
The story of how hackers managed to compromise the US Government’s official SEC Twitter account to boost the price of Bitcoins, AI isn’t helping reduce the rife conspiracy theories inside classrooms, and is the funeral bell tolling for ransomware?
All this and more is discussed in the latest edition of the “Smashing Security” podcast by cybersecurity veterans Graham Cluley and Carole Theriault, joined this week by special guest Jane Wakefield.
Warning: This podcast may contain nuts, adult themes, and rude language.
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This transcript was generated automatically, probably contains mistakes, and has not been manually verified.
The point of it is to educate people, to hear from people who have fallen— I shouldn't use that phrase.
That's one phrase we shouldn't use, falling for, because one of the points of the podcast is to change the language around it so that we don't see victims as being to blame for these things because, as you probably know, these scammers are so sophisticated that anyone these days can fall for a scam.
And actually, the woman, the academic that worked with Interpol on that, changing that language, is Elizabeth Carter, who is on the next episode and talks to you about that.
It's really fascinating stuff, actually. Yeah, makes you think.
But first, let's thank this week's wonderful sponsors: 1Password, Tripwire, and Scanner.dev. Now, coming up on today's show, Graham, what do you got?
On January the 9th, 2024, the official Twitter account of the US Securities and Exchange Commission, the SEC, those government dudes over in America who look after all the trading exchanges, they posted a message up on their Twitter account and it said, "Today the SEC grants approval for Bitcoin ETFs for listing on all registered national securities exchanges.
The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection." So this was a major announcement in the financial world, a big win for cryptocurrency.
For weeks, traders had been speculating that the SEC was about to announce whether it would approve the trading on exchanges of funds that tracked the value of bitcoin.
And here it was. Good news if you were a crypto bro or gal. Oh, yes. Well, yeah. What do they do? Is that called a crypto gal? I don't know. Shouldn't it be crypto sis?
There wasn't much about the tweet which would raise suspicion amongst typical Twitter user, even those who would consider themselves kind of security savvy if you saw it.
Scammers had posted that unauthorised message to the SEC's 660,000 followers to influence the price of bitcoin. Wow. And as you can imagine, it had an impact.
The market price of bitcoin immediately leapt up to nearly $48,000. Ah, the innocence of a year ago. Today, bitcoin is about $100,000 now for one bitcoin, isn't it?
I mean, that's a tragic case, but no, it was written down on a piece of paper and I lost the piece of paper.
And it was gifted to me at a TED conference and I didn't think any more about it. But yeah, I look back now thinking, oh, that was probably a piece of paper I shouldn't have lost.
You know, we all wish perhaps that we'd bought some back then.
He said no decision had yet been announced and the account had been hacked, he said. And as the truth emerged, the price of bitcoin slipped back down again.
And potentially, of course, some people will have lost money as a result of that.
And there was one scammer who was so opportunistic.
I don't think he was connected with the original hack, but he actually created a fake SEC account on Twitter where he published an apology for what had happened and invited anyone who had lost money as a consequence of the hack to visit his refund site.
And one of the things we were talking about in the upcoming episode is how these scammers have their own conferences and award ceremonies to kind of pat each other on the back at how good they've got at scamming people.
And you're absolutely right, it's layering scam upon scam upon scam, isn't it?
I was on Reddit trying to look for somebody that might be able to help me out with the issue of money muling.
So we are living in this sort of multi-layered world where the scammers are not just one step ahead of us, but about seven steps ahead of us, it would seem.
And Twitter said, hey, it's nothing to do with us. They posted a message saying the account didn't have two-factor authentication enabled.
And if what Twitter said was true, that was kind of embarrassing for the SEC, not only because any major account should have multifactor authentication in place, but especially because remember the SEC chairman, Gary Gensler, a few weeks before the hack during Cybersecurity Awareness Month in October, he had posted on Twitter telling everyone you should always secure your financial accounts with strong password and multifactor authentication.
