s domain and prestige while making no mention of the fact that it in reality they constitute paid advertising….
A Harvard spokesperson said that the university is working to crack down on the fake students and other scammers that have gained access to its site. They also said that the scammers were creating the fake accounts by signing up for online classes and then using the email address that process provided to infiltrate the university’s various blogging platforms.
Here’s a story of someone who, with three compatriots, rented textbooks from Amazon and then sold them instead of returning them. They used gift cards and prepaid credit cards to buy the books, so there was no available balance when Amazon tried to charge them the buyout price for non-returned books. They also used various aliases and other tricks to bypass Amazon’s fifteen-book limit. In all, they stole 14,000 textbooks worth over $1.5 million.
The article doesn’t link to the indictment, so I don’t know how they were discovered.
EDITED TO ADD (11/12): Press release.
A newspaper in Malaysia is reporting on a cell phone cloning scam. The scammer convinces the victim to lend them their cell phone, and the scammer quickly clones it. What’s clever about this scam is that the victim is an Uber driver and the scammer is the passenger, so the driver is naturally busy and can’t see what the scammer is doing.
This is a longish video that describes a profitable computer banking scam that’s run out of call centers in places like India. There’s a lot of fluff about glitterbombs and the like, but the details are interesting. The scammers convince the victims to give them remote access to their computers, and then that they’ve mistyped a dollar amount and have received a large refund that they didn’t deserve. Then they convince the victims to send cash to a drop site, where a money mule retrieves it and forwards it to the scammers.
I found it interesting for several reasons. One, it illustrates the complex business nature of the scam: there are a lot of people doing specialized jobs in order for it to work. Two, it clearly shows the psychological manipulation involved, and how it preys on the unsophisticated and vulnerable. And three, it’s an evolving tactic that gets around banks increasingly flagging blocking suspicious electronic transfers.
Research paper: Rick Wash, “How Experts Detect Phishing Scam Emails“:
Abstract: Phishing scam emails are emails that pretend to be something they are not in order to get the recipient of the email to undertake some action they normally would not. While technical protections against phishing reduce the number of phishing emails received, they are not perfect and phishing remains one of the largest sources of security risk in technology and communication systems. To better understand the cognitive process that end users can use to identify phishing messages, I interviewed 21 IT experts about instances where they successfully identified emails as phishing in their own inboxes. IT experts naturally follow a three-stage process for identifying phishing emails. In the first stage, the email recipient tries to make sense of the email, and understand how it relates to other things in their life. As they do this, they notice discrepancies: little things that are “off” about the email. As the recipient notices more discrepancies, they feel a need for an alternative explanation for the email. At some point, some feature of the email—usually, the presence of a link requesting an action—triggers them to recognize that phishing is a possible alternative explanation. At this point, they become suspicious (stage two) and investigate the email by looking for technical details that can conclusively identify the email as phishing. Once they find such information, then they move to stage three and deal with the email by deleting it or reporting it. I discuss ways this process can fail, and implications for improving training of end users about phishing.
A 17-year-old Florida boy was arrested and charged with last week’s Twitter hack.
This is a developing story. Post any additional news in the comments.
EDITED TO ADD (8/1): Two others have been charged as well.
EDITED TO ADD (8/11): The online bail hearing was hacked.
Twitter was hacked this week. Not a few people’s Twitter accounts, but all of Twitter. Someone compromised the entire Twitter network, probably by stealing the log-in credentials of one of Twitter’s system administrators. Those are the people trusted to ensure that Twitter functions smoothly.
The hacker used that access to send tweets from a variety of popular and trusted accounts, including those of Joe Biden, Bill Gates, and Elon Musk, as part of a mundane scam—stealing bitcoin—but it’s easy to envision more nefarious scenarios. Imagine a government using this sort of attack against another government, coordinating a series of fake tweets from hundreds of politicians and other public figures the day before a major election, to affect the outcome. Or to escalate an international dispute. Done well, it would be devastating.
Whether the hackers had access to Twitter direct messages is not known. These DMs are not end-to-end encrypted, meaning that they are unencrypted inside Twitter’s network and could have been available to the hackers. Those messages—between world leaders, industry CEOs, reporters and their sources, heath organizations—are much more valuable than bitcoin. (If I were a national-intelligence agency, I might even use a bitcoin scam to mask my real intelligence-gathering purpose.) Back in 2018, Twitter said it was exploring encrypting those messages, but it hasn’t yet.
Internet communications platforms—such as Facebook, Twitter, and YouTube—are crucial in today’s society. They’re how we communicate with one another. They’re how our elected leaders communicate with us. They are essential infrastructure. Yet they are run by for-profit companies with little government oversight. This is simply no longer sustainable. Twitter and companies like it are essential to our national dialogue, to our economy, and to our democracy. We need to start treating them that way, and that means both requiring them to do a better job on security and breaking them up.
