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Data Sheet—Saturday, December 12, 2015

December 12, 2015, 5:22 PM UTC
Fortune

A mysterious package arrived at my desk on Thursday morning.

Inside: a slim pamphlet with day-glo pink type set on a vibrant—almost radioactive—mint green cover. A tiny (and exceptionally fragile) llama figurine accompanied a note. The booklet, I learned, was an excerpt of a literary work that’s been making the rounds through tech and media circles. Iterating Grace, it’s called. Author unknown.

The package arrived the morning after Wired and Gizmodo published dual exposés purporting to unmask the alleged mastermind behind the Bitcoin cryptocurrency protocol. Their “outed” architect? A highly suspect—barely known—Australian man who—incomprehensibly to Bitcoin backers—boasted ties to governments and intelligence agencies. The legendarily pseudonymous Satoshi Nakamoto was a suit all along. Go figure.

Reporters everywhere—hot on his scent—proceeded to debunk the stories, and to dox the newly named suspect. Every bit of corroborating evidence imploded. The man’s public encryption key? Likely forged and backdated. His blog posts? Counterfeit, amended ex post facto. His PhD? Never earned. His supercomputer? Disputed, unconfirmed. As far as anyone can tell, the whole affair was likely an elaborate hoax.

Cloaked artists allure us. The masked electronic music duo Daft Punk, the un-photographed writer Thomas Pynchon, the shadowy street artist Banksy. Anonymity, pseudonymity, obscurity. The mystery draws us in.

Computer security researchers are perennially engaged in this kind of work: attribution. Who hacked whom, and why? Identity poses problems in cyberspace. Wily attackers cover their tracks, adopt disguises, and slink away while guards are unawares. At this same time last year, one might recall, the whole world was captivated in the hunt to determine whether or not North Korea really did hack Sony Pictures Entertainment. (Probably did.)

Maybe it matters. Maybe it doesn’t. For most of us though, the mystery of authorship enthralls. Anyway, I’m on holiday through the rest of the year. I plan to read books—maybe I’ll start with Iterating Grace. In the meantime, I leave you in the hands of my very capable colleagues. They’ll handle Cyber Saturday for the next few weeks. See you in 2016, dear readers.

More news below.

Robert Hackett

@rhhackett

robert.hackett@fortune.com

Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. Fortune reporter Robert Hackett here. You may reach me via Twitter, Cryptocat, Jabber, PGP encrypted email, or however you (securely) prefer. Feedback welcome.

THREATS

ISIS trolling day happened. The hacker group Anonymous took to social media to poke fun at the self-declared Islamic State, or ISIS, on Friday. The group encouraged others to get in on the act, targeting members and sympathizers of the terror group with jabs, photos edited to contain images of ducks, and the hashtag "#Daeshbags." (Fortune)

Encryption debate blazes again. FBI director James Comey testified before the Senate Judiciary Committee on Wednesday to resume his push for "backdoor" access to peoples' encrypted communications. For the first time, he cited a specific case in which decoding scrambled messages might have helped: on the morning of a recent shooting in Garland, Tex., one of the attackers allegedly exchanged 109 encrypted messages with an overseas terrorist. Those messages are unreadable to law enforcement officials. (New York Times)

Expect an anti-encryption bill. Senator Diane Feinstein (D-Calif.) announced her intention to spearhead a piece of legislation that would require tech companies to cooperate with law enforcement officials, decrypting their customers' data and assisting investigations when necessary. "Encryption ought to be pierced," she said, if doing so could help put the kibosh on criminal conspiracies. (Hill)

Ted Cruz campaign allegedly misused Facebook data. The Republican presidential aspirant employed the services of a behavioral data analysis firm in order to target potential supporters. The problem? The company he hired, Cambridge Analytica, appears to have built psychological profiles on certain Facebook users, who willingly participated in the program, as well as their friends, who did not. (FortuneGuardian)

Palantir Technologies raises $680 million. The data analytics firm currently valued at $20 billion expanded a $500 million funding round announced in July by a third. Only Uber and Airbnb top the star "unicorn" startup—a venture capital-backed private company—in value. (Fortune)