So he'd actually been proclaiming about the importance of this.
A 25-year-old man called Eric Council from Athens, Alabama, has pleaded guilty to charges that he conspired with others to carry out a SIM swap. Yeah.
So we talked about SIM swaps before.
This is where hackers get phone companies to reassign a cell phone number from the legitimate user to a SIM card controlled by the fraudster instead, which makes this whole story from Twitter where they said there wasn't multifactor authentication in place rather hard to comprehend because the only point at which your phone number would really be relevant in terms of hacking an account would be if you had multifactor authentication, if you'd give them a number and it was maybe texting you the 6-digit code or something to confirm that you were the account holder.
So it doesn't make much sense, but then a lot of stuff which comes from Twitter these days doesn't make much sense.
Anyway, this Eric Council guy, this 25-year-old guy, he has online handles including Ronin, Giant Schnauzer. I don't know if it's his type of dog.
I don't know why he's Giant Schnauzer, but Easy Money is one of his other names online.
He was a member of a gang that performed SIM swaps for money and hacked social media accounts.
And in early 2024, he received a message—like I said, he's in a gang, and he got a message on Telegram from one of his other co-conspirators, which included the personal information of their intended victim, someone who ran the SEC's social media account.
And he received not only their name and Social Security number and those kind of details, but he also received a fake ID card with the victim's name, but with the photo of the scammer.
Eric carries around with him a mobile ID card printer. And he goes with that to Huntsville, Alabama.
He went into a mobile phone shop, and he claims he wants a new SIM for what he claims is his AT&T phone number, but is of course really the victim's.
And he shows them his fake ID, which he's printed out.
And the only thing he does with this Apple iPhone is turn it on, put in this brand new SIM card, and he receives the two-factor security reset code for the SEC Twitter account because his accomplice has just tried to get into the account.
Maybe he said, oh, I've forgotten my password or something like that.
And it sent the authentication code to the number it has on that account as being the account owner for the SEC's official Twitter account, right? So he's got the security code.
His co-conspirator then uses that code to gain access to the SEC's Twitter account and posts the message that shifts the price of bitcoin.
And then he jumps in his car, drives 40 minutes or so back to his hometown of Athens, Alabama, where he goes into their local Apple Store, takes the iPhone back and says, I don't really want this after all.
And he thinks, brilliant, I've got away with it. As you can imagine, journalists like Jane, right? Tech journalists went crazy about this news because the bitcoin price has changed.
An official government Twitter account has been hacked, posted fake news up there.
And it was in June 2024 that Eric, our hacker, his apartment in Athens, Alabama was searched by the FBI. There'd been a number of other SIM card swaps going on as well.
They'd managed to locate him and they found his fake ID card and the portable ID card printer. They searched his laptop and they noticed some of his internet searches.
And my guess is he'd been worrying that he might be in quite hot water about this SEC hack because some of the things which he'd searched for on his computer were things like SEC hack, Telegram SIM swap.
How can I know for sure if I'm being investigated by the FBI?
He searched, what are the signs that you're under investigation by law enforcement or the FBI, even if you haven't been contacted by them?
But just with a classic murder kind of story, there's always something that lets you down.
And often it is just our own sort of natural human curiosity and our fear of being caught that is ultimately what's going to expose you.
But yeah, it just shows how sophisticated these hackers are getting.
Although it does feel if this SIM card swap is such an easy way of getting hold of those important details that get you into an account, there must be a way surely of stopping that?
If you've lost your phone, if you don't have your SIM card, if you want to switch it, you don't want to have to go through too many hoops.
I mean, obviously, we all want security, but we also want convenience.
It's I haven't got my phone, I can't do my work, I've fallen off the side of a bridge, I can't retrieve it any longer, get me back online.
If someone comes in, buys a phone, and then comes back and says, actually, I don't want it.
It's a bit why would you not want a phone that you've literally just purchased unless you've been up to no good on it?
