The strange journey of Lin Rui-siang, the 23-year-old accused of running the Incognito black market, extorting his own site’s users—and then refashioning himself as a legit crypto crime expert.

Two months ago, Lin Rui-siang, a young Taiwanese man wearing black-rimmed glasses and a white polo shirt, stood behind a lectern emblazoned with the crest of the St. Lucia police, giving a presentation titled “Cyber Crime and Cryptocurrency” in nearly fluent English to a roomful of cops from the tiny Caribbean country.

The St. Lucia government would later issue a press release lauding the success of Lin's training course, which had been organized by the Taiwanese embassy, where Lin worked as a diplomatic specialist in IT. The statement boasted that 30 officers had learned “nuances of the dark web" and cryptocurrency tracing skills from Lin, who had “used his professional background and qualifications in the field" to teach them how to better combat cybercrime.

Only earlier this week did it become clear exactly what Lin's “professional background and qualifications in the field” allegedly entailed, seemingly unbeknownst to either his Taiwanese employers or his St. Lucian law enforcement trainees. For nearly four years, according to the US Justice Department, 23-year-old Lin ran a dark-web drug market called Incognito that authorities say enabled the sale of at least $100 million worth of narcotics, ranging from MDMA to heroin for cryptocurrencies including bitcoin and monero. That was before Lin's alleged theft of his own users' funds earlier this year and then his arrest last week by the FBI in New York's JFK airport.

Over his years working as a cryptocurrency-focused intern at Cathay Financial Holdings in Taipei and then as a young IT staffer at St. Lucia's Taiwanese embassy, Lin allegedly lived a double life as a dark-web figure who called himself “Pharoah" or “faro”—a persona whose track record qualifies as remarkably strange and contradictory even for the dark web, where secret lives are standard issue. In his short career, Pharoah launched Incognito, built it into a popular crypto black market with some of the dark web's better safety and security features, then abruptly stole the funds of the market's customers and drug dealers in a so-called “exit scam” and, in a particularly malicious new twist, extorted those users with threats of releasing their transaction details.

During those same busy years, Pharoah also launched a web service called Antinalysis, designed to defeat crypto money laundering countermeasures—only for Lin, who prosecutors say controlled that Pharoah persona, to later refashion himself as a crypto-focused law enforcement trainer. Finally, despite his supposed expertise in cryptocurrency tracing and digital privacy, it was Lin's own relatively sloppy money trails that, the DOJ claims, helped the FBI to trace his real identity.

An April post on Lin Rui-siang’s LinkedIn account about his cybercrime and cryptocurrency training course for police in St. Lucia.

Among all those incongruities, though, it's the image of Lin giving his cryptocurrency crime training in St. Lucia—which Lin proudly posted to his LinkedIn account—that shocked Tom Robinson, a cofounder of the blockchain analysis firm Elliptic, who has long tracked Lin's alleged Pharoah alter ego. “This is an alleged dark-net market admin standing in front of police officers, showing them how to use blockchain analytics tools to track down criminals online,” says Robinson. “Assuming he is who the FBI says he is, it's incredibly ironic and brazen.”

**Pharoah the Kingpin—and Extortionist**

Lin has been charged with not only narcotics conspiracy and money laundering but also running a “continuing criminal enterprise,” the so-called “kingpin statute” reserved for organized crime leaders who allegedly oversaw at least five employees. For that charge alone, he faces a potential life sentence.

In the DOJ's criminal complaint against Lin, it points to a handwritten document the FBI pulled from his email, which appears to sketch out a flow chart for a dark-web market's mechanics. The complaint's FBI affidavit says Lin emailed himself the sketch in March 2020 when he was at most 19 years old. It describes functionality such as how “vendors” and “buyers” would register, make purchases, and encrypt shipping addresses. Seven months later, Lin would allegedly launch Incognito Market.

A sketch of a dark-web market's infrastructure that Lin emailed to himself eight months before allegedly creating Incognito Market, according to the DOJ.

According to the FBI, the market took nearly a year to catch on, with virtually no sales during that time. But by late 2021, Incognito had started to attract users, and by the middle of 2022, the market had drawn enough vendors and sellers to generate more than $1.5 million a month in sales.

A 2022 Twitter thread about Incognito posted by Eileen Ormsby, an author of several dark-web-focused books including _The Darkest Web_, shows how the market by that time had added features that may have helped it to catch the attention of security- and safety-conscious users. It required that new users demonstrate they could use the encryption tool PGP before entering the market, prompted them to take a security quiz, allowed buyers to spend the more privacy-focused cryptocurrency monero as well as bitcoin, encouraged dealers to post results from a fentanyl test to certify their product was “fent free,” and even experimented with democratic voting for market-wide decisions.

By the summer of 2023, Incognito had spiked in popularity and was approaching $5 million a month in sales. Then in March of this year, the site suddenly dropped offline, taking all the funds stored in buyers' and sellers' wallets with it. A few days later, the site reappeared with a new message on its homepage. “Expecting to hear the last of us yet?” it read. “We got one final little nasty surprise for y'all.”

The message explained that Incognito was now essentially blackmailing its former users: It had stored their messages and transaction records, it said, and added that it would be creating a “whitelist portal” where users could pay a fee—which for some dealers would later be set as high as $20,000—to remove their data before all the incriminating information was leaked online at the end of this month. “YES THIS IS AN EXTORTION!!!” the message added.

In retrospect, Ormsby says that the site's apparent user-friendliness and its security features were perhaps a multiyear con laying the groundwork for its endgame, a kind of user extortion never seen before in dark-web drug markets. “Maybe the whole thing was set up to create a false sense of security,” Ormsby says. “The extorting thing is completely new to me. But if you've lulled people into a sense of security, I guess it's easier to extort them.”

In total, Incognito Market promised to leak more than half a million drug transaction records if buyers and sellers didn't pay to remove them from the data dump. It's still not clear whether the market's administrator—Lin, according to prosecutors, whom they accuse of personally carrying out the extortion campaign—planned to follow through on the threat: He appears to have been arrested before the deadline set for the victims of the Incognito blackmail.

**An Expert in ‘Anti Anti-Money Laundering’**

At the same time the FBI says Lin was laying the groundwork for this double-cross, he also appears to have briefly tried engineering an entirely different scheme. In the summer of 2021, during Incognito Market's relatively quiet first year, Lin's alleged alter ego, Pharoah, launched a service called Antinalysis, a website designed to analyze blockchains and let users check—for a fee—whether their cryptocurrency could be connected to criminal transactions.

In a post to the dark-web market forum Dread, Pharoah made clear that Antinalysis was designed not to help anti-money-laundering investigators, but rather those who sought to evade them—presumably including his own dark-web market's users. “Our goals do not lie in aiding the surveillance autocracy of state-sponsored agencies,” Pharoah's post read. “This service is dedicated to individuals that have the need to possess complete privacy on the blockchain, offering a perspective from the opponent's point of view in order for the user to comprehend the possibility of his/her funds getting flagged down under autocratic illegal charges.”

After independent cybersecurity reporter Brian Krebs wrote about the Antinalysis service in August 2021, describing it as an “anti anti-money laundering service for crooks,” Pharoah posted another message complaining that Antinalysis had lost access to its blockchain data source, which Krebs had identified as the anti-money-laundering tool AMLBot, and that it would be going offline. “Stay posted and fuck LE," Pharoah wrote, using the abbreviation LE to mean “law enforcement.” Antinalysis eventually returned, however, and pivoted last year to acting instead as a service for swapping bitcoin for monero and vice versa.

