Skating on Stilts

219. Rise and Fall of the Silk Road

This episode features a conversation with Nick Bilton, author of American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road.  His book, out today in paperback, tells the story of Ross Ulbricht, the libertarian who created the hidden Tor site known as the Silk Road, and rode it to massive wealth, great temptation, and, finally, a life sentence. 

It’s a fine read in its own right, but for those who know the federal government, the most entertaining parts concern the investigators who bring Ulbricht down.  They all have ambitions and flaws that mirror the stereotypes of their agencies, even -- or perhaps especially -- when the agents go bad. It’s got everything – sales of body parts, murder (maybe!), rogue cops, turf fights, and justice in the end. 

Sadly, I predict this episode will generate more hate mail than any other.  Why?  You’ll have to listen to find out.  Feel free to question my judgment with emails to [email protected]

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As always, The Cyberlaw Podcast is open to feedback. Send your questions and suggestions for topics or interview candidates to [email protected] or leave a message at +1 202 862 5785. Remember: If your suggested interviewee appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

218: In Mugshots.com, California crazy meets European crazy

In this episode, Markham Erickson highlights the Mugshots.com prosecution. The site had a loathsome business model, publishing mugshots for free and charging hundreds of bucks to people who wanted the record of their arrests taken down. Now the owners are being prosecuted in a case that combines the worst of European crazy (“surely criminals have a right to be forgotten”) and California crazy (“profits are being earned here – surely that calls for a criminal investigation”). Markham explains why this may be a hard case for California to win – and then joins me in expressing schadenfreude for the owners, whose mugshots are even now spread all across the internet.

Meanwhile, the ZTE mess gets messier as Congress moves to block President Trump’s proposed sanctions relief. Democrats are joining national security Republicans to move legislation on the topic. Who says President Trump is the divider-in-chief?

Michael Vatis digs into the FBI’s latest high-profile problem: it grossly overstated the number of encrypted phones it encountered last year. Was it a mistake or a misrepresentation? Our panel leans toward mistake.

Michael and I also criticize President Trump’s decision to dump government security for his phone. Michael reminds us of the President’s scathing treatment of Hillary Clinton’s insecure email server and asks why an insecure cell phone is different.

And in a new feature that we still haven’t made up our mind about, we do a lightning round of stories we couldn’t get to:

• GDPR has arrived at last, and typically, the European Parliament isn’t ready.
• Suspected CIA leaker Joshua Schulte was busted for kiddie porn but should have been arrested for stone stupidity.
• Kaspersky sets up shop in Switzerland; will that save the business? I’m skeptical.
• Ecuador’s budget for protecting Assange ran into the millions of dollars, and it looks as though he may be on the street any minute now. A bad week for hackers and leakers. ;-)
• Germany’s misbegotten effort to tame hate on Facebook is going to end up censoring what Americans can read. When will Congress act to preserve the first amendment from other governments?
• China’s bragging that its social credit system has blocked people from 11 million flights already; when will that system be expanded to everyone in the hacked OPM files?
• In a declassified report, a federal commission treats EMP attacks as a serious threat, not the stuff of an Alex Jones rant, as elite opinion seems to think.
• There’s a circuit split regarding border cell phone searches.
• The NTSB has issued a gobsmacking preliminary report on the fatal crash involving Uber’s autonomous vehicle.

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As always, The Cyberlaw Podcast is open to feedback. Send your questions and suggestions for topics or interview candidates to [email protected] or leave a message at +1 202 862 5785. Remember: If your suggested interviewee appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

217. Blockchain takes over the podcast

In our 217th episode of The Cyberlaw Podcast, the blockchain and cryptocurrency team seizes control of the podcast again.

Alan Cohn hosts another of the podcast’s periodic deep dives into all things blockchain and cryptocurrency to discuss recent regulatory developments and the current state of play of the industry.

Our episode begins by looking at the Department of Treasury’s letter regarding initial coin offerings (“ICOs”). Jack Hayes tells us the key takeaways from the letter, including that persons engaged in ICOs could be considered a Money Transmitter under FinCEN’s regulations. Not only does the letter address companies based in the US that are issuing tokens, but also those based outside of the US that may have a substantial part of their business in the US or be issuing tokens to US persons. The idea that FinCEN can reach outside of the US border is not a new one. Last summer we saw a civil enforcement action against BTC-e, a foreign cryptocurrency exchange.

