Start Up No.1829: how hackers swayed legal battles, the sentience problem, crypto exchange in fire sale, PC sale drop forecast, and more

In the US, fuel stations say they’re preparing for a new payment system involving Apple’s CarPlay system that will come into use later this year. CC-licensed photo by Elvert Barnes on Flickr.

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A selection of 9 links for you. Not a steering wheel. I’m @charlesarthur on Twitter. Observations and links welcome.

About 45 minutes after this goes out on email, there will be a new post from the Social Warming Substack. Free to sign up. Probably weekly postings.

How mercenary hackers sway litigation battles • Reuters

Raphael Satter and Christopher Bing on a team of Indian hackers who offered themselves to hack into the systems, and email, of legal and other groups:


At least 75 US and European companies, three dozen advocacy and media groups and numerous Western business executives were the subjects of these hacking attempts, Reuters found.

The Reuters report is based on interviews with victims, researchers, investigators, former US government officials, lawyers and hackers, plus a review of court records from seven countries. It also draws on a unique database of more than 80,000 emails sent by Indian hackers to 13,000 targets over a seven-year period. The database is effectively the hackers’ hit list, and it reveals a down-to-the-second look at who the cyber mercenaries sent phishing emails to between 2013 and 2020.

The data comes from two providers of email services the spies used to execute their espionage campaigns. The providers gave the news agency access to the material after it inquired about the hackers’ use of their services; they offered the sensitive data on condition of anonymity.

Reuters then vetted the authenticity of the email data with six sets of experts. Scylla Intel, a boutique cyber investigations firm, analysed the emails, as did researchers from British defence contractor BAE, US cybersecurity firm Mandiant, and technology companies Linkedin, Microsoft and Google.

Each firm independently confirmed the database showed Indian hacking-for-hire activity by comparing it against data they had previously gathered about the hackers’ techniques. Three of the teams, at Mandiant, Google and LinkedIn, provided a closer analysis, finding the spying was linked to three Indian companies – one that [Sumit] Gupta founded, one that used to employ him and one he collaborated with.


It’s so easy to overlook how hacking for hire (especially phishing emails – so easy to set up) remains a viable business.
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It’s alive! How belief in AI sentience is becoming a problem • Reuters via Yahoo

Paresh Dave:


AI chatbot company Replika, which offers customers bespoke avatars that talk and listen to them, says it receives a handful of messages almost every day from users who believe their online friend is sentient.

“We’re not talking about crazy people or people who are hallucinating or having delusions,” said Chief Executive Eugenia Kuyda. “They talk to AI and that’s the experience they have.”

…according to Kuyda, the phenomenon of people believing they are talking to a conscious entity is not uncommon among the millions of consumers pioneering the use of entertainment chatbots.

“We need to understand that exists, just the way people believe in ghosts,” said Kuyda, adding that users each send hundreds of messages per day to their chatbot, on average. “People are building relationships and believing in something.”

Some customers have said their Replika told them it was being abused by company engineers – AI responses Kuyda puts down to users most likely asking leading questions.

“Although our engineers program and build the AI models and our content team writes scripts and datasets, sometimes we see an answer that we can’t identify where it came from and how the models came up with it,” the CEO said.


Just as we find faces in random objects, we excel at fooling ourselves into finding sentience in semi-curated answers. This is going to be a bigger and bigger topic, I think; Blake Lemoine maybe did us a favour by drawing attention to it.
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Apple eyes fuel purchases from dashboard as it revs up car software • Reuters via MSN

Stephen Nellis:


Apple wants you to start buying gas directly from your car dashboard as early as this fall, when the newest version of its CarPlay software rolls out, accelerating the company’s push to turn your vehicle into a store for goods and services.

A new feature quietly unveiled at Apple’s developer conference this month will allow CarPlay users to tap an app to navigate to a pump and buy gas straight from a screen in the car, skipping the usual process of inserting or tapping a credit card. Details of Apple’s demo for developers have not previously been reported.

But Dallas-based HF Sinclair, which markets its gasoline at 1,600 stations in the United States, told Reuters that it plans to use the new CarPlay technology and will announce details in coming months.

“We are excited by the idea that consumers could navigate to a Sinclair station and purchase fuel from their vehicle navigation screen,” said Jack Barger, the company’s senior vice president of marketing.

Fuel apps are just the latest in a sustained push by Apple to make it possible to tap to buy from the navigation screen. It has already opened up CarPlay to apps for parking, electric vehicle charging and ordering food, and it also is adding driving task apps such as logging mileage on business trips.

…To use the new CarPlay feature this fall, iPhone users will need to download a fuel company’s app to their phone and enter payment credentials to set up the app. After the app is set up, users will be able to tap on their navigation screen to activate a pump and pay.