Meanwhile, Lin appears to have maintained his obsession with cryptocurrency tracing and blockchain analysis: His final LinkedIn post last week before his arrest in New York announced that he had become a certified user of Reactor, the crypto tracing tool sold by blockchain analysis firm Chainalysis. “I'm excited to share that I've completed Chainalysis's new qualification: Chainalysis Reactor Certification (CRC)!” Lin wrote in Mandarin. His last X post shows a Chainalysis diagram of money flows between dark-web markets and cryptocurrency exchanges.

It's not clear whether Lin obtained his Chainalysis certification to bolster a new career training law enforcement in blockchain analysis or, if US prosecutors are to be believed, to advance his previous alleged career as a dark-web criminal. But it raises the troubling possibility that a former dark-web kingpin—one who was still extorting his own users—was perhaps playing both sides of the crypto tracing game, says Elliptic's Tom Robinson.

“There’s a larger issue here about bad actors accessing blockchain analytics tools,” says Robinson. “That is a potentially risky situation, where someone who’s in the process of laundering proceeds of crime can check in commercially available tools whether they have laundered them such that they can get away with it.” Running certain checks in those tools might even allow someone to determine if they're being actively investigated by law enforcement, Robinson says.

WIRED reached out to Chainalysis to ask about Lin's Reactor certification and what sort of safeguards prevent criminals from using the company's software, but the company declined to comment.

If Lin did hope to evade law enforcement by becoming an expert in crypto tracing himself, he was far too late to avoid creating his own blockchain trail of evidence: In January of this year, the FBI says it somehow identified a central Incognito server and obtained a search warrant for its contents. That allowed investigators to identify a bitcoin wallet stored there, which the FBI says Lin had also carelessly used to pay web registrar Namecheap for four web domains—including one that tracked which dark-web markets were online or down—and register them under his own name.

Although the FBI says Lin tried to swap his bitcoins for harder-to-trace monero before cashing out the cryptocurrency at an exchange, the criminal complaint points to timing and amount correlations that nonetheless allowed the FBI to follow his funds to a crypto exchange where he allegedly liquidated the dirty funds. That exchange account, too, was registered in Lin's real name, according to the DOJ.

The operational security mistakes the FBI describes suggest that, regardless of which side of the cryptocurrency cat-and-mouse game Lin intended to end up on, he was far from a criminal mastermind. His brief, strange journey from alleged kingpin to crypto crime expert ultimately provides plenty of lessons to criminals and law enforcement alike—though probably not the ones he intended.

He Trained Cops to Fight Crypto Crime—and Allegedly Ran a $100M Dark-Web Drug Market

Thousands of fingerprints and facial images linked to police in India have been exposed online. Researchers say it’s a warning of what will happen as the collection of biometric data increases.

Thousands of law enforcement officials and people applying to be police officers in India have had their personal information leaked online—including fingerprints, facial scan images, signatures, and details of tattoos and scars on their bodies. If that wasn’t alarming enough, at around the same time, cybercriminals have started to advertise the sale of similar biometric police data from India on messaging app Telegram.

Last month, security researcher Jeremiah Fowler spotted the sensitive files on an exposed web server linked to ThoughtGreen Technologies, an IT development and outsourcing firm with offices in India, Australia, and the US. Within a total of almost 500 gigabytes of data spanning 1.6 million documents, dated from 2021 until when Fowler discovered them in early April, was a mine of sensitive personal information about teachers, railway workers, and law enforcement officials. Birth certificates, diplomas, education certificates, and job applications were all included.

Fowler, who shared his findings exclusively with WIRED, says within the heaps of information, the most concerning were those that appeared to be verification documents linked to Indian law enforcement or military personnel. While the misconfigured server has now been closed off, the incident highlights the risks of companies collecting and storing biometric data, such as fingerprints and facial images, and how they could be misused if the data is accidentally leaked.

“You can change your name, you can change your bank information, but you can't change your actual biometrics,” Fowler says. The researcher, who also published the findings on behalf of Website Planet, says this kind of data could be used by cybercriminals or fraudsters to target people in the future, a risk that’s increased for sensitive law enforcement positions.

Within the database Fowler examined were several mobile applications and installation files. One was titled “facial software installation,” and a separate folder contained 8 GB of facial data. Photographs of people’s faces included computer-generated rectangles that are often used for measuring the distance between points of the face in face recognition systems.

There were 284,535 documents labeled as Physical Efficiency Tests that related to police staff, Fowler says. Other files included job application forms for law enforcement officials, profile photos, and identification documents with details such as “mole at nose” and “cut on chin.” At least one image shows a person holding a document with a corresponding photo of them included on it. “The first thing I saw was thousands and thousands of fingerprints,” Fowler says.

Prateek Waghre, executive director of Indian digital rights organization Internet Freedom Foundation, says there is “vast” biometric data collection happening across India, but there are added security risks for people involved in law enforcement. “A lot of times, the verification that government employees or officers use also relies on biometric systems,” Waghre says. “If you have that potentially compromised, you are in a position for someone to be able to misuse and then gain access to information that they shouldn’t.”

It appears that some biometric information about law enforcement officials may already be shared online. Fowler says after the exposed database was closed down he also discovered a Telegram channel, containing a few hundred members, which was claiming to sell Indian police data, including of specific individuals. “The structure, the screenshots, and a couple of the folder names matched what I saw,” says Fowler, who for ethical reasons did not purchase the data being sold by the criminals so could not fully verify it was exactly the same data.

A Leak of Biometric Police Data Is a Sign of Things to Come

Ultra-wideband radio has been heralded as the solution for “relay attacks” that are used to steal cars in seconds. But researchers found Teslas equipped with it are as vulnerable as ever.

For at least a decade, a car theft trick known as a “relay attack” has been the modern equivalent of hot-wiring: a cheap and relatively easy technique to steal hundreds of models of vehicles. A more recent upgrade to the radio protocol in cars' keyless entry systems known as ultra-wideband communications, rolled out to some high-end cars including the latest Tesla Model 3, has been heralded as the fix for that ubiquitous form of grand theft auto. But when one group of Chinese researchers actually checked whether it's still possible to perform relay attacks against the latest Tesla and a collection of other cars that support that next-gen radio protocol, they found that they're as stealable as ever.

In a video shared with WIRED, researchers at the Beijing-based automotive cybersecurity firm GoGoByte demonstrated that they could carry out a relay attack against the latest Tesla Model 3 despite its upgrade to an ultra-wideband keyless entry system, instantly unlocking it with less than a hundred dollars worth of radio equipment. Since the Tesla 3's keyless entry system also controls the car's immobilizer feature designed to prevent its theft, that means a radio hacker could start the car and drive it away in seconds—unless the driver has enabled Tesla's optional, off-by-default PIN-to-drive feature that requires the owner to enter a four-digit code before starting the car.

Jun Li, GoGoByte's founder and a longtime car-hacking researcher, says that his team's successful hack of the latest Model 3's keyless entry system means Tesla owners need to turn on that PIN safeguard despite any rumor that Tesla's radio upgrade would protect their vehicle. “It's a warning for the mass public: Simply having ultra-wideband enabled doesn't mean your vehicle won't be stolen,” Li says. “Using relay attacks, it's still just like the good old days for the thieves.”

