A former product manager at Coinbase has pleaded guilty to two counts of conspiracy to commit wire fraud in what's believed to be the first crypto-related insider trading case in the US. Ishan Wahi initially pleaded not guilty last year.

Federal prosecutors claim that, on at least 14 occasions, Wahi shared confidential information with his brother Nikhil Wahi and friend Sammer Ramani about cryptocurrencies that Coinbase was planning to let its users trade so the pair could buy them in advance. Once Coinbase announced that it would list the tokens, their values rose. Nikhil Wahi and Ramani are said to have then sold the assets to make a profit. The scheme allegedly generated north of $1.5 million in ill-gotten gains.

Ramani has not been apprehended. Nikhil Wahi pleaded guilty to a wire fraud conspiracy charge in September and was last month sentenced to 10 months in prison. Ishan Wahi faces a prison sentence of between 36 and 47 months as part of his plea deal, according to Reuters. He'll be sentenced in May.

Along with the criminal charges, Wahi faced a civil lawsuit from the Securities and Exchange Commission. He asked a judge this week to dismiss the suit, having claimed that the cryptocurrency tokens in question are not securities, meaning they would not be subject to SEC regulation.

Dutch authorities arrested a hacker for obtaining and trying to sell the personal information of nearly every Austrian citizen in May 2020, according to Reuters. It includes almost nine million data sets, roughly lining up with Austria’s population.

The defendant, arrested in November in an Amsterdam apartment, was reportedly already known to international police. The 25-year-old defendant also offered “similar data sets” from Italy, the Netherlands and Colombia. Dutch police waited until now to announce the arrest to avoid hindering ongoing investigations.

Authorities say the hacker posted the information in an online forum. Police say the trove consists of “registration data,” essential info residents must provide to authorities. That includes their full name, address and date of birth — but not financial info, fortunately. Nevertheless, the police confirmed the material’s authenticity, adding that “since this data was freely available on the Internet, it must absolutely be assumed that these registration data are, in full or in part, irrevocably in the hands of criminals.”

The US Department of Justice has spent months infiltrating and disrupting the Hive ransomware group, the agency announced on Thursday. The DOJ says Hive has targeted over 1,500 victims in more than 80 countries, extorting hundreds of millions of dollars in ransom payments.

Working with German and Netherlands law enforcement, the FBI seized Hive’s servers and websites, allegedly slowing the group’s ability to attack and extort new victims. It first infiltrated Hive’s network in July 2022, providing over 300 decryption keys to Hive’s current victims and more than 1,000 keys to previous victims — preventing over $130 million in ransom payments. The agency hasn’t announced any arrests. However, it’s still investigating the group, according toNBC News.

Hive used a ransomware-as-a-service (RaaS) model, where administrators (essentially the ringleaders) create ransomware strains with easy-to-use interfaces. The administrators then recruit affiliates who use the ransomware software to carry out the theft — and likely much of the risk.

For example, Hive would steal a victim’s data and encrypt their system. The affiliate would then demand a ransom in exchange for the decryption key and a promise not to publish the data. (Of course, it would frequently target the most sensitive data to apply maximum pressure.) If the victims pay, affiliates and administrators would split the ransom 80 / 20. Those unwilling to pay would find their data leaked on the web.

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The US Cybersecurity and Infrastructure Security Agency (CISA) says Hive gained access through single-factor logins via Remote Desktop, VPNs, exploiting FortiToken (software-based access key) vulnerabilities and phishing emails with malicious attachments.

“Last night, the Justice Department dismantled an international ransomware network responsible for extorting and attempting to extort hundreds of millions of dollars from victims in the United States and around the world,” said US Attorney General Merrick Garland today. “We will continue to work both to prevent these attacks and to provide support to victims who have been targeted. And together with our international partners, we will continue to disrupt the criminal networks that deploy these attacks.” The FBI recommends victims contact their local FBI field office.

A federal judge has denied Elon Musk’s request to move his upcoming trial against a group of Tesla shareholders to Texas, according to Bloomberg (via The Verge). On January 7th, less than two weeks before the trial was scheduled to begin on the 17th, Musk’s legal team asked to move proceedings out of California, claiming “a substantial portion” of the potential jury pool in San Francisco was likely to hold a bias against the billionaire, in part due to the ongoing layoffs at Twitter.

The upcoming civil trial stems from a class action lawsuit related to “false and misleading” statements Musk made in 2018 when he said he was considering taking Tesla private at $420 per share. Musk’s “funding secured” tweet drew the attention of the US Securities and Exchange Commission, eventually leading to a $40 million settlement.

The shareholders involved in the suit allege Musk’s tweet affected Tesla’s stock price. They’re asking the court to order Musk to stop his “public campaign to present a contradictory and false narrative” of the episode. They say he should also be accountable for potential damages. The group won an early victory last spring when District Judge Edward Chen concluded Musk had “recklessly made the statements with knowledge as to their falsity.”