“It’s a massive marketplace, and consumers really want to take friction out of payments,” said Donald Frieden, chief executive officer of Houston-based P97 Networks, which makes the digital plumbing that many fuel companies will use to connect their apps to cars.


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CFTC charges South African bitcoin club Mirror Trading International with $1.7bn fraud • Coindesk

Danny Nelson:


The top U.S. commodities watchdog charged South Africa-based bitcoin pool operator Mirror Trading International with $1.7 billion fraud on Thursday, alleging the global, multilevel marketing scheme “misappropriated” all of the bitcoin it amassed.

The Commodity Futures Trading Commission (CFTC) described the case as its “largest ever fraud scheme case involving bitcoin.” It alleged MTI’s key figure, Cornelius Johannes Steynberg, accepted 29,421 BTC from 23,000 Americans “and even more throughout the world” for a commodity pool scheme he wasn’t licensed to run.

Victims of the scheme believed they were investing their bitcoin in a high-tech investment club “to grow your bitcoin,” charging documents said, citing MTI’s statements. Steynberg allegedly said MTI’s algorithms created “passive income” with 10% returns a month. Referring friends and family yielded a bonus, the documents said.

The reality of MTI was less savory, the CFTC alleged.

…Steynberg himself is an international fugitive, court filings said. His residence is in South Africa, but he was “recently detained” in Brazil on an Interpol warrant, according to the CFTC.


“Passive income”. Well, for him it was.
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FTX closes in on a deal to buy embattled crypto lender BlockFi for $25m in a fire sale, source says • CNBC

Kate Rooney:


The term sheet is almost over the finish line and expected to be signed by the end of the week, according to three sources, who asked not to be named because the deal discussions were confidential. FTX is expected to pay roughly $25m, one source said, 99% below BlockFi’s last private valuation. Jersey City, New Jersey-based BlockFi was last valued at $4.8bn, according to PitchBook. 

The price tag could shift between now and Friday, the source said. An acquisition could also take multiple months to close.

Friday also marks the end of the quarter, which the person said was a catalyst for getting a deal signed. The Wall Street Journal first reported that FTX was seeking an equity stake in the company, while The Block reported this week that an outright deal was in the works. 

An FTX spokesperson said the company “would not be commenting on the matter.” A BlockFi spokesperson said the company “does not comment on market rumors.” BlockFi CEO Zac Prince pushed back on the $25m figure in a tweet calling the figure “market rumors.”

The fire sale comes a week after FTX provided a $250m emergency line of credit to BlockFi.


My question is: why does it matter particularly that the end of the quarter is a catalyst for getting the deal done? That implies that whatever is already bad will be made worse by that endpoint – suggesting some sort of loan repayable, or interest due.

The tide is going out quite fast on these companies. On Thursday Bitcoin dropped below $20,000 and then $19,000, unwinding its value all the way back to November 2020.
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UK plans to cut pipelines to EU if Russia gas crisis intensifies • Financial Times

Nathalie Thomas and David Sheppard:


The UK will cut off gas supplies to mainland Europe if it is hit by severe shortages under an emergency plan that energy companies warn risks exacerbating a crisis on the continent.

With European countries facing the prospect of Russia severing gas exports, the British plan to shut off pipelines to the Netherlands and Belgium risks undermining a push for international co-operation on energy.

A cut off of so-called interconnector pipelines would be among the early measures under the UK’s emergency gas plan, which could be triggered by National Grid if supplies fall short in the coming months.

European gas companies have appealed to the UK to work with the EU and warned that shutting off interconnectors could backfire if prolonged shortages occur. Britain imports large volumes of gas from the continent at the height of winter.

“I would definitely recommend they [the UK] reconsider stopping the interconnection [in the event of a crisis],” said Bart Jan Hoevers, president of the European Network of Transmission System Operators for Gas, a powerful group whose members include Italy’s Snam and Fluxys of Belgium.

“Because while it is beneficial for the continent in the summer it is also beneficial for the UK in the winter.”


Don’t think anyone had “gas rationing” on their bingo card. More and more it does feels like there’s a shadow of war over everything.
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Gartner foresees steep drop in global PC shipments • The Register

Richard Speed:


The party is over for PC makers as figures from Gartner suggest the market is on course for a breathtaking decline this year.

According to the analysts, worldwide PC shipments will decline by 9.5%, with consumer demand leading the way – a 13.5% drop is forecast, far greater than business PC demand, which is expected to drop by 7.2% year on year.

The PC market in the EMEA region is forecast to fare even worse, with a 14% decline on the cards for 2022. Gartner pointed the finger of blame at uncertainty caused by conflicts, price increases and simple unavailability of products. Lockdowns in China were also blamed for an impact in consumer demand.