Relay attacks work by tricking a car into detecting that an owner's key fob—or, in the case of many Tesla owners, their smartphone with an unlocking app installed—is near the car and that it should therefore unlock. Instead, a hacker's device near the car has, in fact, relayed the signal from the owner's real key, which might be dozens or hundreds of feet away. Thieves can cross that distance by placing one radio device near the real key and another next to the target car, relaying the signal from one device to the other.

Thieves have used the relay technique to, for instance, pick up the signal of a car key inside a house where the owner is sleeping and transmit it to a car in the driveway. Or, as GoGoByte researcher Yuqiao Yang describes, the trick could even be carried out by the person behind you in line at a café where your car is parked outside. “They may be holding a relay device, and then your car may just be driven away,” Yang says. “That's how fast it can happen, maybe just a couple seconds.” The attacks have become common enough that some car owners have taken to keeping their keys in Faraday bags that block radio signals—or in the freezer.

Security researchers have long recommended that carmakers prevent relay attacks by developing keyless entry systems that more precisely measure the timing between a key fob or phone sending a signal and the car receiving it. So when Tesla rolled out its ultra-wideband radio upgrade to its keyless entry system, Tesla owners had every reason to think that the new protocol represented that long-awaited security fix. Ultra-wideband is, after all, capable of far more precise range measurement—it's the radio protocol that makes possible the distance tracking in Apple's AirTags, for instance.

In 2020, Tesla even wrote in a filing to the US Federal Communications Commission that it would be implementing ultra-wideband in its keyless entry systems, and that the ability to far more precisely measure the distance of a key fob or smartphone from a car would—or at least _could_—prevent its vehicles from being stolen via relay attacks. “The distance estimate is based on a Time of Flight measurement, which is immune to relay attacks,” Tesla's filing read. That document, first turned up by the Verge, led to widespread reports and social media comments suggesting that the upcoming ultra-wideband version of Tesla's keyless entry system would spell the end of relay attacks against its vehicles.

Yet the GoGoByte researchers found they were able to carry out their relay attack against the latest Tesla Model 3 over Bluetooth, just as they had with earlier models, from a distance as far as 15 feet between their device and the owner's key or phone. While the cars do appear to use ultra-wideband communications, they don't apparently use them for a distance check to prevent keyless entry theft.

Tesla has not yet responded to WIRED's requests for comment.

When the GoGoByte researchers shared their findings with Tesla earlier this month, the company's product security team immediately responded in an email dispelling any rumor that ultra-wideband, or “UWB,” was even intended to prevent theft. “This behavior is expected, as we are currently working on improving the reliability of UWB,” read Tesla's email in response to GoGoByte's description of its relay attack. “UWB ranging will be enforced when reliability improvements are complete.”

That answer shouldn't necessarily come as a surprise, says Josep Rodriguez, a researcher for security firm IOActive who has previously demonstrated relay attacks against Tesla vehicles. Tesla never explicitly said it had started using the ultra-wideband feature for security, after all—instead, the company has touted ultra-wideband features like detecting that someone's phone is next to the trunk to open it hands-free—and using it as a security check may still produce too many false positives.

“My understanding is that it can take engineering teams time to find a sweet spot where relay attacks can be prevented but also not affect the user experience,” Rodriguez wrote in an email to WIRED. “I wasn’t expecting that the first implementation of UWB in vehicles would solve the relay attacks.”

Automakers' slow adoption of ultra-wideband security features isn't just limited to Tesla, the GoGoByte researchers note. They found that two other carmakers whose keys support ultra-wideband communications are also still vulnerable to relay attacks. In one case, the company hadn't even written any software to implement ultra-wideband communications in its cars' locking systems, despite upgrading to hardware that supports it. (The researchers aren't yet naming those other carmakers since they're still working through the vulnerability disclosure process with them.)

Despite Teslas' high price tag and continuing vulnerability to relay attacks, some studies have found that the cars are far less likely to be stolen than other cars due to their default GPS tracking—though some car theft rings have targeted them anyway using relay attacks to sell the vehicles for parts.

GoGoByte notes that Tesla, unlike many other carmakers, does have the ability to push out over-the-air updates to its cars and might still use that feature to implement a relay attack fix via ultra-wideband communications. Until then, though, the GoGoByte researchers say they want Tesla owners to understand they're far from immune. “I think Tesla will be able to fix this because they have the hardware in place,” says Li. “But I think the public should be notified of this issue before they release the secure version.”

Until then, in other words, keep your Tesla's PIN-to-drive protection in place. Better that than keeping your keys and smartphone in the freezer—or waking up to find a vacant driveway and your car sold for parts.

Teslas Can Still Be Stolen With a Cheap Radio Hack—Despite New Keyless Tech

A WIRED investigation found thousands of Eventbrite posts selling escort services and drugs like Xanax and oxycodone—some of which the company’s algorithm recommended alongside addiction recovery events.

“Listings like these do not have a home on Eventbrite,” Chris Adams, the company’s head of platform product, tells WIRED in a statement. “This is a spam attack, coordinated by a few bad actors attempting to draw audiences to third-party sites.” Adams says Eventbrite is taking the issue “very seriously” and the “identified illegal and illicit activity has been removed.”

Eventbrite’s help center says it uses a “combination of tools and processes” to detect content that goes against its rules. These include, its pages say, using machine learning to proactively detect content, a “rules-based” system, responding to reports from users, and human reviews.

“Our investigation determined this is abnormal activity, a misuse of the Eventbrite platform, and based on our findings, Eventbrite did not profit from these listings, and there have been no finalized ticket purchases identified,” Adams says.

Eventbrite appears to have removed most, if not all, of the illicit listings that WIRED identified after we alerted the company to the issue. Because of the way WIRED collected the data, however, the thousands of listings found on Eventbrite are likely the tip of the iceberg. WIRED obtained the data used for its analysis by collecting listings Eventbrite deemed were “related” to hundreds of events found through simple keyword searches. These keyword searches and their related events likely do not capture the entirety of illicit events published on the platform.

Even within this limited dataset, our analysis found that, on average, 169 illicit events have been published daily.

The vast majority of the listings WIRED found used common tactics, whether they pushed drugs, escort services, or online account details. The spammy pages were often listed as online “events.” The events do not actually happen but rather act as a way for those posting them to publish their activities online. Most of them were free; however, some tried to charge people to “attend” through Eventbrite. It is not clear whether anyone has paid for any of the events.

Searching for various controlled substances, such as brand-name opioids, brought up results on Eventbrite. These “events” mostly pushed people away from the platform to online pharmacy websites, which say people can buy medicines without prescriptions.

John Hertig, an associate professor at Butler University College of Pharmacy and Health Sciences, says there are thousands of online pharmacies operating at any time and that the vast majority of them are illegal—with websites often selling drugs not approved by the FDA or failing to be licensed in the country where they are selling into.

“The other major issue that we see in terms of illegality is not requiring a prescription,” Hertig says. “You see a lot of this: ‘easy, hassle free, simple process, no doctor needed.’ That's illegal.” Typically accounts claiming to sell medicines through non-official platforms, such as those on Eventbrite, will not be doing so legitimately, Hertig says, and that brings risks around whether what they are selling is safe.

As well as websites, those claiming to sell illicit services on Eventbrite pushed people to chat privately on WhatsApp or Telegram. Our analysis identified as many as 60 unique Telegram accounts and 65 WhatsApp numbers in the dataset. WhatsApp spokesperson Joshua Breckman says the platform encourages users to report suspicious activity and that it will respond to valid law enforcement requests. Telegram did not respond to a request for comment.

