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Chinese national charged with operating ‘world’s largest botnet’ linked to billions in cybercrimes

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Chinese national charged with operating ‘world’s largest botnet’ linked to billions in cybercrimes
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A Chinese national has been arrested for his role in operating a residential proxy service that was used to defraud billions of dollars from the U.S. government and fund his lavish lifestyle, which included buying luxury cars and property around the world, the Department of Justice announced Wednesday.

YunHe Wang, 35, was arrested on May 24 and charged with creating a massive network of hijacked computer devices, also known as a “botnet,” that was used to conduct cyber attacks, fraud, child exploitation, bomb threats, and export violations, the department alleged. Wang administered the botnet, called “911 S5,” through about 150 servers worldwide from 2014 to 2022, according to an indictment unsealed last week.

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About 76 of the servers were leased from online service providers based in the United States, the indictment said. The botnet infected over 19 million IP addresses in nearly 200 countries, including over 613,000 IP addresses located in the United States, according to prosecutors.

The Justice Department announcement comes after Wang and his two co-conspirators, Jingping Liu and Yanni Zheng, were sanctioned by the Department of Treasury for their alleged involvement with the malicious botnet. The department also imposed sanctions on three luxury companies Wang owned or controlled.

Authorities also searched Wang’s residences and seized assets valued at about $30 million as well as identifying other property valued at roughly an additional $30 million, prosecutors said.

“The conduct alleged here reads like it’s ripped from a screenplay,” Matthew Axelrod, assistant secretary for export control at the Department of Commerce, said in a statement Wednesday. “A scheme to sell access to millions of malware-infected computers worldwide, enabling criminals over the world to steal billions of dollars, transmit bomb threats, and exchange child exploitation materials — then using the scheme’s nearly $100 million in profits to buy luxury cars, watches, and real estate.”

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The Department of Justice partnered with the FBI and international law enforcement agencies in Singapore, Thailand, and Germany to dismantle the botnet and arrest Wang. The case is the latest in the federal government’s ongoing effort to thwart global cybercrime, which has become increasingly widespread.

These crimes can range from intellectual property theft to ransomware and can cost businesses billions of dollars in losses in addition to threatening critical sectors across the country, according to the Department of State. In recent years, federal authorities have expanded their international operations and country-to-country partnerships in order to better address cyber threats.

‘Urgency and severity of cyberattacks’: EPA urges water utilities to protect nation’s drinking water amid heightened cyberattacks

911 S5 Botnet ‘likely the world’s largest botnet ever’

FBI Director Christopher Wray said in a statement Wednesday that 911 S5 is “likely the world’s largest botnet ever.” According to the indictment, Wang allegedly spread his malware through Virtual Private Network programs and pay-per-install services, which allowed him to manage and control the roughly 150 servers.

Paying customers were then given access to proxied IP addresses that were linked to the hacked devices, the indictment said. Cybercriminals used those addresses to hide their locations and “anonymously commit a wide array of offenses,” the Department of Justice alleged.

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“These offenses including financial crimes, stalking, transmitting bomb threats and threats of harm, illegal exportation of goods, and receiving and sending child exploitation materials,” according to the department. “Since 2014, 911 S5 allegedly enabled cybercriminals to bypass financial fraud detection systems and steal billions of dollars from financial institutions, credit card issuers, and federal lending programs.”

Specifically, the botnet targeted COVID-19 pandemic relief programs and filed an estimated 560,529 fraudulent unemployment insurance claims, according to the indictment. Federal authorities confirmed that more than $5.9 billion was stolen as a result.

The indictment further alleged that Wang had amassed about $99 million — either in cryptocurrency or fiat currency — from his sales of the infected proxied IP addresses. He used the illicit proceeds to purchase luxury assets and property.

Wang bought property in the United States, St. Kitts and Nevis, China, Singapore, Thailand, and the United Arab Emirates, according to the indictment. He also had dozens of other assets, such as luxury cars, watches, international bank accounts, and cryptocurrency wallets.