Of the approximately 200 candidates the court is considering for the jury, 82 percent said they had an unfavorable opinion of Musk in a pre-trial questionnaire. Ahead of the hearing, Alex Spiro, Musk’s lawyer, said the sheet showed “not only that a vast majority of potential jurors hold ill-will toward Mr. Musk. but that they are not afraid to declare it proudly and vividly to the court.” However, Judge Chen didn’t buy Spiro’s argument. Alluding to the recently concluded Theranos trial, Chen said a fellow judge in a nearby courthouse was able to assemble an “unbiased” jury to decide whether Elizabeth Holmes was guilty of criminal charges. He also dismissed the idea of moving the case to Texas, noting Tesla’s main office was located in California when Tesla shareholders sued Musk.

Sam Bankman-Fried is in a world of trouble. He’s facing up to 115 years in prison if he’s convicted of federal fraud and conspiracy charges. And yet the embattled founder of collapsed crypto exchange FTX — who has pleaded not guilty and is out on a $250 million bond while awaiting trial — figured it’d be a great idea to write about his perspective on the saga in a Substack newsletter.

In his first post, which is ostensibly about the collapse of FTX International, Bankman-Fried (aka SBF) claims that “I didn’t steal funds, and I certainly didn’t stash billions away.” SBF notes that FTX US (which serves customers in America) “remains fully solvent and should be able to return all customers’ funds.” He added that FTX International still has billions of dollars in assets and that he is “dedicating nearly all of my personal assets to customers.” SBF, who once had a net worth of approximately $26.5 billion, said at the end of November that he had $100,000 in his bank account, though he pledged to give almost all of his personal shares in Robinhood to customers.

The post covers much of the same ground that SBF has gone over in the myriad interviews he gave between FTX's collapse in November and his arrest last month. He discusses the multiple crypto market crashes in 2022 and a tweet from Binance CEO Changpeng Zhao that sparked a run on FTX’s FTT token and prompted the implosion of his exchange. SBF also writes about how he was pressured to file for Chapter 11 bankruptcy protection for FTX. Meanwhile, he notes that many of the numbers he cites in the post are approximations, since he has been locked out of FTX's systems by those overseeing its bankruptcy proceedings.

What's more interesting is what SBF doesn't address. He does not mention the fact that FTX co-founder Zixiao "Gary" Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to fraud charges and are cooperating with prosecutors.

SBF has continued to give interviews and tweet about the situation while he's out on bail. That's despite the complaint filed against him by the Securities and Exchange Commission citing his tweets and comments he made in an interview in early December. Perhaps this whole Substack thing will turn out to be a mistake too.

Sam Bankman-Fried, the disgraced founder and former CEO of crypto exchange FTX, has pleaded not guilty to federal wire fraud charges and other crimes. Per The New York Times, Bankman-Fried appeared before a Manhattan court on Tuesday, nearly two weeks after he was granted bail on a $250 million bond, and said he was innocent of charges laid against him by US prosecutors. 

In addition to a civil suit from the Securities and Exchange Commission, SBF faces a criminal indictment from the Justice Department. Prosecutors have accused Bankman-Fried of leading a multiyear scheme to defraud investors and customers of FTX. SBF faces a total of eight criminal charges, including multiple counts of wire fraud. He is also accused of attempting to commit commodities fraud, as well as breaking federal election laws by donating more than is legally allowed and in the names of other people.

Developing... 

Top FTX executives close to Sam Bankman-Fried, Caroline Ellison and Zixiao "Gary" Wang, have pleaded guilty to fraud and are cooperating with prosecutors. The pair were convicted "in connection with their roles in the fraud that contributed to FTX's collapse," said Damian Williams, the US Attorney for the Southern District of New York in a press conference.

Ellison, the former CEO of FTX sister company Alameda Research and ex-girlfriend of Bankman-Fried, pleaded guilty to seven counts and faces up to 110 years in prison. Former FTX co-founder Wang pleaded guilty to four counts and faces 50 years. Depending on the level of cooperation, however, they could receive lighter sentences. The pair also face civil fraud charges filed by the Securities and Exchange Commission (SEC) and Commodity Future Trading Commission (CFTC). Both were released on $250,000 bonds.

The announcement was made as Bankman-Fried was being extradited from the Bahamas to New York, and add to his mounting legal woes. Wang's lawyer Ilan Graff said that his client has "accepted responsibility for his actions and takes seriously his obligations as a cooperating witness," according to The Washington Post. 

Despite their cooperation, the SEC didn't mince words in laying out its case against Ellison and Wang. "Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang were active participants in a scheme to conceal material information from FTX investors," said SEC deputy director of enforcement, Sanjay Wadhwa. "By surreptitiously siphoning FTX’s customer funds onto the books of Alameda, defendants hid the very real risks that FTX’s investors and customers faced."