Eventbrite Promoted Illegal Opioid Sales to People Searching for Addiction Recovery Help

Two judges in London have ruled that WikiLeaks’ founder Julian Assange can appeal his extradition to the US on freedom of speech grounds.

WikiLeaks founder Julian Assange can appeal his extradition to the United States, a British court has said.

Two judges at the High Court in London today said Assange can officially challenge his extradition order from the United Kingdom in the long-running dispute over the leaking and publication of military secrets.

Following a two-hour hearing, at which Assange was not present due to health issues, the judges allowed Assange to appeal his extradition on freedom of speech and freedom of expression grounds. The decision, the latest in a years-long legal battle, follows a UK High Court ruling in May that asked the US government to provide more “assurances” about the conditions Assange would face if he were extradited. In that instance, the court said it required more convincing that Assange would have free speech protections, that his Australian nationality would not prejudice him in any trial, and that he would not later be sentenced to death.

The judges, Victoria Sharp and Jeremy Johnson, have now considered arguments from both sides on the three issues and decided to allow Assange to appeal the “assurances” about how his trial would be conducted and First Amendment grounds. (Assange’s team did not contest assurances from the US government that he would not be given the death penalty.)

The decision to grant an appeal, which will be seen as a partial win for Assange, means the long-running saga will likely extend over months to come.

Assange faces 18 charges in the US, all but one under the Espionage Act, for publishing classified information related to the US-led wars in Iraq and Afghanistan. A conviction under the act would require prosecutors to demonstrate that Assange not only obtained national defense information but also released it with the intent to injure the United States—a major hurdle for US prosecutors in a case against an award-winning journalist.

Assange’s attorneys say he could face up to 175 years in prison, though US prosecutors have claimed publicly that they expect him to serve no more than five.

Prosecutors in the US allege that Assange, 52, overstepped his role as a journalist in online conversations with a source, Chelsea Manning, a former Army intelligence analyst, by allegedly offering to help the then-22-year-old private crack a hashed password that could have hypothetically furthered her illicit access to a classified Defense Department network.

Manning was arrested in 2010 on suspicion of having leaked purportedly classified footage of a US airstrike in Baghdad. The damning video, which came to be known as “Collateral Murder,” depicted a helicopter attack in which at least 12 civilians, including two Reuters journalists, were gunned down. (The Pentagon later assessed that the footage was not, in fact, classified.)

Manning, who spent more than a year and a half in pretrial confinement, confessed in 2013 to leaking more than 750,000 documents. A third of the cache consisted of diplomatic cables that, while portrayed as highly damaging by the Obama administration, were in large part simply embarrassing for US diplomats, who wrote candidly about the behavior of foreign leaders in their reports back home.

Ultimately, Manning was convicted on six Espionage Act offenses and one computer hacking charge. Only 229 of the documents were held against her in court. She was acquitted of “aiding the enemy,” a charge that could have carried a life sentence. Her 35-year sentence was commuted by former president Barack Obama in 2017 in one of his final acts of office.

In 2019, Assange was forcibly removed from the Ecuadorian embassy in London where he’d lived under asylum for seven years and sentenced by a British court to 50 weeks in prison for skipping bail. He’s been held in Belmarsh prison ever since, pending the completion of his extradition hearings, which were repeatedly delayed as a result of the Covid-19 pandemic.

A British court initially barred the US from extraditing Assange in 2021, citing mental health issues and an increased risk of suicide. That decision was overturned on appeal after US prosecutors offered assurances designed to ameliorate concerns about the harsh conditions inside US prisons, including the system’s frequent use of prolonged isolation, a practice comparable to torture and revealed by research to have deleterious if not irreversible effects on the mind.

The prosecutors were also made to agree not to subject Assange to the death penalty or to what the country calls “special administration measures,” the practice of wiretapping calls between prisoners and their lawyers to “prevent the disclosure of classified information.”

Prosecutors additionally agreed not to deny Assange, an Australian citizen, the opportunity to seek a First Amendment defense, though there is no guarantee he would succeed. (The Espionage Act does not differentiate between journalists and nonjournalists.) Speaking recently with the Associated Press, Stella Moris, Assange’s wife and the mother of his two children, said the US assurances were laden with “weasel words.”

WikiLeaks editor in chief Kristinn Hrafnsson told reporters this month that the question of whether Assange can defend himself by relying on his status as a journalist should be a simple “yes or no question.” However, US prosecutors have stated the “applicability” of the First Amendment is “exclusively within the purview of the US Courts.”

“The US simply cannot guarantee his safety and well-being as it has also failed to do for the hundreds of thousands of people currently imprisoned in the US,” said Julia Hall, Amnesty International’s expert on criminal justice in Europe.

Free press organizations in the US have warned that the prosecution of Assange would set a dangerous precedent and have a chilling effect on journalists who obtain classified information. The Assange case represents the first time that the Espionage Act has been used against a publisher of classified materials who was not himself involved in its theft. The US Supreme Court has long recognized the right of journalists to publish leaked materials even when they are criminally obtained by a source.

“The indictment is a mishmash of accusations, including the risk of penalizing any reporter who does more than sit back and passively wait for material to be leaked to them,” Alan Rusbridger, the former editor of The Guardian, said in 2019.

The Committee to Protect Journalists says the arguments laid out in the Assange indictment could establish “a legal pathway for the prosecution of journalists and severely weaken the First Amendment, which guarantees freedom of the press,” adding: “Journalists’ right to report on matters of public interest without fear of censorship or retribution could be harmed.”

WikiLeaks’ Julian Assange Can Appeal His Extradition to the US, British Court Says

Plus: Three arrested in North Korean IT workers fraud ring, Tesla staffers shared videos from owners’ cars, and more.

Laser warfare, among all the long-unfulfilled imaginings of science fiction writers, is right up there with flying cars. Now it's finally becoming a reality. After decades of research, the US military is actively deploying laser defense systems in the Middle East to shoot down drones launched by adversaries like Yemen's Houthi rebels, one of several recent deployments of laser tech in actual combat situations.

In less _pew_\-_pew_\-oriented security news, the debate continues over the extension of Section 702 of the Foreign Intelligence Surveillance Act, signed by President Biden last month, as 20 civil liberties organizations sent a letter to the Justice Department demanding more clarity on when the NSA can demand US tech companies cooperate in its wiretaps. Elsewhere, WIRED obtained emails showing how New York City decided to deploy a gun-detection system called Evolv in subways despite false-positive rates as high as 85 percent.

At the Google I/O developer conference, meanwhile, the search giant debuted a new AI-based feature in Android that's designed to detect if a phone has been stolen and automatically lock it down. And we dug into the stakes for financial privacy and surveillance posed by the $2.3 billion Tornado Cash money laundering case, whose cofounder was found guilty and sentenced to more than five years in prison on Tuesday.

That’s not all. Each week, we round up the security and privacy news we didn’t cover in depth ourselves. Click the headlines to read the full stories. And stay safe out there.

The system known as SS7—which connects cellular networks run by different providers—and its more recent upgrade called Diameter have long been considered a serious security and privacy problem. Researchers have warned that hackers who can gain access to a mobile provider's system or even create their own have the ability to reroute cellular data, allowing them to track individuals or eavesdrop on their communications. Now one US official is raising the alarm that this technique has been used numerous times against real victims in the US.