Telegram has a crypto flaw. The chat app says it uses “a unique custom data protocol" to cryptographically secure the messages of its users. The home-brewed encryption is not as secure as other rigorously tested varieties, researchers found in a recent audit of the code. (Vice Motherboard, Cryptology ePrint Archive)

Wyndham Hotels settles data breach lawsuit. The Federal Trade Commission sued the hotel group for having poor data security practices that led to the leak of more than 619,000 of its customers' personal information. The ruling, which sided in favor of the FTC, puts Wyndham on the hook to adopt a number of safeguards—and it strengthens the FTC's position in holding companies accountable for meeting certain standards. (Fortune)

IBM pulls "hack a hairdryer" ad campaign. The tech giant decided to yank a marketing campaign designed to stoke girls' interest in science and technology when consumers found the cultural message offensive. Many people found the implications to be sexist. (Fortune, Fortune)

Hacking campaign targets dissidents and journalists. Computer security researchers exposed the methods of a South American cyber espionage group linked to the death of prominent Argentinian lawyer. The researchers, who were repeatedly threatened during their investigation, suspect the hacking group is a state-sponsored outfit. (Fortune, Citizen Lab)

Tor names new executive director. The non-profit organization known for developing self-named Internet anonymity software has appointed Shari Steele to its top leadership role. Previously, she helmed the Electronic Frontier Foundation, a well-known privacy group, for a decade and a half. Side note: France has decided not to ban Tor (or public Wi-Fi, for that matter) in the wake of the Paris terror attacks, a proposal that officials briefly entertained in the supposed interest of national security. (Tor, Ars Technica)

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ACCESS GRANTED

Should law enforcement officials hack criminal suspects?

The Federal Bureau of Investigation recently made an unprecedented admission: It uses undisclosed software vulnerabilities when hacking suspects’ computers.

Amy Hess, head of the FBI’s science and technology arm, recently went on the record about the practice with the Washington Post. “Hess acknowledged that the bureau uses zero-days,” the Post reported on Tuesday, using industry-speak for generally unknown computer bugs. The name derives from the way such flaws blindside security pros. By the time attackers have begun taking advantage of these coding flubs, software engineers are left with zero days to fix them.

 Never before has an FBI official conceded the point... Read the rest on Fortune.com.

TREATS

Serial's back! Featuring an AWOL soldier. (Serial)

"FAIRVIEW." Retired Cold War tower, or AT&T spy program? (Atlantic)

Dark Web "merch." Drugs, guns, and murder! Oh my! (Fortune)

Super secret cyberweapons. Where? What? How? (Politico)

Luke Skywalker. Radicalized terrorist? (Decider)

FORTUNE RECON

Verizon's Sponsored Data Shouldn't Hurt Net Neutrality by Stacey Higginbotham

Abe Looks to India for Growth (and Insurance Against China) by Geoff Smith

UPS Says Your Holiday Packages Will Get There On Time by Phil Wahba

Researchers Have Found a New Way to Get Machines to Learn Faster by Hilary Brueck

Why PepsiCo Is Letting its Yogurt Joint Venture Expire by Jennifer Reingold

ONE MORE THING

The United States is running low on Hellfire missiles. The Air Force has dropped 20,000 bombs on ISIS since it went on the offensive in August 2014. General Mark Welsh, the Air Force's chief of staff, recently said that the country is expending munitions quicker than it is replenishing them. (Fortune)

EXFIL

“We’re losing a lot of people because of the Internet. We have to see Bill Gates and a lot of different people that really understand what’s happening. We have to talk to them about, maybe in certain areas, closing that Internet up in some way.”

Republican frontrunner Donald Trump, proposing at a campaign rally on Monday an ambiguous plan to censor portions of the Internet in order to digitally combat the Islamic State. Hillary Clinton, Trump's Democratic counterpart in the 2016 presidential race, suggested a similar idea a day earlier when she said that tech companies should block the terrorist organization's online content and communications. Fortune attempted to contact Gates (via his charitable organization) in order to request comment, but received no reply. (Fortune)