And I wonder, if at some point, maybe one of the mobile phone operators who he went into took a copy of his ID and may have got his photograph, and maybe someone was able to identify him that way and send the cops in his general direction.
I imagine it was some of the other thefts which were going on, which ultimately led the cops to his door. Yeah, yeah, yeah.
But clearly there's other— because he didn't actually do the hack of the account. He was the guy doing the SIM swap and passing on the reset code.
So there are other people as yet unknown to us who were also involved in this.
And it'd be interesting to see in the fullness of time whether any of those guys are also caught, because clearly they are making a lot of money out of doing hacks this too.
Jane, what's your story for us this week?
But when I do go on social media, I can't help but notice loads and loads of fake videos, harmless stuff like wildlife videos that purport to show a polar bear being rescued on a polar vessel.
And it's a cute thing, so it gets lots of hits and it gets lots of attention and it grabs lots of eyes.
You look at the comments below and it's firmly divided by people that are just like, "Oh, this is so cute.
Oh, thank you for rescuing this polar bear," to people that are like, "This is AI. This is clearly AI-generated.
Don't fall for it." And I feel like we are entering this new digital divide between those people that see things with a critical eye, and obviously I'd like to think that journalists are often included in that, and people that can't see the wood from the trees or the truth from the fake, to put it in terms of what I'm talking about here.
That's kind of the background as to something I'm just becoming increasingly worried about as we go into a new era of AI.
And of course, that coincides with the Paris AI Summit, which is the third talking shop around AI that we've seen. We had one in South Korea, we had one obviously at Bletchley Park.
I'm a bit of a sceptic about what these things actually do in terms of moving the debate forward.
It's often just an excuse for lots of powerful people to stand together and talk about this issue.
And I saw a report in The Times yesterday written by the Commission into Countering Online Conspiracy in Schools, which is not a commission I'd ever heard of before, and it sounds quite terrifying in some ways.
But its report is even more terrifying because it relates that conspiracy theories are now rife in the classroom.
Young people are more inclined to trust social media influencers than the government when it comes to news sources and forming their views of the world.
And you know, those views of the world are formed by things that I've just described— these fake videos, these kind of conspiracy theories that will get lots of hits, so they're gonna attract a lot of eyeballs, so they're going wild on social media.
But unfortunately for a younger generation that is getting most of its information, I'm concerned that 80% of what they think they're learning from social media is actually just complete rubbish.
And as an ex-teacher, before I became journalist, I just think this is really, really worrying.
We were hanging out with some young teens this weekend, they were on the phone the whole time.
Who doesn't want to watch a polar bear seemingly being rescued, or all of the other things that you might scroll through?
And who doesn't want to read about why definitely people didn't land on the moon. I mean, that's far more interesting in some ways than the truth, which is that, you know, they did.
But it's getting involved in those conspiracy theories is really, really grabbing the attention of youngsters and shaping how they see the world.
And these people are going to be the people that go out and make decisions in future.
And if they're being grounded in disinformation and fake news and AI-generated content, then that's concerning.
They've got a whole unit now set up called BBC Verify.
And again, not only are children believing more and more conspiracy theories, they're believing less and less mainstream news.
They're very, very cynical that mainstream news is telling us the truth, which is also very disturbing.
But the BBC did an experiment and it gave OpenAI's ChatGPT, Microsoft's Copilot, Google's Gemini, and Perplexity AI content from the BBC website and then asked them questions about the news.
And it said that the resulting answers contained significant inaccuracies and distortions, which, you know, again, increasingly we're relying on AIs to summarise content for us, aren't we?
Because essentially we're quite lazy. You know, if we can get an AI to tell us the gist of something, then why wouldn't we?
But if the gist of that is wrong and is getting it wrong, then this is setting in motion a kind of slow march towards a post-truth era that I don't think any of us really want to live in.
But I don't quite see what we do about it.