Jack and Alan also discuss the New York Attorney General’s recent voluntary transparency questionnaire sent to both US and non-US cryptocurrency exchanges. New York has seen its fair share of controversy with respect to cryptocurrency with the implementation of the BitLicense and the resulting exodus of a number of cryptocurrency companies.

Lisa Zarlenga provides an expert overview of the Internal Revenue Service’s (“IRS”) activity in the space starting with IRS Notice 2014-21. For tax purposes, convertible virtual currency (“CVC”) is treated as property, which means that every time you buy or sell CVC you are engaging in a taxable event and need to report capital gains or losses. The Notice did not provide much guidance on accounting for and determining basis of cryptocurrency. Lisa also discusses whether exchanging one cryptocurrency for another cryptocurrency is a like-kind exchange and how the 2018 Tax Reform Bill changes things. With the increasing popularity of airdrops, Lisa and Alan tell us about the tax treatment of tokens received during an airdrop.

Chelsea Parker discusses trends coming out of New York Blockchain Week 2018. Consensus 2018 was three times bigger than Consensus 2017 and there were almost three dozen other official conferences and events that were part of NY Blockchain Week. Needless to say, interest in blockchain appears to be at an all-time high, and there was a particularly high international presence. Government officials from countries such as Gibraltar and Bermuda highlighted their proactive steps to implement regulation while still encouraging innovation and protecting consumers. This idea of balancing regulation while still encouraging innovation was a common theme across panels.

Alan highlights Steptoe’s panel “Blockchain in Supply Chain, Navigating the Legal Waters” and the key questions discussed during Alan Cohn and Lisa Zarlenga’s presentations on the tax treatment of digital currencies and tokens at the Accounting Blockchain Coalition’s conference. Finally, the panelists highlight where they see the industry going next in terms of adoption and regulation. Lisa discusses the possibility of additional guidance from the IRS while Jack discusses the future of sovereign cryptocurrencies and the resulting regulatory challenges.

As always The Cyberlaw Podcast is open to feedback. Send your questions, suggestions for interview candidates or topics to [email protected] or leave a message at +1 202 862 5785.

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Episode 216: Every President gets the White House he deserves

The Cyberlaw Podcast has now succumbed to an irresistible media trend: We begin the episode with a tweet from President Trump. In this one, he promises to get ZTE “back in business, fast.” Paul Rosenzweig and Nick Weaver provide the backstory, and a large helping of dismay, at the President’s approach to the issue.

I question the assumption that this will make the life of Chinese telecom equipment makers easier in the US. If anything it could be worse. The 2019 NDAA being drafted in the House will make it very difficult for telecom companies that do business with the Pentagon to rely on Chinese (or Russian) equipment. If anything, the President probably ensured a unanimous Democratic vote for the measure.

The cyber coordinator position in the White House is on the endangered list. Paul explains why it should survive. His take is not completely snark-free. Summing up the first two stories, I suggest that it proves the maxim (which, come to think of it, might be my maxim) that every President gets the White House he deserves.

Nick explains how badly American democracy could be harmed by a relatively trivial Russian (or Iranian, or North Korean) cyberattack on voter registration databases later in 2018. Indeed, they had a chance to launch such an attack in 2016, according to the Senate Intelligence Committee. This is an avoidable disaster if election officials take action now, I point out, but Paul doubts they will.

Paul and I lament the insouciance and ahistoricity of the Fourth Circuit’s ruling adding half a dozen new judicial constraints to border searches of cell phones.

Speaking of cyberattacks, you’d better buckle up, because Iranian retribution for US withdrawal from the Joint Comprehensive Plan of Action is probably being prepared as you read this. And according to a highly educational Recorded Future/Insikt report, Iran’s semi-privatized hacking ecosystem is likely to err on the side of escalation.

The Iranians aren’t the only ones upping their game. Nick summarizes an excellent Crowdstrike report on the new sophistication of Nigerian scammers.

We close with Nick’s dissection of the troubling code decisions underlying a pedestrian death caused by Uber’s autonomous vehicle. 

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As always The Cyberlaw Podcast is open to feedback. Send your questions, suggestions for interview candidates or topics to [email protected] or leave a message at +1 202 862 5785.

