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Data Sheet—Saturday, June 25, 2016

Putting aside Brexit for a moment, let’s review another major development in the realm of geopolitics this week.

Perhaps you’ll recall that last fall, United States President Barack Obama and Chinese President Xi Jinping shook hands on a dubious cyber truce: They promised that neither nation would hack the other’s companies for financial gain. Fat chance, right?

Skeptics (myself included) considered the treaty to be little more than an excuse for a photo opp—and, moreover, as a way for Xi to save face on the eve of his first state visit to the U.S. (Government officials were considering slapping sanctions on China for its colossal intellectual property theft at the time, a move that surely would have made for awkward dinner conversation.) Given the scale of China’s digital shoplifting, nobody this side of the Pacific seemed to think the entente would hold.

Well, turns out China seems to be…keeping its promise! (That, or the country’s hackers have gotten way better at eluding detection.) So found cybersecurity firm FireEye, which released its discovery in a report earlier this week. The company said that, based on its data, the number of breaches attributable to China-based groups plummeted by 90% in the past two years. Yep, cue double take.

I had a chance to chat with Laura Galante, director of threat intelligence at FireEye, as well as Kevin Mandia, the company’s recently appointed CEO, about the news. “We’re seeing compromises of networks still,” Galante told me, mentioning that its difficult to know whether the intruders are state-sponsored and whether their motives are economic rather than political or military. (The latter is still fair game, per the terms of the espionage deal). “What we aren’t seeing is data theft at such a volume as before.”

Mandia, who took over as FireEye CEO this month, added that the decline in number of breaches doesn’t mean businesses should breathe a sigh of relief just yet, even though the news is positive. “The unfortunate reality is that you still have to build your moat of defend against the other threats that are still out there,” he said. Be assured: hackers still want your data.

You can read the interview here. Enjoy the weekend, dear readers, with the relative peace of mind that China-based economic cyberespionage has dwindled. At least for now.

More news below.

Robert Hackett


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 (see OTR fingerprint on my, PGP encrypted email (see public key on my, Wickr, Signal, or however you (securely) prefer. Feedback welcome.


Senate rejects FBI spying plan. The U.S. Senate narrowly voted down a piece of legislation that would have expanded the Federal Bureau of Investigation’s ability to use National Security Letters, highly secretive subpoena-like documents that the agency uses to collect information from people and companies. The bill would have given the FBI authority to demand that companies hand over more communications records on suspects. (Fortune)

Okta explores IPO. The digital identity management firm Okta has hired Goldman Sachs to lead an initial public offering that could come later this year. Unnamed sourced told Reuters that company is also considering a sale, though a spokesperson denied the account. (Fortune)

Russian lawmakers seek to weaken encryption. Irina Yarovaya, head of Russia’s parliamentary security committee, has proposed requiring that Internet service providers store the content of people’s communications for up to six months. Another conservative Russian senator, Yelena Mizulina, has proposed that online communications providers like WhatsApp and Telegram offer a way for the state to decrypt people’s messages. (Fortune)

Accenture doubles down on cyber. The consultancy acquired the 30-person Israeli cybersecurity firm Maglan for an undisclosed sum this week. Accenture will open a research and development center in Tel Aviv, where the acquired company was based. (Fortune)

CIA director on Twitter and Datamir. Central Intelligence Agency director John Brennan criticized the micro-blogging service and the data mining startup for cutting the agency off from he described vital counter-terrorism information in the form of tweets. He said he was “disappointed” in the startup for not cooperating with law enforcement and intelligence apparatus. (Fortune)

By the way, will the real Satoshi Nakamoto please stand up?

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Fortune contributor Tom Krazit explains what accounts for the greatest cyber risk to any organization: its people.

If your company is like most, you’re spending an awful lot of your information technology budget on security: security products to protect your organization, security consultants to help you understand where your weaknesses lie, and lawyers to sort out the inevitable mess when something goes wrong. That approach can work, but it fails to consider the weakest link in your security fence: your employees.

We’ve come a long way since the days of the Blaster and Zapper worms in the early 2000s, malware that infected computer systems and caused pure chaos in corporate networks for people not yet hardened enough to question the links and attachments that arrived in their inboxes. Yet as we’ve put together the agenda for Structure Security, a conference focused on information security to be held on Sept. 27 and 28 in San Francisco, it’s a topic that has come up again and again: How the best-laid plans designed by security experts can still be derailed by users with sloppy passwords or a tendency to leave smartphones or laptops in cabs. Read the rest on


Everyone’s Waiting for the Next Cybersecurity IPO by Robert Hackett

Trump to Rip Hillary Clinton as Partially Responsible for Rise of ISIS by Associated Press

Judge Throws Out Lawsuit Over Apple ‘Error 53’ iPhone Flaw by Jeff John Roberts

BitTorrent Wants to Get Into the News Business by Mathew Ingram

Neustar Is Splitting Into 2 Publicly Traded Companies by Reuters

Paul Ryan: Orlando Transcript Should Not Have Been Redacted by Michal Addady

Axel Springer Beats Adblock Plus In Court Over Acceptable Ads Fees by David Meyer

As Global Currencies Plunge Over Brexit, Investors Turn to Bitcoin by Don Reisinger

There May Have Been a Breakthrough On the U.S.-EU Privacy Shield Deal by David Meyer

Jack Ma Says Alibaba Has ‘Zero Tolerance’ for Counterfeit Goods by Laura Lorenzetti

Did North Korea Have Hackers Steal Millions From Global Banks? by Robert Hackett

Apple’s iOS 10 Code Is Unencrypted, But Probably More Secure by Don Reisinger

As Big Banks Harden Security, Hackers Prey on Smaller Firms by Jeff John Roberts

More Banks Are Trying Out Ripple’s Blockchain For Fund Transfers by David Meyer


Tape, or be taped. Facebook CEO Mark Zuckerberg covers the camera of his laptop, a recent photo taken at the social network’s headquarters revealed. Cybersecurity experts warn that it is relatively simple for hackers to commandeer the computer component. (Fortune)