As first reported by 404 Media, CISA's senior adviser for telecommunications, Kevin Briggs, responded to questions from the Federal Communications Commission in a public filing, confirming that he has seen multiple cases of Americans tracked via SS7 or Diameter, including one person whose location was tracked with the technique in March 2022 and three more the next month. He also warned that there were signs that many more people had been targeted, but that spies had used techniques to mask their exploitation of the system.

The revelation sounds a clear warning that telecoms—and their regulators—need to do more to lock down a known, critical vulnerability that leaves any of hundreds of millions of Americans open to espionage. “Much more could be said,” Briggs cryptically concluded his statement, “but this ends my public comments.”

**US Feds Bust a North Korean Remote Tech Worker Scheme**

The post-pandemic era of the virtual workplace has led to a strange new problem: North Korean tech workers secretly infiltrating US companies as remote workers to earn money for the world's most authoritarian regime. This week the Justice Department announced three arrests, including one American woman in Arizona and a Ukrainian man in Poland, who allegedly helped to enable thousands of North Korean workers based in China and Russia to obtain jobs in Western companies, often with fraudulent job applications and stolen identities. A third man, a Vietnamese national, was arrested in Maryland for allegedly offering his own identity to the North Koreans as cover. In total, the North Korean workers got jobs at more than 300 companies—including a high-end retail chain and a major Silicon Valley tech firm—and cumulatively earned at least $6.8 million, the Justice Department said. Much of that money was funneled to the regime of Kim Jong-Un, including to its weapons programs.

**Tesla Staff Collected and Shared Sensitive Videos From Cars**

Given that Teslas are massive collections of cameras on wheels, they've always held the potential to serve as powerful surveillance devices. But Tesla drivers probably weren't expecting all that video surveillance to be turned on them. Reuters this week revealed that Tesla staff have collected and circulated videos recorded by cars' cameras, which have included everything from mundane shots turned into memes, to a violent video of a child on a bicycle being struck by the car, to a fully naked man approaching his vehicle. (They also included a video that showed a submarine used in a James Bond movie in Elon Musk's garage, filmed from cameras on the Tesla CEO's own car.) Tesla assures customers in its privacy fine print that videos collected by Tesla's staff remain anonymous and aren't linked to any particular vehicle. But seven former staffers told Reuters that the videos are linked with location data that could likely be used to identify vehicle owners.

**FBI Busts Cybercriminal Site BreachForums—Again**

BreachForums has long been one of cybercriminals' most well-known gathering places for selling hacking tools and stolen data. Now it's been taken down—for the second time in two years—in an FBI operation that also seized the Telegram channel for the forum and that of its alleged operator, who goes by the name Baphomet. That bust follows the arrest of the site's previous administrator, Conor Brian Fitzpatrick, last year, when the FBI seized a previous incarnation of the site. That earlier version of BreachForums itself replaced an older cybercriminal marketplace called RaidForums. Given that history, the latest BreachForums takedown is perhaps “the least surprising infosec news of the year,” writes security entrepreneur and HaveIBeenPwned creator Troy Hunt.

US Official Warns a Cell Network Flaw Is Being Exploited for Spying

Google is introducing new AI-powered safety tools in Android 15 that can lock down your phone if thieves nab it.

Billions of Android phones are getting new tools to stop phone thieves from accessing your information and to slow down their criminal behavior, Google announced today at its I/O developer conference. Android phones will soon use artificial intelligence to automatically detect when they have been snatched from your hand and lock themselves, as part of the new changes that include adding extra protections to secure your phone if it has been stolen.

The upgrades—some of which will come with the Android 15 operating system, while others will be compatible with older phones—come as phone companies are increasingly building extra measures into their software to thwart rampant levels of phone thefts and further protect people’s data. As well as the stolen phone tools, Google is introducing new changes to Android 15 that will scan how apps are using “sensitive permissions” in real time to detect potentially suspicious app activities.

Around the world, phone thefts are a huge problem—in London, for example, a phone is stolen every six minutes. Thieves riding electric bikes or scooters can snatch phones out of people’s hands, pickpockets can easily nab devices from bags, and others are known to peer over shoulders to learn a phone’s PIN before they steal the device.

Stolen phones can be resold if they are unlocked or passed on to others who can break them down for parts and sell those components. However, some criminals will also try to access banking or crypto apps and transfer money. “The thieves profit from the physical device themselves, but they also increasingly are trying to get into the content of the device, where the most valuable data is stored,” Jianing Sandra Guo, an Android security and privacy product manager at Google, tells WIRED. Some thieves, if they have a locked phone, spam people with phishing emails and messages to friends to try and get login details.

Google’s anti-theft tools have been designed to add more protection before a phone is stolen, during the theft, and after a phone has been taken, Guo explains. In keeping with Google’s and the wider tech industry’s push, some of these have been built using artificial intelligence as a key component.

Courtesy of Google

Android’s new Theft Detection Lock uses Google’s AI to determine when your phone has been snatched from your hand. If it detects this, the phone’s screen will automatically be locked. Using smartphone sensors, such as the accelerometer and gyroscope, Google trained its algorithms to detect sudden changes in the phone’s positioning and the motions that might indicate it has been snatched.

“There’s a grabbing of the phone, changing hands, and then an attacker running, biking, or even driving away with a device,” Guo says. To train the algorithm, Google’s research staff studied how phones are commonly stolen, then its teams re-created snatching events against each other to collect data about what a simulated theft looks like.

Thieves stealing phones, Guo says, will often open the camera app when they don’t know the phone’s PIN, to stop them from losing access to the device. They also often try to disconnect it from cell networks for a long period of time so they can’t be locked out of the device remotely. The company’s new Offline Device Lock will lock your screen when the phone is offline for an extended period of time, if the setting is turned on.

To increase protections before a phone is stolen, Google says in a blog post, the company is adding four data protection features that can help keep your information locked down. The first stops your phone from being set up after a factory reset, unless the person knows your login details. “This renders a stolen device unsellable, reducing incentives for phone theft,” Google vice president Suzanne Frey writes.

There’s also a new “private spaces” option where you can store sensitive apps, such as banking apps, that require a second PIN or use of your biometrics, such as a fingerprint, to access. There are also extra authentication controls being put in place: If a thief tries to disable Google's Find My Device location-tracking service they will need to also use your PIN, password, or biometric information to unlock it. If a thief does know your PIN, it will also be possible to turn on the need for biometric authentication to make changes to important Google account and device settings, such as a PIN change or turning off anti-theft settings.

The extra authentication features are similar to those introduced by Apple in its Stolen Device Protection system that debuted in iOS 17.3 earlier this year, although Google’s theft motion detection goes further than these tools. The aim of all anti-theft options is to lock down the information stored on phones but also to make it harder for criminals to abuse devices when they have them. Making it more difficult for criminals to resell phones or transfer money may help to deter thefts.

If your phone does get stolen, Android already allows phones to be locked and wiped. However, Guo says, the experience of having a phone swiped from your hands is a “traumatic” experience, and in the aftermath, people may not remember all their Google account login details to close off access to the phone. To address this, Google’s new Remote Lock feature will allow people to lock their phone using just a phone number. “The content of the device is protected, and it buys the user a lot of time … to be able to organize themselves and do further remediation,” Guo says.

Google’s new protections around factory resets will launch with Android 15, while some of the other features will be available later this year. Guo says that, where possible, Google has tried to make the features work on versions of the software as old as Android 10.

