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Source: New Zealand Privacy Commissioner – Blog

Cyber-crime doesn’t always pay, and cyber-policing is becoming a way to catch the criminals. Several recent news stories highlight how the online world has become a new frontier in crime and law enforcement.

New Zealanders were able to see first-hand the impact of cyber-crime when overseas-based hackers brought Waikato DHB to a virtual standstill by ransacking its IT system and holding it to ransom. That ransom was not paid.

But in the case of the US fuel pipeline company which was being extorted by a Russia-based hacker group, the ransom (most of it consisting of 75 bitcoins valued at about NZ$6 million) was paid – and most of it recovered.

The crime became international news on 7 May when Colonial Pipeline, a company which supplies about half the fuel used on the US East Coast, shut down its operations temporarily after the cybercriminals hacked into the company’s computer system.

Cryptocurrency like bitcoin is apparently favoured by cybercrime syndicates because payments can be made directly online from anywhere in the world – and these transfers are made outside international banking norms. Online criminals like the privacy features of cryptocurrency because it is very hard to trace.

Or in the Colonial Pipeline case, so the criminals had hoped. But if you can identify one transaction, it can lead investigators to an individual’s cryptocurrency wallet. The FBI was able to identify the wallet used by the hackers and the sum was retrieved after a seizure warrant was issued. The operation prompted the acting US attorney for Northern District of California, Stephanie Hinds, to intone: “The extortionists will never see this money.”

Ransomware attacks have been growing in number around the world. The Colonial Pipeline and Waikato DHB ransomware attacks are simply the latest to garner headlines. Others include Fujifilm, the American meat processing plant JBS and Ireland’s HSE health service. In the Irish example, a New Zealand-based cyber security company Emsisoft assisted with the recovery process. 

But the shoe is sometimes on the other foot. We’ve seen how the FBI were able to recover most of the ransom paid by Colonial Pipeline by ‘crypto-sleuthing’. And now it is news that criminal syndicates have been stung by an encrypted messaging app which was secretly created and controlled by US and Australian law enforcement agencies to reveal the secret communications of networks of criminal organisations, including some based in New Zealand.

More and more of us are using encrypted messaging apps to protect our privacy and personal information. These are also naturally favoured by people with bad intentions wanting to conceal their crimes.

The AN0M app came pre-installed on nearly 12,000 phones. Early adopters were duped by undercover law enforcement agents into using the phones and they in turn recommended it to their networks as a secure way to communicate with each other, not realising that law enforcement agencies could decrypt the messages and eavesdrop on their conversations. 

After the bust came, the FBI revealed these AN0M-enabled phones had been used in 90 countries. Hundreds of people around the globe have been arrested, including over 100 arrests in New Zealand.

What does this all mean? The moral of the story is that criminals also make foolish decisions that impact on their privacy and the privacy of others. While this is a good thing for the rest of us, it also serves as a warning that the online world is a minefield full of false promises and traps for the unwary.