When the FBI successfully breached a crypto wallet held by the Colonial Pipeline hackers by following the money trail on bitcoin’s blockchain, it was a wake-up call for any cyber criminals who thought transacting in cryptocurrency automatically protected them from scrutiny.
One of the core tenets of bitcoin is that its public ledger, which stores all token transactions in its history, is visible to everyone. This is why more hackers are turning to coins like dash, zcash, and monero, which have additional anonymity built into them.
Monero, in particular, is increasingly the cryptocurrency of choice for the world’s top ransomware criminals.
“The more savvy criminals are using monero,” said Rick Holland, chief information security officer at Digital Shadows, a cyberthreat intelligence company.
Created in 2014
Monero was released in 2014 by a consortium of developers, many of whom chose to remain anonymous. As spelled out in its white paper, “privacy and anonymity” are the most important aspects of this digital currency.
The privacy token operates on its own blockchain, which hides virtually all transaction details. The identity of the sender and recipient, as well as the transaction amount itself, are disguised.
Because of these anonymity features, monero allows cyber criminals greater freedom from some of the tracking tools and mechanisms that the bitcoin blockchain offers.
“On the bitcoin blockchain, you can see what wallet address transacted, how many bitcoin, where it came from, where it’s going,” explained Fred Thiel, former chairman of Ultimaco, one of the largest cryptography companies in Europe, which has worked with Microsoft, Google and others on post-quantum encryption.
“With monero, [the blockchain] obfuscates the wallet address, the amount of the transactions, who the counter-party was, which is pretty much exactly what the bad actors want,” he said.
While bitcoin still dominates ransomware demands, more threat actors are starting to ask for monero, according to Marc Grens, president of DigitalMint, a company that helps corporate victims pay ransoms.
“We’ve seen REvil…give discounts or request payments in monero, just in the past couple months,” continued Holland.
Monero was also a popular choice on AlphaBay, a massive underground marketplace popular up until it was shut down in 2017.
“It’s almost like we’re seeing, at least from a cyber criminal perspective, a resurgence…in monero, because it has inherently more privacy than some of the other coins out there,” Holland said of monero’s recent rise in popularity among actors in the ransomware space.
There are, however, a few major barriers when it comes to the mainstreaming of monero.
For one, it’s not as liquid as other cryptocurrencies — many regulated exchanges have chosen not to list it due to regulatory concerns, explained Mati Greenspan, portfolio manager and Quantum Economics founder. “It certainly isn’t enjoying as much from the recent wave of institutional investments,” he said.
In practice, that means that it’s harder for cyber criminals to get paid directly in the currency.
“If you’re a corporation and you want to acquire a bunch of monero to pay somebody, it’s very hard to do,” Thiel told CNBC.
The digital currency could also be more vulnerable to regulation at its on-and-off-ramps, which is the bridge between fiat cash and crypto tokens.
“I would wager to say the U.S. and other regulators are going to shut them [monero] down pretty hard,” said Thiel.
One way they could go about that: telling an exchange that if they list monero, they risk losing their license.
But while the U.S. government can indeed keep monero at bay by marginalizing liquidity points, Castle Island Ventures founding partner Nic Carter believes that markets which allow peer-to-peer transfers of monero to fiat will always be hard to regulate.
There’s also nothing to keep hackers within U.S. jurisdiction. Criminals could easily choose to carry out all of their transactions overseas, in places that aren’t subject to the kind of controls American regulators might put in place.
Bitcoin still rules ransomware
Cyber insurance is another reason why bitcoin is still the currency of choice for most ransomware attacks.
“Insurance is so important in this space, and insurers often refuse to reimburse a ransom payment if it’s been in monero,” said former CIA case officer Peter Marta, who now advises companies about cyber risk management as a partner with law firm Hogan Lovells.
“One of the things that insurers will always ask for is what type of due diligence the victim company conducted, before making the payment…to try to minimize the chance that the payment goes to an entity on the sanctions list,” explained Marta.
Traceability is more easily accomplished with bitcoin, given that its blockchain lays bare transaction amounts and the addresses of both the sender and recipients taking part in the exchange. There is also an established infrastructure already in place for officials to monitor these transactions.
Authorities keep lists of bitcoin wallets, which are tied to different sanctions regimes.