Aside from the anti-phone-theft tools, Android is coming with other security and privacy updates. Google’s app safety system, Google Play Protect, scans billions of apps every day to detect malware, but now this is being expanded to do live scanning on people’s phones to better detect suspicious behavior. “With live threat detection, Google Play Protect’s on-device AI will analyze additional behavioral signals related to the use of sensitive permissions and interactions with other apps and services,” Dave Kleidermacher, a Google vice president, writes in a blog post.

Other security-related updates to Android 15 include hiding notifications and one-time passwords from appearing if you are sharing your phone’s screen with others, hiding login details if you are logging in to an app or website while sharing your screen, and identifying when cell connections are unencrypted and alerting people if there is a “potential false cellular base station” or IMSI catcher nearby that is logging a user’s phone.

_Updated 2:45 pm ET, May 15, 2024, to clarify that several new features will be included in updates that are separate from Android 15 itself, according to Google._

Android Update: Theft Detection Lock Knows When Your Phone Is Stolen

A coalition of digital rights groups is demanding the US declassify records that would clarify just how expansive a major surveillance program really is.

Last month, US president Joe Biden signed a surveillance bill enhancing the National Security Agency’s power to compel US businesses to wiretap communications going in and out of the country. The changes to the law have left legal experts largely in the dark as to the true limits of this new authority, chiefly when it comes to the types of companies that could be affected. The American Civil Liberties Union and organizations like it say the bill has rendered the statutory language governing the limits of a powerful wiretap tool overly vague, potentially subjecting large swaths of corporate America to warrantless and secretive surveillance practices.

In April, Congress rushed to extend the US intelligence system’s “crown jewel,” Section 702 of the Foreign Intelligence Surveillance Act (FISA). The spy program allows the NSA to wiretap calls and messages between Americans and foreigners abroad—so long as the foreigner is the individual being “targeted” and the intercept serves a significant “foreign intelligence” purpose. Since 2008, the program has been limited to a subset of businesses that the law calls “electronic communications service providers,” or ECSPs—corporations such as Microsoft and Google, which provide email services, and phone companies like Sprint and AT&T.

In recent years, the government has worked quietly to redefine what it means to be an ECSP in an attempt to extend the NSA’s reach, first unilaterally and now with Congress’ backing. The issue remains that the bill Biden signed last month contains murky language that attempts to redefine the scope of a critical surveillance program. In response, a coalition of digital rights organizations, including the Brennan Center for Justice to the Electronic Frontier Foundation, is pressing the US attorney general, Merrick Garland, and the nation’s top spy, Avril Haines, to declassify details about a relevant court case that could, they say, shed much-needed light on the situation.

In a letter to the top officials, more than 20 such organizations say they believe the new definition of an ECSP adopted by Congress might “permit the NSA to compel almost any US business to assist” the agency, noting that all companies today provide some sort of “service” and have access to equipment on which “communications” are stored.

“Deliberately writing overbroad surveillance authorities and trusting that future administrations will decide not to exploit them is a recipe for abuse,” the letter says. “And it is entirely unnecessary, as the administration can—and should—declassify the fact that the provision is intended to reach data centers.”

The Justice Department confirmed receipt of the letter on Tuesday but referred WIRED to the Office of the Director of National Intelligence, which has primary purview over declassification decisions. The ODNI has not responded to a request for comment.

It is widely believed—and has been reported—that data centers are the intended target of this textual change. Matt Olsen, the assistant US attorney general for national security, appeared on an April 17 episode of the _Lawfare_ podcast to say that, while unable to confirm or deny any specifics, data centers today store a significant amount of communications data and are an “example” of why the government viewed the change as necessary.

A DOJ spokesperson pointed WIRED to an April 18 letter by Garland that claims the new ECSP definition is “narrowly tailored.” The letter includes written reflections on the provision by the assistant attorney general, Carlos Uriarte, who writes that the “fix” is meant to address a “critical intelligence gap” resulting from changes in technology over the past 15 years. According to Uriarte, the DOJ has committed to applying the new definition internally “to cover the type of service provider at issue” before the court.

Ostensibly this means the government is promising to limit future surveillance directives to data centers (in addition to the companies traditionally defined as ECSPs).

The surveillance court that oversees FISA and the appeals court that reviews its decisions sided two years ago with an unidentified company that fought back after being served an NSA order. Both courts ruled that it did not, in fact, appear to meet the criteria for being considered an ECSP, as only part of its function was storing communications data. Finding the government’s interpretation of the statute overly broad, the court reminded the government that only Congress has the “competence and constitutional authority” to rewrite the law.

Digital rights groups argue that declassifying additional information about this FISA case may help the public understand which types of businesses are actually subject to NSA directives. Practically speaking, they say, that information is no longer a secret anyway. “Declassifying this information would cause little if any national security harm,” the letter says. “The New York Times has already revealed that the relevant FISC case addressed data centers for cloud computing.”

In the aftermath of the FISA court’s ruling, the NSA and other spy agencies began lobbying the House and Senate intelligence committees to aid the administration in redefining what it means to be an ECSP. Members of both committees have subsequently portrayed the court’s ruling as a “directive” that Congress needs to expand the NSA’s reach. In a floor speech last month, Mark Warner, the chair of the Senate Intelligence Committee, said, “So what happened was, the FISA Court said to Congress: You guys need to close this loophole; you need to close this and change this definition.”

But in fact what the court asserted was that the government had exceeded its authority and that it was Congress’ job, not the Justice Department’s, to revise the law. “Any unintended gap in coverage revealed by our interpretation is, of course, open to reconsideration by the branches of government whose competence and constitutional authority extend to statutory revision,” the court said.

This would culminate in new language being proposed that quickly alarmed legal experts, including top civil liberties attorneys who’ve appeared before the secret court in the past. The surveillance fears quickly spread to Silicon Valley. The Information Technology Industry Council, one of the tech industry's top lobbying arms, warned that companies like Facebook and IBM were interpreting the bill as having “vastly expanded the US government’s warrantless surveillance capabilities.”

This expansion, the firm added, would also hinder the “competitiveness of US technology companies” and arguably imperil the “continued global free flow of data between the US and its allies.” Customers internationally, it argued, would likely begin taking their business elsewhere should the US government turn data centers into surveillance watering holes.

Concerns about the new ECSP definition have been circulating since December. While largely dismissing them, members of the House and Senate intelligence committees made a few adjustments in February, exempting a handful of business types. This came in response to popular concerns that Starbucks employees and hotel IT staff might be secretly conscripted by the NSA. FISA experts such as Marc Zwillinger—a private attorney who has appeared twice before the FISA Court of Review—noted in response to those adjustments that Congress’ rush to exempt a handful of businesses only served to demonstrate that the text was inherently too broad.

Intelligence committee members kept the pressure on lawmakers to reauthorize the Section 702 program with the sought-after language, going as far as to suggest that another 9/11-style attack might occur if they failed. The power of the committees was on full display, as while neither actually have primary jurisdiction over FISA, a majority of the Section 702 bill that passed was authored by intelligence committee staff.

Even while supporting the new framework and dismissing the intensity of civil society’s concerns, Warner did eventually step forward to acknowledge the new ECSF definition needed additional tweaking. First, on the Senate floor in April, he said that Garland shared his “view” that the language “could have been drafted better.” Later, in response to questions from reporters, he added: “I’m absolutely committed to getting that fixed.”

That appears unlikely to happen soon. According to The Record, Warner indicated that the best time to update the language again would be in the “next intelligence bill,” presumably referring to legislation this fall broadly reauthorizing the intelligence community’s work.