It does feel like we're on a constant slow march towards this world where trust is being dramatically eroded.
So things that we used to be able to trust, or as you say, I mean, news outlets like the BBC, for instance, which historically has been trusted, a lot of people don't trust it so much now.
And if we see AIs as well beginning to subvert the things that news outlets are saying, then we're in a right old pickle.
She said, we live in troubled times, and how long will it be before an AI-distorted headline causes significant real-world harm?
Well, we've already seen with this summer riots last year on the back of a lot of disinformation around the terrible stabbings of young children in Liverpool, that, you know, this, it can cause all kinds of real-world harm.
And I hope that this takes center stage amongst the discussions at the Paris AI Summit rather than lots of posturing from politicians and powerful AI companies.
But I'm not entirely sure that it will.
We've seen them policing and monitoring that for misinformation. And as we all know, in the last couple of months, that has dramatically changed.
And they're now saying, we're not going to do that anymore. They're viewing that not as safety and handling of misinformation, they're rather portraying it as censorship.
And they're saying, well, free speech means you can say whatever you like. Unfortunately, that means people will be able to talk utter nonsense and dangerous nonsense as well.
So it doesn't feel like those sites are going to be helping us very much in stopping the spread of this kind of fakery.
To deal with this because it's got so out of hand that there's no way that any sort of moderation process, even one that's led by AI, can really get to grips with the amount of disinformation that we have out there.
So, it's kind of too late, you know, this stuff is already out there. And what do AI systems learn from? They learn from data on the internet.
So, they could well be learning from misinformation. So, we are in this sort of never-ending circle of, well, what would you call it? A never-ending circle of doubt, I suppose.
Abused, for want of a better word. But yeah, it's not good. And I don't quite know how you roll back on that because I think it's probably in many ways too late.
Because people don't step back from things and think and question. They just sort of throw themselves into it and they believe whatever they're told. Well, we'll see.
Gosh, I feel I've really brought the mood down with that story.
I mean the time of year when industries like Smashing Security and technology issue their annual reports.
And it's not easy, right? Researchers answer with one word. They give you a level stare. Massive datasets.
I don't understand them enough to understand if there's something interesting in them. I mean, there's a lot of fond memories. We once used a Wordle that was not a Wordle.
What's it called? A word cloud.
I'm sure no one is surprised to hear that ransomware featured quite highly in forecasting this coming year.
Like, for example, we have the National Cybersecurity Alliance and they say ransomware will escalate.
They say critical suppliers, so those that entire industries rely upon, will continue to be targeted in 2025.
Sophos put out a report saying ransomware attacks are surging with 59% of organizations hit last year, and they say that's only going to grow.
Zscaler report said AI-powered social engineering attacks will surge and fuel ransomware campaigns. So in short, ransomware is painted as an utterly relentless threat.
But I thought there's got to be some good news around this.
And rather than having a doom and gloom story, we could look at the flip side because I think there is a definite silver lining of hope.
So one good news component is the UK Home Office is proposing a targeted ban on ransomware payments.
So under the proposal, public sector bodies, including local councils, schools, and NHS trusts, would be banned from making any payments to ransomware hackers.
And the government says this would strike at the heart of the cybercriminal business model. What do you think about that? Do you think it'll make a difference?
I think it's all very well in principle having a don't pay the ransomware guys policy, but if your organization has got sensitive details about, for instance, school children, that was, well, it could be medical records or something like that.
Do you really want that to be published online?
Or do you want your systems to be down for months and months and months and people not to be able to get their operations or your kids to be educated?
Sometimes the least worst decision may be to pay the ransomware guys, unpleasant and unpalatable as it may be. My view is you can't have a hard and fast rule.
There have been talks about banning payments in the past, but they've stopped short of imposing an outright national ban on them.
We want plenty of crypto being bought and sold and transferred.
Say it's a business and as Graham said, you know, sensitive data, if they don't pay the ransom, is the government going to be responsible for all the leaking of that company's secrets, its IP stuff?