Wang was charged with conspiracy to commit computer fraud, substantive computer fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. He faces a maximum of 65 years in prison.

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Cybercrime, COVID fraud in the U.S.

Cybercrime is a “significant and growing threat” to the country’s national and economic security, according to the State Department. As people become more dependent on information and communication technologies, the department said more criminals continue to shift online.

Wang’s arrest also comes amid a push from federal officials for organizations to update and follow cybersecurity guidelines. Federal agencies have issued multiple advisories for cyberattacks committed by foreign groups in recent years.

In January, the FBI and Department of Justice announced that they had “disrupted a botnet of hundreds of U.S.-based small office/home office routers hijacked” by China-linked hackers. The group, known as “Volt Typhoon,” targeted critical infrastructure organizations in the United States, such as water systems and electric grids.

The surge in malicious cyber incidents coincides with the rise in online communication during the COVID-19 pandemic, according to a 2023 cyberthreat study. Citing FBI data, the study said cybercrime increased by 400% during the pandemic.

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“Cybercriminals find the uncertainty brought by changing daily habits opportune and the increased virtual existence is converted into available attack vectors,” the study noted.

In the four years since the onset of the pandemic, the Internal Revenue Service has investigated over 1,600 tax and money laundering cases related to COVID-19 fraud potentially worth about $8.9 billion, the agency said in March. Cases included fraudulently obtained loans, credits and payments meant for U.S. workers, families and small businesses under the Coronavirus Aid, Relief and Economic Security, or CARES, Act.

Contributing: Josh Meyer, USA TODAY

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Genetic data is worth more than warm spit

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Genetic data is worth more than warm spit

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A quarter of a century ago, Scott McNealy, then chief executive of Sun Microsystems, famously dismissed consumer privacy in the internet age as an anachronistic distraction. “You have zero privacy anyway,” he said. “Get over it.” Judging by the way in which consumers have since posted details of their private lives all over social media and breezily ticked the intrusive terms and conditions boxes of many online companies, McNealy may have had a point.

But how we act and what we think can be two different things. Internet users do not appear to have “got over it” when it comes to privacy. Indeed, consumers are now telling pollsters that they increasingly worry about the misuse of their personal data and want stricter controls. A Pew Research poll in the US last year found that 81 per cent of respondents were concerned about how companies collected their data; 71 per cent expressed similar concerns about the government (compared with 64 per cent in 2019).

Such anxieties are all the more acute when it comes to highly sensitive personal information, such as genetic data, which not only affects one individual but all their relatives, too. When you spit into a tube and send it off for DNA testing, you are handing over unique data that cannot be anonymised. You are also sharing information about all your biological family, most likely without their consent. That makes it all the more critical that such data is secure. 

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In some cases, there are glaring concerns about who can access — or sell — that data. Several users of the London-based DNA testing company Atlas Biomed have recently expressed alarm about the security of their personal information. The business appears to be inactive — it is late filing its annual accounts and has not been active online. It reportedly did not respond to recent enquiries from the BBC and there has been speculation about its links with Russian business interests.

The Information Commissioner’s Office, which enforces Britain’s data privacy laws, also confirmed that it received a complaint about the company.

In the US, customers of the 23andMe DNA-testing service are also anxiously following the fate of the company, which this week admitted there was “substantial doubt” over its survival without the injection of fresh funds. Some 15mn people have used the service and around 80 per cent of them have agreed to share their data for scientific research. 

Anne Wojcicki, 23andMe’s co-founder and chief executive, has said she intends to take the company private and will not consider a third-party takeover. “We are committed to protecting customer data and are consistently focused on maintaining the privacy of our customers. That will not change,” the company said in a statement to the FT.

But users are unlikely to be reassured. 23andMe’s genetic data is not covered by the US federal Health Insurance Portability and Accountability Act (HIPAA), which applies to most medical data. It also suffered a serious data breach last year in which 6.9mn user accounts were compromised. Wojcicki has fallen out with the rest of the board, who have resigned en masse. And it is not clear what would happen to 23andMe’s data if the company went bust.