In the meantime, however, more than half of Congress is running for election, and the next US president will have greater surveillance powers than any other before. No one can say for sure who that president will be or how they’ll make use of that authority.

_Updated 2:20 pm ET, May 14, 2024, to clarify statements by Matt Olsen, assistant US attorney general for national security, to the_ Lawfare _podcast._

Secrecy Concerns Mount Over Spy Powers Targeting US Data Centers

NYC mayor Eric Adams wants to test Evolv’s gun-detection tech in subway stations—despite the company saying it’s not designed for that environment. Emails obtained by WIRED show how the company still found an in.

There was a lot of overlap with former members of the NYPD. Adams and Banks came up together as police officers—as did a then-account-executive of Evolv, also name-dropped by Chitkara in the email to the mayor’s staff. Dominick D’Orazio, who had been Evolv’s sales manager in the northeast US before being promoted to regional manager in April, was a commander in Brooklyn South whose reporting line included Banks—who was, at the time, deputy chief of patrol for Borough Brooklyn South. (Banks has denied meeting D’Orazio in his capacity as an Evolv employee.)

Evolv’s connection to the NYPD is something George, Evolv’s CEO, has used to market the company’s technology. “About a third of our salespeople were former police officers,” George said at a conference in June 2022. “The one here in New York was an NYPD cop, and he’s a really good sales guy because he understands who we’re selling to. He has the secret handshake.”

David Cohen, former NYPD deputy commissioner of intelligence, also sits on Evolv’s Security Advisory Board.

The Mayor’s Office has been keen to stress that it is not set on Evolv being a permanent fixture. “To be clear, we have NOT said we are putting Evolv technology in the subway stations,” Kayla Mamelak, deputy press secretary of the Mayor’s Office, tells WIRED in an email. “We said that we are opening a 90-day period to explore using technology, such as Evolv, in our subway stations.”

Civil rights and technology experts have argued that utilizing Evolv’s scanners in subway stations is likely to be futile. “This is Mickey Mouse public safety,” says Albert Fox Cahn, founder of the Surveillance Technology Oversight Project, a privacy advocacy organization. “This is not a serious solution for the largest transit system in the country.”

Moreover, deploying the company’s technology might not just be ineffective—it’s also likely to add more police officers to the daily rhythms of New Yorkers’ lives, heightening Adams’ pro-cop agenda. The NYC subway has 472 stations. “That is roughly 1,000 subway station entrances,” explains Sarah Kaufman, director of the New York University’s Rudin Center for Transportation. “That means that Evolv would have to be at every single entrance in order to be effective, and that of course would require monitoring.”

According to the draft policy posted by the NYPD, the process surrounding weapons-detection technology in the subway is extremely vague, and still relies heavily on police officers. “The checkpoint supervisor will determine the frequency of passengers subject to inspection (for example, every fifth passenger or every tenth passenger),” the document reads. It will also be based on “available police personnel on hand to perform inspections.”

The NYC subway has an estimated 3.6 million daily riders. Stopping every 10th passenger would mean 360,000 searches a day.

“It’s going to mean that people are routinely going to have to go through invasive and inconvenient searches,” says Cahn. “What’s really emblematic here is that the city keeps trying to go for security measures that are highly visible, even when they’re highly ineffective.”

**School Supplies**

In the email thread to the NYC officials who attended the meeting, Chitkara touted Evolv’s successful deployment in schools. But there, too, the scanners have failed to detect weapons and guns on multiple occasions. While the Adams administration was being persuaded to pilot the technology, internal emails obtained from a large school district that uses Evolv’s technology illustrate how everyday objects were being mistaken by the scanners.

“I know the simple solution is to tell kids not to use binders but rather regular notebooks,” Jacqueline Barone, principal of Piedmont Middle School, part of Charlotte-Mecklenburg Schools in North Carolina, wrote at the end of 2022. “But it hurts my soul to have to tell kids or teachers that certain supplies can’t be used because the scanners mistake them for weapons.”

Internal Emails Reveal How a Controversial Gun-Detection AI System Found Its Way to NYC

Tuesday’s verdict in the trial of Alexey Pertsev, a creator of crypto-privacy service Tornado Cash, is the first in a string of cases that could make it much harder to skirt financial surveillance.

In the fall of 2020, as crypto scammers and thieves began to realize the full potential of a financial privacy tool called Tornado Cash—a clever new system capable of shuffling users' funds to cut the trail of crypto transactions recorded on the Ethereum blockchain—Alexey Pertsev, one of the creators of that service, sent a note to his fellow cofounders about this growing issue. He suggested crafting a standard response to send to victims pleading with Tornado Cash for help with stolen funds laundered through their service. “We must compose a message that we will send to everyone in similar cases,” Pertsev, the then-27-year-old Russian living in the Netherlands, wrote to his colleagues.

Tornado Cash cofounder Roman Semenov answered three minutes later with a draft of their stock response—essentially pointing to the fact that the service's novel design meant it ran on the Ethereum blockchain, not on any server they owned, and was thus out of their hands. “It is a decentralized software protocol that no one entity or actor can control,” the message read. “For that reason, we are unable to assist with respect to any issues relating to the Tornado Cash protocol.”

That statement would remain Tornado Cash's position two days later when hackers affiliated with the North Korean government stole roughly $275 million worth of coins from the crypto exchange KuCoin and funneled a portion of the loot through Tornado Cash to cover their tracks. Tornado Cash would maintain that stance as, according to Dutch prosecutors, a billion-plus dollars more of stolen funds flowed through the service over the next two years, part of at least $2.3 billion in total funds from criminal and sanctioned sources that made up more than 30 percent of the service's overall transactions from 2019 to 2022.

Now, two years after Pertsev's arrest and indictment for money laundering, that “out-of-our-hands” decentralization defense has become one of the central arguments for his innocence. On Tuesday, it will be put to the test when a panel of three Dutch judges rules on the criminal charges that could send Pertsev to prison for years. Privacy advocates believe the result of the case—the first of two, as the New York prosecution of another Tornado Cash cofounder, Roman Storm, is expected to go to trial this coming September—could also shape the future of cryptocurrency privacy and may determine the limits of services like Tornado Cash or other open source software creations to offer a safe haven from financial surveillance.

Dutch prosecutors have accused Pertsev of essentially creating the perfect money laundering machine by designing Tornado Cash to work as a set of “smart contracts”—a type of decentralized service made possible by Ethereum's unique features, in which code is copied to the thousands of Ethereum nodes that store the cryptocurrency's blockchain—and thus preventing Tornado Cash's creators from identifying or controlling who used the service to hide the origins and destinations of their funds.

Pertsev's defenders, on the other hand, point out that those properties are also exactly what makes Tornado Cash such a powerful tool for privacy. “This is the entire point of a decentralized system,” says Sjors Provoost, a Dutch cryptocurrency developer and author of _Bitcoin: A Work in Progress,_ who attended Pertsev's trial. “These are completely clashing worldviews. There's the worldview of privacy and decentralization, and there's the government worldview of surveillance, in which you need to be able to check every transaction.”

Since US and Dutch prosecutors indicted Tornado Cash's cofounders and the US Treasury sanctioned the service in 2022, the case has become a cause célèbre in some cryptocurrency circles, many of whose adherents argue that a guilty verdict could not only damage financial privacy but also set a dangerous precedent that developers of open source software can be held liable for the actions of those who use their tools. Ethereum's inventor, Vitalik Buterin, has noted publicly that he used Tornado Cash to anonymize a donation to Ukraine following Russia's invasion, as an example of the service's legitimate use for privacy. US National Security Agency whistleblower Edward Snowden has compared Tornado Cash's functioning on the Ethereum's blockchain to a water fountain built in a park—a kind of public utility where “you push a button and privacy comes out”—and has called the crackdown on Tornado Cash and its cofounders “deeply illiberal and profoundly authoritarian."