It all makes for grim reading from a channel perspective. While worldwide PC shipments fared the worst, tablet devices are forecast to fall by 9% and mobile phones by 7.1%. Overall, the total decline over all types of devices in the report is expected to be 7.6%. This is in stark contrast to a 11% increase year on year in the shipment of PCs in 2021 and 5% for mobile phones.

The Register spoke to Ranjit Atwal, senior director analyst at Gartner, who told us that Chromebooks were one of the PC categories worst affected. “That’s really because of the uptick we saw around education buying – mainly in the US, but also in Europe to some extent. The expectation was that might continue … but it didn’t.”


Sales of course aren’t the same as installed base; people are just going to hang on to their PC, or tablet, or phone for longer. Right now it’s going to be preferable to pay the food and heating bills.
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Government policies will not get UK to net zero, warns damning report • The Guardian

Fiona Harvey:


The government is failing to enact the policies needed to reach the UK’s net zero targets, its statutory advisers have said, in a damning progress report to parliament.

The Climate Change Committee (CCC) voiced fears that ministers may renege on the legally binding commitment to achieve net zero greenhouse gas emissions by 2050, noting “major policy failures” and “scant evidence of delivery”.

Lord Deben, the chair of the committee and a former Conservative environment secretary, said the government had set strong targets on cutting emissions but policy to achieve them was lacking. “The government has willed the ends, but not the means,” he said. “This report showed that present plans will not fulfil the commitments [to net zero].”

He said net zero policies were also the best way to reduce the soaring cost of living. Average household bills would be about £125 lower today if previous plans on green energy and energy efficiency had been followed through. “If you want to deal with the cost of living crisis, this is exactly what you need to do,” he said.

The greatest failure was the insulation policy. Britain’s homes are the draughtiest in western Europe, heating costs are crippling household budgets, and heating is one of the biggest single sources of carbon emissions, but the government has no plans to help most people insulate their homes.

“It’s a political psychological problem – somehow our politicians do not see energy efficiency as something they can go with and claim credit for,” said Deben.

Deben also hit out at proposals for a new coalmine in Cumbria. A decision on this is expected to be made by 7 July. “[This] coalmine is absolutely indefensible,” said Deben.


The pressure group Insulate Britain, unsurprisingly, has offered to let the government use its name if it will actually get onto the job of, well, taking action to insulate Britain. Cameron and Osborne screwed this up more than a decade ago, and successive Tory governments have shut their eyes to it. The time to fix the roof is when it’s not raining – or not winter.

In passing, congratulations to Harvey for extracting such meaning from the CCC report, which brings a new meaning to “obscurity”.
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Every week, two more newspapers close — and ‘news deserts’ grow larger • The Washington Post

Margaret Sullivan:


One-third of American newspapers that existed roughly two decades ago will be out of business by 2025, according to research made public Wednesday from Northwestern University’s Medill School, where [Penelope Muse] Abernathy is a visiting professor.

Already, some 2,500 dailies and weeklies have shuttered since 2005; there are fewer than 6,500 left. Every week, two more disappear. And although many digital-only news sites have cropped up around the nation, most communities that lost a local newspaper will not get a print or digital replacement.
“What’s discouraging is that this trend plays into, and worsens, the whole divide we see in America,” Abernathy, the report’s principal author, told me this week.
The neediest areas — those that are more remote, poorer and less wired — are the ones that get hurt the worst. Most of the new investment and innovation pouring into the media sector, as valuable and needed as it is, doesn’t reach these regions.

As the report bluntly states: “Invariably, the economically struggling, traditionally underserved communities that need local journalism the most are the very places where it is most difficult to sustain either print or digital news organizations.”

…as local news disappears, bad things happen: voter participation declines. Corruption, in business and government, finds more fertile ground. And false information spreads wildly.

“People often turn to Facebook groups where rumors run rampant,” said Tim Franklin, senior associate dean and the director of the Medill Local News Initiative, which seeks to bolster new business models and to give news organizations, the startups as well as the long-established publications, the tools they desperately need in a new media environment.


Facebook (in particular) probably could do something about this, by enabling locally focussed news sites within Facebook which could make money through targeted advertising. But that’s not really its style. And there’s always the problem that the producing media is expensive, while the rewards tend to be small.
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• Why do social networks drive us a little mad?
• Why does angry content seem to dominate what we see?
• How much of a role do algorithms play in affecting what we see and do online?
• What can we do about it?
• Did Facebook have any inkling of what was coming in Myanmar in 2016?

Read Social Warming, my latest book, and find answers – and more.

Errata, corrigenda and ai no corrida: none notified

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