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“23andMe highlights very valid anxieties and fears people feel when they have given highly sensitive information to a company for a specific purpose,” says Sara Geoghegan, senior counsel at the Electronic Privacy Information Center in Washington DC. “Users deserve more than a pinky promise that their privacy wishes will be respected.” For more than 20 years, Epic has been campaigning for a federal privacy law that would protect users’ rights.

Such legislation seems unlikely given the anti-regulation stance of the incoming Trump administration — even if many Republicans are themselves concerned about data privacy. The only real alternative is for consumers to assert their power by wresting more control. They must press tech companies to minimise the data they collect, become more transparent about its use and ensure that user consent is voluntary and informed. “Even with the best possible laws, it will not be possible to stop criminals or foreign governments hacking into your data,” says Carissa Véliz, author of Privacy is Power. “Tech solutions are very important.”

Some digital services already offer privacy by design but there is currently little market incentive for their expansion. Users should contest McNealy’s fatalism and stimulate that consumer demand.

john.thornhill@ft.com

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Lindsey Vonn announces a comeback at 40, saying she's ready to race

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Lindsey Vonn announces a comeback at 40, saying she's ready to race

Record-setting skier Lindsey Vonn says she is mounting a comeback at age 40. She’s seen here in 2017, speaking to media ahead of the Pyeongchang Winter Olympics.

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Lindsey Vonn got a new knee earlier this year — and now she wants to test herself at the highest levels, announcing that she is training to return to competitive alpine skiing. Vonn, 40, says she’s finally feeling healthy, five years after she retired.

“Well, it’s off to Colorado…. I hope the [U.S. Ski Team] uniform still fits,” Vonn said on Thursday via Instagram.

News of Vonn’s comeback bid comes 20 years after she won her first World Cup race. The women’s season for the 2024-25 Alpine World Cup began on Oct. 26 and will end in March 2025.

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“Getting back to skiing without pain has been an incredible journey,” Vonn said in a release from U.S. Ski & Snowboard. “I am looking forward to being back with the Stifel U.S. Ski Team and to continue to share my knowledge of the sport with these incredible women.”

Vonn is one of the most decorated skiers of all time, and she still holds a number of records, including most World Cup victories by a woman or man in the downhill and the super-G. Her 82 World Cup wins trail only American Mikaela Shiffrin and Ingemar Stenmark of Sweden. She and Shiffrin are in an elite club of female skiers who have won World Cup events in all five disciplines: downhill, super-G, giant slalom, slalom and combined.

“Her dedication and passion towards alpine skiing is inspiring and we’re excited to have her back on snow and see where she can go from here,” U.S. Ski & Snowboard President and CEO Sophie Goldschmidt said.

Vonn’s ability to excel in speed disciplines has taken a toll on her body, with knee injuries — and at least nine surgeries — disrupting her career on the competitive circuit, even as she continued to rack up wins between setbacks.

“I have severe tri-compartment degeneration but the main compartment that has been painful is the lateral compartment, or the outside of my knee,” Vonn said in April. She described a type of knee replacement surgery in which bone is removed and replaced with titanium pieces.

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“With this new knee that is now a part of me… I feel like a whole new chapter of my life is unfolding before my eyes,” she said last month on Instagram.

If Vonn is able to return, it would be the latest sign that her abilities aren’t subject to the same constraints as other athletes. Back in 2012, her thirst for speed and competition led her to argue for being allowed to race against men, a request that the International Ski Federation rejected.

Weeks later, she skied at up to 136 kilometers per hour (84.5 mph) in a downhill training run at Lake Louise in Canada — a speed reportedly unmatched by male skiers at the event.

Vonn had recently hinted at a potential return to racing. And in recent months, her presence on slopes in New Zealand and Austria caused a stir, fueling speculation that she might try to resume competitive skiing in December, when World Cup races will be held in Colorado.

Sofia Goggia, Vonn’s friend and fellow speed specialist, welcomed those rumors, saying that a) it’s a sign Vonn feels healthy; and b) it would be fun to have her back.