So it'll be done in consultation, which may be a good thing because of course you want the authorities to gather information as to who the ransomware gangs have caught, especially if they're on their trail.
Because we're not really clear who pays and who doesn't at the moment and how much people pay.
And also, you know, if you pay, does that mean that they go away and that you get your data back, or do they just take that as a sort of starting payment and continue to sort of blackmail you and say, well, we need— actually, we want some more once you've opened the door?
So I think the starting point for all this should be a lot more openness about what happens in these attacks rather than sort of imposing bans on what people, how people decide to sort of act on them.
In October 2023, there was a US-led alliance of more than 40 countries who vowed not to pay ransoms to cybercriminals in a bid to starve the hackers from their source of income.
So yeah, it's tricky, isn't it?
You insure your house or you insure your car and things like that, and you kind of think, oh God, I've got to give these people money. And it's, you know, will I ever get this back?
So in some ways, ransomware, you might consider it a business expense. It's simply something that we have to do occasionally because our security screws up occasionally. Wow.
Well, one of these reports had a different story because everything was very doom and gloom, but the recent Chainalysis report said ransomware payments fell by 35% year on year last year.
So where last year they grabbed $800 million in extortion payments, the previous year had been much higher, $1.25 billion. So what happened to make this not as profitable a year?
So one of the things was LockBit. There were arrests last year and takedowns, big ransomware gangs.
So now, rather than having these big fat players, you have lots of itty-bitty players.
And the itty-bitty players, while of course they can still cause damage, does reduce the attacks on so-called big game targets. So key target, a very valuable target.
It's not at death's doors just yet. And all this fragmenting of groups, Rapid7 say that they're splintering and rebranding, making it more difficult to track and mitigate them.
So there's some dark spots on my silver lining of my cloud. But I do think that a business dries up if there's not enough money to be made.
Because there's a lot of effort that goes in, especially if you have a very select high-value target.
And if you weren't convinced that you would make a payday, would you maybe go do something else? And if the ransomware money train derails, where do they go?
You know, where do the cyber twunks go to make their cash?
And the extraordinary thing which has happened with ransomware is it's an incredibly effective way of making money.
But I think there's a lot of, you know, right now they just take the data and say, pay us and hope that we don't put it out there.
The exfiltration, I think, is largely because people have backups so people can recover and get back up and running. Hopefully, hopefully they have backups.
But the threat of your customer data, of your partner data, of your internal intellectual property being released.
That, I think, is the scary thing, which makes them really— makes companies sweat at night if they've fallen victim to a ransomware gang.
It's not so much the recovery, actually, it's the potential impact.
It's like a mafioso deal.
These gangs care about their image and they don't want word getting round that the XYZ ransomware gang can't actually be trusted.
It may be an illegal business, but they don't want people thinking, oh, well, there's no point paying them because they con you again.
So I think in many cases, actually, the ransomware gangs do do what they promise.
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Favorite part of the show, the part of the show that we like to call Pick of the Week.
Could be a funny story, a book that they read, a TV show, movie, a record, a podcast, a website, or an app. Whatever they wish. It doesn't have to be security related necessarily.
He's been doing them for about 20 years, I think. Really, really great stuff. And I recently came across an article which he wrote.
And, you know, rather than one of his cartoons, and it was an article he wrote in The New Yorker. And it's called The Space Doctor's Big Idea.
And this is him explaining Einstein's theory of general relativity. Or rather, as he describes it, the big idea of a doctor with cool white hair.
And the reason why he describes Einstein's general relativity in those terms is because the entire article is written using only the 1,000 most common words in the English language.
So if you've ever wanted to understand general relativity, then go to the link on The New Yorker where Randall Munroe has explained it all in very simple terms. And it got me.
And I think there may be a case for using only the 1,000 most common English words. I'm of an age now where it's hard to explain to me some of the modern world.