While monero does offer a greater degree of privacy over bitcoin, Holland points out that threat actors have mastered certain techniques to anonymize transactions in bitcoin, in order to obscure the chain of custody.
He says that cyber criminals often turn to a mixing or tumbling service, where they can combine the illicit funds with clean crypto to essentially make a new type of bitcoin, at which point, they turn to currency swaps.
“Just like you would do dollars to pounds…they may go bitcoin, to monero, then back to bitcoin, and then get a bitcoin ATM card, where they can just cash out dollars with it,” explained Holland.
So even though bitcoin’s blockchain is public, there are still ways to make it difficult for investigators to trace transactions to their ultimate destination.
OpenAI tender offer is on track for January despite leadership fracas, sources say
Sam Altman, CEO of OpenAI participates in the “Charting the Path Forward: The Future of Artificial Intelligence” at the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week in San Francisco, California, on November 16, 2023.
Andrew Caballero-Reynolds | AFP | Getty Images
OpenAI’s tender offer, which would allow employees to sell shares in the start-up to outside investors, remains on track despite the leadership tumult and board shuffle, two people familiar with the matter told CNBC.
The tender offer will value OpenAI at the same levels as previously reported in October, around $86 billion, and is being led by Josh Kushner’s Thrive Capital, according to the people familiar, who spoke anonymously to discuss private communications freely.
The round and previously reported valuation were jeopardized by Sam Altman’s temporary ouster earlier in November, but his return cleared the way for the tender offer to proceed.
Tender offers do not involve the issuance of new equity. Instead, Thrive and other involved investors will buy existing units belonging largely to employees, giving them liquidity. The $86 billion round is three times OpenAI’s previous fundraise in April, which valued the company at around $28 billion.
Another person familiar told CNBC that the round had been extended to January 5.
The extension of the tender offer comes after a rollercoaster couple of weeks for the company. OpenAI’s nonprofit board argued that Altman “was not consistently candid in his communications with the board” as CEO, and his subsequent departure incited uproar from investors and employees alike, especially after Microsoft CEO Satya Nadella said Altman and OpenAI president Greg Brockman would lead a new AI lab under Microsoft. Employees threatened to walk en masse, signing an open letter and commenting in support of Altman on social media, which led in part to a significant turnover of OpenAI’s board.
On Wednesday, OpenAI announced Altman and Brockman’s official return to their previous roles, along with a new board, including former Salesforce co-CEO Bret Taylor, former Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo.
Microsoft obtained a non-voting board observer position, OpenAI said Wednesday. Nadella had previously told CNBC that new governance would be required at the startup. Microsoft holds a 49% stake in OpenAI.
Not all major backers will receive a director position. Tiger Global will not likely pursue a board seat, a person familiar with the matter said, in line with the firm’s longstanding practice. OpenAI’s other major backers include Founders Fund, Sequoia Capital and, following the completion of the tender offer, Thrive Capital.
Sequoia Capital declined to comment on whether it would be involved in the upcoming tender. Founders Fund will not participate in the tender offer either, a person familiar with the firm said. A spokesperson for Thrive declined to comment beyond saying it remained “committed” to OpenAI.
OpenAI did not immediately respond to CNBC’s request for comment.
— CNBC’s Ari Levy & Jordan Novet contributed to this report.
Elon Musk hypes Tesla Cybertruck at deliveries event in Austin
Tesla CEO Elon Musk took the stage to reveal details about the company’s new and unconventional Cybertruck pickup on Thursday in Austin, one day after he appeared in a bizarre interview at the DealBook Summit in New York. At that earlier event, Musk boasted, “It will be the biggest product launch of anything by far on Earth this year.”
At the event in Austin, Musk said the Cybertruck’s hard steel body was bulletproof, and that its windows were “rock proof.” He said it could tow over 11,000 pounds, accelerate from 0 to 60 miles per hour in 2.6 seconds, and features a “super-tough” composite bed that is six feet long and four feet wide. Musk added that the vehicle would “change the look of the roads” and that the “future finally looks like the future.”
Musk then presented several newly produced trucks to customers, who drove away in them.
In an October earnings call, Musk struck a more cautious note saying, “There will be enormous challenges in reaching volume production with the Cybertruck, and then in making the Cybertruck cashflow positive.” He also said at that time, “we dug our own grave with Cybertruck,” pointing out “unique challenges” in producing and bringing that truck to market.