In the Twitter case this week, the hacker’s tactics weren’t particularly sophisticated. We will almost certainly learn about security lapses at Twitter that enabled the hack, possibly including a SIM-swapping attack that targeted an employee’s cellular service provider, or maybe even a bribed insider. The FBI is investigating.
This kind of attack is known as a “class break.” Class breaks are endemic to computerized systems, and they’re not something that we as users can defend against with better personal security. It didn’t matter whether individual accounts had a complicated and hard-to-remember password, or two-factor authentication. It didn’t matter whether the accounts were normally accessed via a Mac or a PC. There was literally nothing any user could do to protect against it.
Class breaks are security vulnerabilities that break not just one system, but an entire class of systems. They might exploit a vulnerability in a particular operating system that allows an attacker to take remote control of every computer that runs on that system’s software. Or a vulnerability in internet-enabled digital video recorders and webcams that allows an attacker to recruit those devices into a massive botnet. Or a single vulnerability in the Twitter network that allows an attacker to take over every account.
For Twitter users, this attack was a double whammy. Many people rely on Twitter’s authentication systems to know that someone who purports to be a certain celebrity, politician, or journalist is really that person. When those accounts were hijacked, trust in that system took a beating. And then, after the attack was discovered and Twitter temporarily shut down all verified accounts, the public lost a vital source of information.
There are many security technologies companies like Twitter can implement to better protect themselves and their users; that’s not the issue. The problem is economic, and fixing it requires doing two things. One is regulating these companies, and requiring them to spend more money on security. The second is reducing their monopoly power.
The security regulations for banks are complex and detailed. If a low-level banking employee were caught messing around with people’s accounts, or if she mistakenly gave her log-in credentials to someone else, the bank would be severely fined. Depending on the details of the incident, senior banking executives could be held personally liable. The threat of these actions helps keep our money safe. Yes, it costs banks money; sometimes it severely cuts into their profits. But the banks have no choice.
The opposite is true for these tech giants. They get to decide what level of security you have on your accounts, and you have no say in the matter. If you are offered security and privacy options, it’s because they decided you can have them. There is no regulation. There is no accountability. There isn’t even any transparency. Do you know how secure your data is on Facebook, or in Apple’s iCloud, or anywhere? You don’t. No one except those companies do. Yet they’re crucial to the country’s national security. And they’re the rare consumer product or service allowed to operate without significant government oversight.
For example, President Donald Trump’s Twitter account wasn’t hacked as Joe Biden’s was, because that account has “special protections,” the details of which we don’t know. We also don’t know what other world leaders have those protections, or the decision process surrounding who gets them. Are they manual? Can they scale? Can all verified accounts have them? Your guess is as good as mine.
In addition to security measures, the other solution is to break up the tech monopolies. Companies like Facebook and Twitter have so much power because they are so large, and they face no real competition. This is a national-security risk as well as a personal-security risk. Were there 100 different Twitter-like companies, and enough compatibility so that all their feeds could merge into one interface, this attack wouldn’t have been such a big deal. More important, the risk of a similar but more politically targeted attack wouldn’t be so great. If there were competition, different platforms would offer different security options, as well as different posting rules, different authentication guidelines—different everything. Competition is how our economy works; it’s how we spur innovation. Monopolies have more power to do what they want in the quest for profits, even if it harms people along the way.
This wasn’t Twitter’s first security problem involving trusted insiders. In 2017, on his last day of work, an employee shut down President Donald Trump’s account. In 2019, two people were charged with spying for the Saudi government while they were Twitter employees.
Maybe this hack will serve as a wake-up call. But if past incidents involving Twitter and other companies are any indication, it won’t. Underspending on security, and letting society pay the eventual price, is far more profitable. I don’t blame the tech companies. Their corporate mandate is to make as much money as is legally possible. Fixing this requires changes in the law, not changes in the hearts of the company’s leaders.
This essay previously appeared on TheAtlantic.com.
EDITED TO ADD: This essay has been translated into Czech.
EDITED TO ADD: This essay has been translated into Spanish.
Really interesting research: “An examination of the cryptocurrency pump and dump ecosystem“:
Abstract: The surge of interest in cryptocurrencies has been accompanied by a proliferation of fraud. This paper examines pump and dump schemes. The recent explosion of nearly 2,000 cryptocurrencies in an unregulated environment has expanded the scope for abuse. We quantify the scope of cryptocurrency pump and dump schemes on Discord and Telegram, two popular group-messaging platforms. We joined all relevant Telegram and Discord groups/channels and identified thousands of different pumps. Our findings provide the first measure of the scope of such pumps and empirically document important properties of this ecosystem.
Sidebar photo of Bruce Schneier by Joe MacInnis.