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“It would be great to race in the World Cup with my idol,” Goggia told the Olympics.com site last month.

Even before her knee surgery, Vonn set out last year to accomplish an imposing goal: taking on the terrifyingly steep Streif downhill course in Kitzbühel, Austria. Early in the course, racers face an 85% incline known as the Mausefalle (the Mousetrap). At the steepest jump, soaring distances can top 260 feet.

“When you look out of the starting gate and it’s dark and you can’t see the Mausefalle, it looks like you’re jumping off the edge of the world and it’s very intimidating,” Vonn said afterward.

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She tackled the roughly 2-mile course, and its soaring jumps, at night. On a pair of borrowed skis and on a knee she would soon replace, Vonn’s speed reportedly topped 62 mph.

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Ukraine’s bonds jump as investors bet Trump will end war

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Ukraine’s bonds jump as investors bet Trump will end war

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Ukraine’s sovereign bonds have surged in price as investors bet that the incoming US administration will push for a quick end to the war with Russia.

The dollar-denominated bonds have risen 12 per cent in the past month, in expectation that the re-election of Donald Trump will lead to a ceasefire and boost Ukraine’s capacity to repay creditors.

The jump in the price of Ukrainian bonds, which one investor in the country called “the unlikeliest Trump trade ever”, comes as bets relating to the new administration have swept global financial markets in recent weeks.

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Trump has said he will end the war in Ukraine “within a day” of returning to the White House, though he has not offered specifics on how this would be achieved.

The rally has come just over two months after Kyiv completed a restructuring of more than $20bn of debt in one of the fastest and biggest sovereign debt workouts in modern history.

Bond investors are betting that the country will be prepared to accept a peace deal that involves permanently giving up territory it has lost in the war, and that its economy will recover quickly in the years ahead.

“The main part of the trade has really been based on the war ending, or at least the possibility of Trump pushing through the start of negotiations,” said Thys Louw, portfolio manager at Ninety One, which owns some Ukrainian bonds.

Among investors to own significant holdings of Ukrainian debt is fund manager BlackRock, which was a member of the bondholder committee that led the restructuring talks. BlackRock declined to comment.

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Ukrainian debt has outperformed emerging market indices since mid-October, when markets began to price in a Trump election victory.

Ukraine’s bond maturing in 2036 has risen from 44 to 49 cents on the dollar over the past month. So-called “GDP warrants” — debt securities issued under an older debt restructuring that will benefit from the country’s return of growth — having climbed even more sharply.

A bond owed by Ukrenergo, Ukraine’s state grid operator, has rallied more than 160 per cent this year to 67 cents on the dollar, despite renewed Russian attacks on infrastructure.

London-based hedge fund firm Shiprock Capital has profited from the jump in the warrants and Ukrainian corporate debt and is up 31 per cent this year to the end of October, according to an investor letter seen by the Financial Times.

Shiprock did not respond to a request for comment.

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During the early stages of the war, bondholders agreed to a halt on Kyiv’s interest payments. The September restructuring, which is designed to pave the way for Ukraine’s return to bond markets, ended the two-year freeze.

Under the September deal, investors agreed to take losses of more than a third on their bonds to help Ukraine control its surging wartime deficits — years before official creditors such as the UK, the US, Germany and Japan are set to restructure their own debts.

In return for agreeing to accept upfront losses, bondholders were also given the chance to receive higher payouts if Ukraine’s war-ravaged economy beats growth targets in the years ahead.

Some investors have cautioned that the outlook for Ukraine’s bonds is far from clear.

Mohammed Elmi, a portfolio manager at Federated Hermes, said he was sceptical of the market’s belief in Trump’s ability to secure a rapid peace deal.

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“I don’t fully subscribe to that kind of bullish view,” he said. “There is still a significant amount of unanswered questions” about where a settlement would leave Ukraine’s postwar economy and whether it would be a priority for the new US administration.

“Trump has a lot to do, with a big policy agenda to go through. These negotiations could also be quite prolonged,” he said.

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