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Anonymous Payment Schemes Thriving on Web

May 30, 2013 by Leave a Comment

And so began a collaboration between his organization, major banks, credit card companies, Internet service providers, payment processors, and Internet companies like Google and Microsoft. They had hoped to follow the money and quash child pornography for good.

But at some point the money trail went cold. For the last year, Mr. Allen has been working with global law enforcement and financial leaders to find out why.

He may be getting closer to an answer. Today, cybersecurity experts say billions of dollars made from child pornography and illicit sales of things like national secrets and drugs are being moved through anonymous Internet payment systems like Liberty Reserve, the currency exchange whose operators were indicted Tuesday for laundering $6 billion. Preet Bharara, the United States attorney in Manhattan, described it as the largest online money-laundering case in history.

“What we have concluded is that illegal enterprises — commercial child pornography, human trafficking, drug trafficking, weapons trafficking and organized crime — has largely moved to an unregulated system that is not connected to any central bank or national authority,” Mr. Allen said. “The key to all of this has been anonymity.”

Liberty Reserve was shut down last weekend, but cybersecurity experts said it was just one among hundreds of anonymous Internet payment systems. They said online systems like the Moscow-based WebMoney, Perfect Money, based in Panama, and CashU, which serves the Middle East and North Africa, require little more than a valid e-mail address to initiate an account. The names and locations of the actual users are unknown and can be easily fabricated. And they worry that the no-questions-asked verification system has created a safe harbor for illicit activity.

“There are a multitude of anonymous payment systems out there, similar to Liberty Reserve, of which there are over one hundred,” said Tom Kellermann, a vice president at the security company Trend Micro. “Many pretend to ‘know your customer’ but do not actually do due diligence.”

Representatives for WebMoney, Perfect Money and CashU did not return e-mailed requests for comment.

Currency exchanges like Liberty Reserve do not take or make payments of actual cash directly. Instead, they work with third parties that take payments and, in turn, credit the Liberty Reserve account.

After the authorities went after Liberty Reserve, underground forums buzzed with comments from people mourning the potential loss of frozen funds and others offering alternatives, including Bitcoin, the peer-to-peer payment network started in 2009 to offer a decentralized way to create and transfer electronic cash around the world.

In closed underground Russian-language forums, one person wrote, “I had almost 6k there. Where to now?” Another suggested, “Maybe another alternative is Perfect Money? I wonder if Bitcoin exchange rate will go up or not.”

Indeed, the value of the Bitcoin virtual currency spiked temporarily on news of the Liberty Reserve shutdown. But law enforcement officials say Liberty Reserve operated with more anonymity than Bitcoin. Unlike Liberty Reserve and other anonymous payment systems, Bitcoin transactions are stored in a public ledger, called a block chain, that make it possible to trace Bitcoin transactions even years after the fact.

“You can track specific Bitcoin movements just as you would the serial number on a U.S. dollar,” said Jeff Garzik, a Bitcoin developer. The real concern, security experts say, are private payment services that claim to do due diligence, but do not do even the most basic verification.

This article has been revised to reflect the following correction:

Correction: May 31, 2013

Because of an editing error, an article on Thursday about anonymous payment schemes and how they are thriving on the Web referred incorrectly to Bitcoin, a peer-to-peer payment network started in 2009. Bitcoin was meant to offer a decentralized way — not centralized — to create and transfer electronic cash.

Article source: http://www.nytimes.com/2013/05/30/technology/anonymous-payment-schemes-thriving-on-web.html?partner=rss&emc=rss

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Russia Begins Selectively Blocking Internet Content

March 31, 2013 by Leave a Comment

The country’s communications regulators have required Facebook, Twitter and YouTube to remove material that the officials determined was objectionable, with only YouTube, owned by Google, resisting. The video-sharing site complied with a Russian agency’s order to block a video that officials said promoted suicide. But YouTube filed a lawsuit in Russian court in February saying the video, showing how to make a fake wound with makeup materials and a razor blade, was intended for entertainment and should not be restricted.

Supporters of the law, which took effect in November, say it is a narrowly focused way of controlling child pornography and content that promotes drug use and suicide.

But opposition leaders have railed against the law as a crack in the doorway to broader Internet censorship. They say they worry that social networks, which have been used to arrange protests against President Vladimir V. Putin, will be stifled.

The child protection law, they say, builds a system for government officials to demand that companies selectively block individual postings, so that contentious material can be removed without resorting to a countrywide ban on, for example, Facebook or YouTube, which would reflect poorly on Russia’s image abroad and anger Internet users at home.

So far at least, the Russians have been mostly singling out not political content but genuinely distressing material posted by Russian-speaking users.

On Friday, Facebook took down a page globally that was connected to suicide after it was flagged by the Russian regulatory agency, called the Federal Service for Supervision in Telecommunications, Information Technology and Mass Communications, known by its acronym Roskomnadzor. A spokesman for the agency had told Facebook it had until Sunday to comply or risk being blocked in Russia.

For Facebook, the response turned out to be an easy decision. Everybody concerned — the company, the government and opposition figures — agreed the suicide-themed user group was not a friendly page. The group, called “Club Suicid,” was deemed serious enough not to be sheltered by Facebook’s criteria for “controversial humor.”

“We reviewed the content and it was removed because it violated our terms of use,” the company said in a statement.