Bankman-Fried, meanwhile, is accused of a long list of misdeeds by multiple agencies, including the SEC, Department of Justice and CFTC. Those include defrauding FTX investors and customers of more than $1.9 billion, multiple counts of wire fraud, conspiracy to defraud investors by sharing misleading information and "surreptitiously" siphoning customer funds. The CFTC also alleges that Bankman-Fried and his cohorts "took hundreds of millions of dollars in poorly-documented 'loans' from Alameda," which they then used to purchase real estate and make political donations.

Would you pay a few bucks to skip an interminably long taxi wait line at the airport? That's essentially what Daniel Abayev and Peter Leyman did, according to the DOJ, except they focused on taxi drivers. The two men, both from Queens, have been arrested for hacking into JFK's taxi dispatch system with the help of Russian nationals. From September 2019 and September 2021, they charged drivers $10 to jump ahead of JFK's taxi queue. Typically, those cars are sent out depending on their order of arrival.

"For years, the defendants’ hacking kept honest cab drivers from being able to pick up fares at JFK in the order in which they arrived," U.S. Attorney Damian Williams said in a statement. "Now, thanks to this Office’s teamwork with the Port Authority, these defendants are facing serious criminal charges for their alleged cybercrimes.”

According to the DOJ's indictment, both men explored a variety of ways to break into JFK's taxi dispatch system, from bribing people to insert a malware-filled flash drive into a computer, stealing tablets and logging into the system over Wi-Fi. Abayev at one point messaged one of the Russian hackers: “I know that the Pentagon is being hacked[.]. So, can’t we hack the taxi industry[?]”

The pair used chat threads to communicate with drivers, some of whom also had their $10 fee waived if they could recruit others. Abayev and Leyman have been charged with two counts of conspiracy to commit computer intrusion, which carry a maximum 10-year sentence in prison. Their story follows a spate of Russian cyberattacks over the last ten years, including the infamous hack on Florida's voter databases in 2016, a decade-long malware scheme to steal millions, and the theft of NATO data in 2014.

In a reminder of smart home security’s dark side, two people hacked Ring security cameras to livestream swattings, according to a Los Angeles grand jury indictment (according to a report from Bloomberg). The pair called in hoax emergencies to authorities and livestreamed the police response on social media in late 2020.

James Thomas Andrew McCarty, 20, of Charlotte, North Carolina, and Kya Christian Nelson, 21, of Racine, Wisconsin, hacked into Yahoo email accounts to gain access to 12 Ring cameras across nine states in November 2020 (disclaimer: Yahoo is Engadget’s parent company). In one of the incidents, Nelson claimed to be a minor reporting their parents for firing guns while drinking alcohol. When police arrived, the pair used the Ring cameras to taunt the victims and officers while livestreaming — a pattern appearing in several incidents, according to prosecutors.

The pair were charged with conspiracy to access computers without authorization, which carries a maximum five-year sentence. Nelson, currently serving time in Kentucky for an unrelated case, was charged with two additional counts of intentionally accessing a computer without authorization and two counts of aggravated identity theft, which carries a mandatory two-year consecutive sentence.

More than 10 million users own Ring doorbells and home security cameras. Although the smart devices can deter things like robberies and “porch pirates,” Amazon admits to providing footage to police without user consent or a court order when it believes someone is in danger. Inexplicably, the tech giant made a zany reality series using Ring footage, which didn't exactly quell concerns about the tech’s Orwellian side.

When the Bahamas Attorney General's office announced that it had arrested former FTX CEO Sam Bankman-Fried, it noted that the former FTX CEO was likely to be extradited at the request of the United States. Just over a week later, that prediction has come true: Bankman-Fried signed extradition papers on Tuesday afternoon.

According to an unsealed indictment, Bankman-Fried is facing 8 counts of conspiracy to commit wire fraud, commodities fraud, securities fraud, and more. Specifically, the SEC accuses the cryptocurrency founder of "orchestrating a massive, years-long fraud" for "his own personal benefit and to help grow his crypto empire." The Department of Justice has accused him of attempting commodities and securities fraud, conspiring to defraud investors and breaking federal election laws for donating more to political groups than is legally allowed.

Bankman-Fried originally planned to fight extradition, but indicated on Monday that he would reverse course. Now, he will be returning to the US to face those charges, a decision that might be easier on him in the short term. When the former CEO was first arrested in the Bahamas, he was denied bail and deemed a flight risk. In the United States, it's possible he could be released on bail.

Bankman-Fried has previously said that he "didn't ever try to commit fraud," and doesn't believe he's criminally liable for the fall of FTX. The New York Times reports that a defense lawyer representing Bankman-Fried in the Bahamas says that he's returning to the US because he "wishes to put the customers right, and that is what has driven his decision."