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Episode 215: The Zelig of Hacking Back

Our interview is with Nick Schmidle, staff writer for the New Yorker. His report on cybersecurity work that goes to the edge of the law and beyond turns up some previously unreported material, including the tale of Shawn Carpenter, a cybersecurity researcher with a talent for showing up in all the best hackback stories.

In the news, Jamil Jaffer reports on domain fronting, a weird form of protection for people hiding the site they’re connecting to behind some bland Google or AWS site. Some of those people are dissidents in authoritarian lands; many are authoritarian governments hacking secrets out of corporate networks.  In any event, domain fronting is disappearing before it had even made an impression on the public’s mind. I say good riddance, bolstered in my opinion by the wailing of professional privacy groups that, do I have to remind you?, don’t care about your security at all.

The Supreme Court takes a case of great interest to social media and other tech firms who attract class actions. Jennifer Quinn-Barabanov explains the law and the likely outcome. I mostly quibble about how to pronounce “cy pres.”

Move fast and break things probably isn’t the best motto if the thing you’re likely to break is, um, you. Megan Reiss talks about the death of Aaron Traywick, and the risks of bringing the hacking ethic to genetic engineering.

Europol and a host of allies were bragging last week about taking down ISIS’s online recruiting and propaganda infrastructure. But this week they’ve had to admit that ISIS is back on line. Jamil and I talk about what lessons can be drawn from cyber-whac-a-molery.

For Chinese phone makers, it never rains but it pours. Fresh off a ban on Chinese phones from US military retail stores, there may be even more pain in the works for ZTE and other Chinese mobile infrastructure providers.

Finally, Megan Reiss and I dig deep into Rep. Ruppersberger’s thoughtful take on cybersecurity, information sharing and DHS.

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As always The Cyberlaw Podcast is open to feedback. Send your questions, suggestions for interview candidates or topics to [email protected] or leave a message at +1 202 862 5785.

Download the 215th Episode (mp3).

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Episode 214: Dumbest privacy issue of the decade?

This episode of the Cyberlaw Podcast features a new technology-and-privacy flap: The police finally catch a sadistic serial killer, and the press can’t stop whining about DNA privacy. I argue that DNA privacy is in the running for Dumbest Privacy Issue of the Decade, in which it turns out that privacy is all about making sure the police can’t use your data to catch killers. Paul Rosenzweig refuses to take the other side of that debate.

Ray Ozzie has released a technical riposte to the condescending Silicon Valley claim that math proves the impossibility of securely accommodating law enforcement access. Paul and I muse on the aftermath, in which Silicon Valley may actually have to try winning the debate rather than claiming that there is none.

Jim Lewis and I note the likelihood that ZTE is contemplating litigation against the US ban on technology sales to the company.  What really bothers Jim, though, is the likelihood that the US sanction will accelerate China’s move to complete self-sufficiency in the technology sphere. That’s something that neither the US government nor US industry is really ready for.

The House intel committee’s report on Russia and the election is out. It finds no scandal, other than Russia’s shocking attack on our institutions, though it does criticize “ill-advised” action by Trump campaign officials. The minority report says that the investigation should have gone on even longer. Paul and I have different takes on the value of the exercise.

Gen. Paul Nakasone is about to take over at NSA, after a remarkably easy ride to confirmation. Jim Lewis finds comfort and diversion in the effort of privacy campaigners to add some bumps to the general’s road.

Finally, Paul and I debate whether Donald J. Trump Jr. committed a Computer Fraud and Abuse Act felony by logging on to an opposition website with “guessed” credentials supplied by Wikileaks.  Actually, there isn’t much debate about whether that’s a crime, but I question whether criminalizing such a trivial violation of network mores raises more questions about the CFAA than about DJT Jr.

And a bit of special pleading: How can there possibly not be any reviews of The Cyberlaw Podcast on Stitcher Radio?  Yet it appears to be true.  Please get out there and comment, loyal Stitcher listeners to the podcast!

The Cyberlaw Podcast is hiring a part-time intern for our Washington, DC offices.

As always The Cyberlaw Podcast is open to feedback. Send your questions, suggestions for interview candidates or topics to [email protected] or leave a message at +1 202 862 5785.

Download the 214th Episode (mp3).

Subscribe to The Cyberlaw Podcast here. We are also on iTunes, Pocket Casts, and Google Play (available for Android and Google Chrome)!