Facebook says it also complies with local legislation to ban content in certain countries, though that was not the reason for removing the page in this case.

“Notable examples of where most services, including ours, will I.P.-restrict access for certain counties are in Germany” and in France, where it blocks content related to Holocaust denial, and in Turkey, where content defaming the country’s founder, Mustafa Kemal Ataturk, is blocked, Facebook said in its statement.

The spokesman for the Roskomnadzor agency, Vladimir Pikov, said that a separate government agency, Rospotrebnadzor, a consumer-protection organization intended to ensure the safety of food and consumer goods, had made a determination that the Facebook post promoted suicide, and was thus a public health threat.

Twitter, the microblogging site, in March began complying with Russian requests to remove posts — two because they appeared to be related to an attempt to deal in illegal drugs and three posts for “promoting suicidal thoughts,” according to a statement issued March 15 by Roskomnadzor. Twitter has been “actively engaged in cooperation,” the statement said.

Izvestia, a Russian newspaper, reported that Twitter and the Russian agencies’ officials had been in negotiations since November to create a mechanism for selectively blocking Twitter posts inside Russia.

Anton Nosik, a blogger and journalist in Russia, called the law in a telephone interview “absurd, harmful and absolutely unnecessary.” But, he said, so long as regulators focus on genuinely macabre material like sites visited by people fascinated by suicide, he is not overly concerned about a crackdown on the videos and Web pages in the Russian blogosphere. “The track record of the authorities shows they are not going to enforce it strictly.”

Article source: http://www.nytimes.com/2013/04/01/technology/russia-begins-selectively-blocking-internet-content.html?partner=rss&emc=rss

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Court Orders French Cop-Watching Site Blocked

October 17, 2011 by Leave a Comment

PARIS — A court here has ruled that French Internet service providers must block access to a Web site that shows pictures and videos of police officers arresting suspects, taunting protesters and allegedly committing acts of violence against members of ethnic minorities.

Law enforcement officials, who had denounced the site as an incitement to violence against the police, welcomed the decision.

“The judges have analyzed the situation perfectly — this site being a threat to the integrity of the police — and made the right decision,” Jean-Claude Delage, secretary general of the police union, Alliance Police Nationale, told Agence France-Presse.

But free speech advocates reacted with alarm, saying the ruling, issued Friday, reflected a French tendency to restrict Internet freedoms.

The site, called Copwatch Nord Paris I-D-F, is an offshoot of the so-called cop-watching groups that appeared in the United States in the 1990s. In the United States, the courts have generally ruled that filming the police is protected by free speech guarantees in the U.S. Constitution.

In France, there is no equivalent to the First Amendment to the U.S. Constitution, which bars Congress from making any law “abridging the freedom of speech, or of the press.” President Nicolas Sarkozy has called for the development of a “civilized Internet,” promoting stricter law enforcement in the digital sphere, in areas ranging from protecting copyright to preventing the spread of child pornography.

“This court order illustrates an obvious will by the French government to control and censor citizens’ new online public sphere,” said Jérémie Zimmermann, spokesman for La Quadrature du Net, a Paris-based organization that campaigns against restrictions on the Internet.

The police had said they were particularly concerned about portions of the site showing identifiable photos of police officers, along with personal data — including some cases in which officers are said to express far-right sympathies on social networks.

The initial complaint against the site was filed by a Paris police officer who said he had received a bullet in his mailbox after his picture had appeared on the site. He was joined by other officers.

The case was then taken up by Claude Guéant, the French interior minister. He had asked the court to issue an order blocking only certain pages of the site — those showing the most sensitive personal information. But Internet service providers argued that this would be impossible, given that they had been unable to identify the host of the site or its creators.

The French Association of Internet Access and Service Providers said it was relieved that it had not been asked to try to “filter” the site in this way. It said that while it did not want to encourage the blocking of sites, it did not object as long as the judicial process had been followed.

“As long as the necessary safeguards are respected, members will be happy to comply with the judicial decision,” said Nicolas d’Arcy, legal adviser to the association.

Cop watching is not exactly new; in 1991, the beating of a black motorist, Rodney King, by Los Angeles police officers was videotaped by a bystander with a camcorder. The acquittal of three of the officers a year later led to widespread rioting in the city.

In Berkeley, California, an organization claiming to be “the original Copwatch group” had already been set up in 1990. From there, the movement spread to other U.S. cities, adopting the Web and other tools as digital technology advanced. Eventually, it crossed the Atlantic to Britain and, now, France.

A report by Amnesty International in 2009 was sharply critical of the French record on police brutality, as well as the authorities’ response. “Allegations of beatings, racial abuse, excessive force and even unlawful killings by French police are rarely investigated effectively and those responsible are seldom brought to justice,” the report said.

The police union said violence against police officers had been on the rise, too. On Friday, for example, an officer was killed in the city of Bourges by a knife-wielding assailant, the police said.

The “I-D-F” in the name of the French site is short for “Île-de-France,” the region that includes Paris and its suburbs, the scene of frequent tension between the police and young members of ethnic minority groups.

The court ordered that the site be blocked immediately, but it was still accessible late Friday.

Article source: http://www.nytimes.com/2011/10/17/technology/court-orders-french-cop-watching-site-blocked.html?partner=rss&emc=rss

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