Yet the Dutch prosecutors and Netherlands' financial law enforcement agency, known as FIOD, which led the investigation of Pertsev, argue that the case isn't actually about a fundamental conflict between privacy and security, or liability for open source code, or any other larger principle. Instead, they say, it's about Pertsev's specific, informed decisions to enable thieves on an enormous scale. “It's all about the choices of our suspect,” M. Boerlage, the case's lead prosecutor, tells WIRED in an interview. “He made choices writing the code, deploying the code, adding features to the ecosystem. Choice after choice after choice, all while he knew that criminal money was entering his system. So it's not about code. It's about human behavior.”

****A Room Without a Lock—or Walls****

Dutch prosecutors contend that, despite the Tornado Cash creators' claims, they did exert control over it. Aside from its decentralized “smart contract” design, they point to Tornado Cash's web-based user interface for interacting with its blockchain-based smart contract: a fully centralized tool running on infrastructure the creators built and managed, which nonetheless had no monitoring or safeguards to prevent its abuse by criminals for money laundering. In fact, prosecutors found that during the time of their investigation, 93.5 percent of users sent their transactions to Tornado Cash through that web interface, which was far simpler to use than directly interacting with the blockchain-based service.

Pertsev's defense didn't respond to WIRED's repeated requests for an interview. But his lead defense attorney, Keith Cheng, has countered that there would have been no point in monitoring or blocking users on that web interface when anyone could circumvent the website altogether to interact directly with the smart contract or even to build their own interface. “The Tornado Cash smart contracts could be accessed directly at any point of time,” Cheng told an audience at the ETHDam cryptocurrency conference in Amsterdam last year. “Implementing checks within the surrounding infrastructure is akin to adding extra locks to a door that lacks surrounding walls.”

The prosecution points out that Tornado Cash could have at least _tried_ to put locks on that door, given that the vast majority of their users, both legitimate and criminal, were walking through it. More fundamentally, they argue that it was Pertsev's decision to put into place a system that he knew from the start would include basic elements he couldn't control. “Building and deploying something unstoppable is also a decision,” says Boerlage.

That question of decentralization and control nonetheless makes the Tornado Cash case a far less straightforward prosecution than those against the founders of simpler bitcoin-based “mixer” services like Bitcoin Fog or Helix, which were similarly intended to prevent cryptocurrency tracing. In each of those earlier cases, the administrators—now both convicted of money laundering conspiracy—hid their connections to the services. By contrast, Pertsev and his cofounders appear to have been confident enough in their remove from the money launderers who used Tornado Cash that they operated fully in the open, under their real names. “This complete transparency does not exactly indicate criminal activity,” Pertsev's attorney Cheng told ETHDam.

At the same time, the prosecution argues that Pertsev was both aware of and untroubled by the millions and ultimately billions of dollars in stolen cryptocurrency flowing through Tornado Cash, which reached a peak in the spring of 2022. They argue that Pertsev continued to maintain and develop pieces of the system—such as its centralized frontend—even as the service was used to launder the stolen funds from 36 distinct cryptocurrency heists, many of which prosecutors say he and his cofounders discussed in their communications. In the meantime, he also profited handsomely, in part from Tornado Cash's issuing its own crypto token, ultimately making more than $15 million and buying himself a Porsche.

When North Korean hackers stole more than $600 million from the blockchain-based game _Axie Infinity_ in March of 2022, Tornado Cash cofounder Semenov wrote anxiously to Pertsev and Storm that “the fucking disaster is about to begin,” perhaps fearing that their service would be used by the perpetrators of that massive heist, as it already had been in well over a dozen others. Pertsev weighed in 10 minutes later, writing “noticed after 5 days, lol," an apparent reference to how long it seemed to have taken _Axie Infinity_ to discover the theft. Sure enough, less than a week later, hundreds of millions of dollars in stolen _Axie Infinity_ funds began to pour into Tornado Cash.

Prosecutors have pointed to Pertsev's “lol” as a sign of his flippant disregard for the victims whose funds, they argue, he was helping to launder. His defense has countered that he was merely expressing surprise.

That same month, perhaps in response to the growing spotlight on Tornado Cash's use by criminals, Pertsev and his cofounders did, in fact, implement a free tool from blockchain analysis firm Chainalysis that would block transactions from sanctioned Ethereum addresses via their web interface. The prosecution has pointed out that the free tool was easily circumvented—hackers could merely move their stolen coins to a different address before sending them into Tornado Cash—and described the effort as “too little and too late."

In their statement to the court, Dutch prosecutors suggest a different solution, if Pertsev had actually cared about Tornado Cash's exploitation by criminals. “What was the simplest option? Take the UI offline and stop advertising. Plain and simple,” they write. “Stop offering the service.”

In the conclusion of that same statement to the court, they point out that under Dutch law the maximum prison sentence for money laundering at the scale Pertsev allegedly committed is eight years, and they ask that Pertsev be sentenced to five years and four months if he's found guilty.

****The Tornado Rolls On****

Cryptocurrency advocates focused on privacy and civil liberties will be closely watching the outcome of Pertsev's case, which many see as a bellwether for how Western law enforcement and regulators will draw the line between financial privacy and money laundering—including in some immediate cases to follow.

The US trial of Tornado Cash's Storm in a New York court later this year, as well as the US indictment last month of the founders of Samourai Wallet, which prosecutors say offered similar privacy properties to Tornado Cash's, are more likely to directly set precedents in US law. But Pertsev's case may suggest the direction those cases will take, says Alex Gladstein, the chief strategy officer for the Human Rights Foundation and an advocate of bitcoin's use as a human rights tool.

“What happens in the Netherlands will color the New York case, and the Tornado Cash cases are really going to color the outcome of the Samourai case,” Gladstein says. “These cases are going to be historic in the precedents they set.”

Gladstein, like many crypto privacy supporters, argues that anyone weighing the value of tools like Tornado Cash should look beyond its use by hackers to countries like Cuba, Venezuela, and India, where activists and dissidents need to hide their financial transactions from repressive governments. “For human rights activists, it’s essential that they have money the government can’t surveil,” Gladstein says.

Regardless of the verdict in Pertsev's case or that of his cofounder Roman Storm in the fall, Tornado Cash's founder's core argument—that Tornado Cash's underlying infrastructure has always been out of their hands—has proven to be correct: Tornado Cash lives on.

True to its promise of decentralization, Tornado Cash still persists after its cofounders indictment in the fall of last year—and is now out of their control. In March, $283 million flowed into the service.

Courtesy of Chainalysis

When the tool's centralized web-based interface went offline last year in the wake of US sanctions and the two cofounders' arrests—Roman Semenov, for now, remains free—Tornado Cash transactions dropped by close to 90 percent, according to Chainalysis. But Tornado Cash has remained online, still functioning as a decentralized smart contract. In recent months, Chainalysis has seen its use tick up again intermittently. More than $283 million flowed into the service just in March.

In other words, whether it represents a public utility for financial privacy and freedom or an uncontrollable money laundering machine, its creators' claim has borne out: Tornado Cash remains beyond their control—or anyone's.

Source

Wired