Maybe I could do with an encyclopaedia which uses just the 1,000 most common English words to explain to me how they manufacture steel.
I think we should have a lot of things that are very boring, like reports and terms and conditions and contracts and all those very boring things that we have.
Well, we don't read through, do we, to be honest? We just click to the end and say, okay, yep, we've read all this.
Now, Jane, what's your pick of the week? Or do you have a nitpick of the week?
And also it goes against what you were saying earlier about the importance of two-factor or multifactor authentication, because I have had my own personal hell today.
I've been locked out of my Microsoft account. All I want to do is pay a bill.
So I've had to revert to the very old-fashioned way of using a telephone and talking to customer service, which of course is automated, and then they put you in a queue, a very long queue.
It was about an hour queue, and then I got through to somebody, and then I got cut off.
So all the classic things that irritate us on a daily basis, and I've been sucked into this Kafka-esque black hole of just not being able to do a very simple thing and it taking me hours to do it.
And I totally understand that multifactor authentication is a very important thing, but when it goes wrong, it's a bloody nightmare.
Very nearly swore there, and I know I can, but I'm not going to because, you know, I mustn't. I mustn't be angry about this.
I just must be very calm and think, you know, this will all be solved eventually.
And I was reading something that Jamie Bartlett, him of Crypto Queen fame, wrote the other day about how digital life seems to come with an awful lot of admin.
He was talking about parking apps and how, you know, you go to park your car and you have to do it on an app, but you haven't got the app, so you have to spend ages downloading the app, or you might take QR code that a scammer has put a ticket over, and then you're suddenly, you know, giving your money to a scammer.
We are in a world where there's an awful lot of admin to get small things done, and this is not what we were promised. This is not what we were promised.
We were promised that life was going to get much easier and much more simple.
Why not?
Her fourth novel, but the first I've read. Have either of you read it or heard of her?
And she's been hired to disrupt to corrupt a small farming cooperative in France. Okay, so her job is to infiltrate them, spy on them, and influence their plans.
But through her research, she learns stuff which threatens to change her game plan or her worldview, even her raison d'être. It threatens that.
She's a great character, and she's ruthless. I mean, it's her job to dupe people, right, and gain their trust.
But woven through this thriller is almost a philosophical treatise about what it means to be human. I know it's— sorry to get deep again, but yeah, it's great.
And I don't stand alone. It's appeared on 16 lists of best books in 2024. I loved it. So pick of the week, Creation Lake by Rachel Kushner. Fantastic.
I'm sure lots of our listeners would love to find out what you're up to and maybe follow you online, what's the best way for folks to do that?
And yeah, I spend a lot of time there, very sadly.
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Hosts:
Graham Cluley:
Carole Theriault:
Guest:
Jane Wakefield
Episode links:
- SEC’s Twitter account hacked to say Bitcoin ETFs approved – Hot for Security.
- Twitter says it’s not its fault the SEC’s account got hacked – Graham Cluley.
- SEC Twitter hack blamed on SIM swap attack – Hot for Security.
- The SEC’s X account got hacked by a 25-year-old who went by ‘AGiantSchnauzer’ and got paid in Bitcoin, feds say – Fortune.
- Pupils share conspiracy theories for fun, with girls ‘more susceptible’ – The Times.
- AI chatbots unable to accurately summarise news, BBC finds – BBC News.
- US-led cybersecurity coalition vows to not pay hackers’ ransom demands – TechCrunch.
- 35% Year-over-Year Decrease in Ransomware Payments, Less than Half of Recorded Incidents Resulted in Victim Payments – Chain Analysis.
- Ransomware: proposals to increase incident reporting and reduce payments to criminals – GOV.UK.
- The 2024 Ransomware Landscape: ‘Looking back on another painful year’ – IT Wire.
- The Space Doctor’s Big Idea by Randall Munroe – The New Yorker.
- Reading guide: Creation Lake by Rachel Kushner – Booker Prizes.
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