According to Tesla’s website, the company will sell its base model rear-wheel drive version of the Cybertruck for an estimated $60,990 and a “Cyberbeast” version for $99,990, with deliveries for both of these trims starting next year. Tesla also plans to sell an all-wheel drive version of the Cybertruck for $79,900 starting in 2025, per the company website.
The base model rear-wheel drive Cybertruck is expected to have a 250-mile range battery and accelerate from 0 to 60 miles per hour in 6.5 seconds, and the all-wheel drive Cybertruck is expected to have a range of 340 miles and go 0 to 60 miles per hour in 4.1 seconds with a top speed of 112 miles per hour. The highest-end Cyberbeast would have the fastest acceleration and a range of 320 miles, estimated, with a top speed of 130 miles per hour.
Tesla first unveiled the Cybertruck — with its angular and unpainted hard steel body — in November 2019. It had previously said production of the vehicle would start in 2021, and the truck would sell at the entry-level price of $39,900 for a rear-wheel-drive version, and around $69,000 for a highest-spec, tri-motor version– far more affordable than the prices Tesla listed on Thursday.
The company began taking $100 refundable “reservations” for the Cybertruck after it was unveiled, and the company said it received more than 1 million reservations since its debut. (Customers must now put down $250 to move ahead with a Cybertruck order, per the Tesla website.)
While Tesla unveiled its Cybertruck design in 2019, it only began early Cybertruck production in July this year.
Meanwhile, competitors including Ford, General Motors and Rivian began to sell their more utilitarian electric pickups. Earlier this week, Rivian, which only manufactures battery electric vehicles (like Tesla) started to offer a leasing option for select models of its all-electric R1T pickup truck.
The U.S. electric pickup truck market has not expanded as quickly as some thought when the Cybertruck was initially revealed. Several start-ups have either now brought vehicles to market or did with little success such as Lordstown Motors. Both GM and Ford have announced plans to scale back, postpone or cancel EV products and investments, including some related to EV trucks.
Tesla shares closed lower on Thursday by about 2% and were flat after hours.
— CNBC’s Mike Wayland contributed to this report.
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X CEO Linda Yaccarino addresses Musk’s ‘go f—- yourself’ comment to advertisers
Linda Yaccarino: CEO of X speaking with CNBC’s Sara Eisen on Aug. 10th, 2023.
X CEO Linda Yaccarino addressed the explicit comments Elon Musk hurled at advertisers during what she called a “wide ranging” and “candid” interview with CNBC’s Andrew Ross Sorkin at the 2023 DealBook Summit in New York Wednesday.
“If somebody’s going to try to blackmail me with advertising? Blackmail me with money? Go f—yourself. Go. F—. Yourself. Is that clear?” X owner and CTO Musk said during the interview on Wednesday.
Yaccarino described Musk’s comments as an “explicit point of view about our position.”
“We’re a platform that allows people to make their own decisions,” Yaccarino wrote on X, formerly known as Twitter, late Wednesday night. “And here’s my perspective when it comes to advertising: X is standing at a unique and amazing intersection of Free Speech and Main Street — and the X community is powerful and is here to welcome you. To our partners who believe in our meaningful work — Thank You.”
Disney, Apple, IBM, Comcast, Warner Bros Discovery, Paramount Global and Lions Gate Entertainment pulled ads from X earlier in November after Musk said he agreed with a social media post accusing “Jewish communities” of pushing “hatred against whites.” His comments drew condemnation from The White House, which blasted Musk for promoting “antisemitic and racist hate.”
During the interview, Musk called out Disney’s CEO Bob Iger, who also spoke at DealBook, and said “Hi Bob!”
Yaccarino was hired as X’s CEO in May. She was previously the global advertising chief of NBCUniversal. She has been tasked with bringing advertisers back to X following Musk’s takeover of the company in 2022. In August, she said brands were returning to the platform and should feel comfortable placing ads.
Musk apologized for his inflammatory comments on X during the interview and told Sorkin that a particular post, where agreed with an antisemitic conspiracy theory, was “one of the most foolish if not the most foolish thing I’ve ever done on the platform.”
“I’m sorry for that tweet or post,” he said.
X responded to CNBC’s request for comment with an automated response. Disney, Apple and IBM did not immediately respond.
CNBC’s Lora Kolodny contributed to this report.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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