Archives for September 2021

SAN SALVADOR, El Salvador (AP) — The top U.S. diplomat in El Salvador said Tuesday she sees “a decline in democracy” the country, where President Nayib Bukele changed his Twitter profile to read “the coolest dictator in the world.”

The U.S. State Department put five El Salvadoran Supreme Court justices on the U.S. Undemocratic and Corrupt Actors list Monday. Those on the list have their U.S. visas revoked.

The U.S. Embassy Chargé d’Affaires Jean Manes told local media the action was taken because the justice voted to allow the president’s re-election “which is clearly not allowed under the Constitution.”

“What are we seeing now? It is a decline in democracy, and that is exactly what is happening,” Manes said.

Bukele said the decision to put the Salvadoran justices on the list “has nothing to do with corruption.” He called it “pure politics and the lowest form of interventionism.”

“We are nobody’s back yard,” Bukele wrote in his Twitter account. Over the weekend he changed his Twitter profile to “dictator,” apparently as an ironic comment on last week’s protests against him in San Salvador. By Tuesday he had changed it again to “the coolest dictator in the world.”

Bukele’s New Ideas party won a congressional majority this year and immediately after taking its seats in the National Assembly in May, it replaced the five members of the Constitutional Chamber of the Supreme Court and the independent attorney general who had balked at several of Bukele’s earlier actions.

Soon after, the Constitutional Chamber tossed aside what had long been interpreted as a constitutional ban on consecutive presidential reelection, setting the stage for Bukele to potentially seek a second term in 2024. Bukele has not so far announced plans to seek reelection, but critics assume he will.

Bukele’s office has not responded to requests for comment on the Twitter profile change, but there were no clear signs the account had been hacked and the populist president is known for his wry style.

Lawyer Eduardo Escobar of Citizen’s Action, a civic group devoted to government accountability, said Bukele’s strange profile description “is part of the president’s strategy,” noting “He is trying to ridicule the feelings of the public or the opposition.”

Last week, thousands of people gathered in El Salvador’s capital for the first mass march against Bukele, who protesters say has concentrated too much power and weakened the independence of the courts.

Bukele dismissed the Sept. 15 demonstration by saying protesters “took to the streets to fight a dictatorship that doesn’t exist.”

The populist president elected in 2019 has maintained high popularity with his vows to stamp out corruption that was rampant among the country’s traditional parties. But some Salvadorans say he is becoming a dictator for real.

Bukele often uses Twitter to write about Bitcoin. The price and potential of the cryptocurrency appears to fascinate Bukele, and he made bitcoin legal tender in El Salvador, the first country to do so.

Some marchers last week protested the controversial decision by Bukele’s government to roll out a digital bitcoin wallet known as the “Chivo” one week ago. The system has been down frequently for maintenance.

The digital wallet appears to have been overloaded by the sheer number of Salvadorans looking to take advantage of the $30 bonus that the government put in each account to incentivize adoption.

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A U.S. government committee that reviews foreign investment in telecom is probing videoconferencing company Zoom’s $14.7 billion deal for cloud call center company Five9.

In an August filing with the Federal Communications Commission, the Justice Department, which chairs the committee, said it would review the deal “to determine whether this application poses a risk to the national security or law enforcement interests of the United States.” The Justice Department “believes that such risk may be raised by the foreign participation (including the foreign relationships and ownership) associated with the application.” The Wall Street Journal first reported the probe.

The Justice Department did not say in its filing what the foreign ties of concern were and spokesperson Wyn Hornbuckle declined to answer questions Tuesday.

Five9 spokesperson Allison Wilson declined to comment. Zoom said in an emailed statement that it anticipates getting the required regulatory approvals and closing the Five9 deal in the first half of 2022. Zoom spokesperson CJ Lin did not respond to further questions.

Zoom is based in San Jose, California, and says more than half of its employees are in the U.S. But it has a “sizable number” of research and development workers in China, which the company has noted has exposed it to government and media scrutiny. Zoom’s CEO, Eric Yuan, was born in China and became a U.S. citizen in 2007.

The company said in a late August regulatory filing that it is cooperating with ongoing investigations by prosecutors in New York and California, who last summer had sent subpoenas that asked about interactions with the Chinese government, among other things.

Zoom last year drew attention for blocking online meetings related to Beijing’s 1989 Tiananmen Square crackdown and temporarily suspending the accounts of three U.S. or Hong Kong-based activists at the request of the Chinese government. The company then said it would no longer “allow requests from the Chinese government to impact anyone outside of mainland China.”

Tensions in recent years have increased between Washington and Beijing, with disputes over trade, technology, cybersecurity and human rights. The U.S. government has taken a tougher stance on Chinese investment, with more scrutiny of deals.

Zoom has said that buying San Ramon, California-based Five9 will accelerate its growth and give it access to more business clients. Zoom Video Communications Inc. went public in early 2019, before the pandemic made the company a household name with the shift to online school and work.

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WASHINGTON (AP) — The Biden administration sought Tuesday to choke the finances of criminal ransomware gangs, announcing sanctions against a Russia-based virtual currency brokerage that officials say helped at least eight ransomware gangs launder virtual currency.

The Treasury Department sanctions are aimed at kneecapping the economic infrastructure of a ransomware threat that has surged over the last year, crippling corporations, schools, hospitals and critical infrastructure, including a major fuel pipeline. Ransomware payments reached more than $400 million in 2020, the costliest year on record.

The goal is to go after the “financial enablers” of ransomware gangs, Deputy Treasury Secretary Wally Adeyemo told reporters. “Today’s action is a signal of our intention to expose and disrupt the illicit infrastructure using these attacks.”

The blacklisted brokerage is SUEX OTC, a so-called “nested exchange” that conducted transactions from accounts on major, legal global cryptocurrency exchanges. Such operations process a disproportionate amount of illicit transactions, Adeyemo said. In the case of SUEX, officials said, more than 40% of its known transactions have been associated with illicit actors. That’s more than $370 million, according to the cryptocurrency-tracking firm Elliptic.

Through its Office of Foreign Assets Control, the Treasury Department has previously sanctioned ransomware developers and distributors — though periodic retirements and rebrandings of ransomware strains have complicated those efforts. Officials say more such designations are possible.

SUEX is among the biggest and most active of a small group of illicit services that handle most money laundering for cybercriminals including scammers and darknet market operators, another crypto transaction-tracking firm, Chainalysis, said in a blog post. Such firms work closely with law enforcement to track criminal money laundering online.

Although legally registered in the Czech Republic, SUEX has no known physical presence there and operates out of branches in Moscow and St. Petersburg, Russia, where users can cash out their virtual currency, said Chainalysis, adding that it also has operations in the Middle East.

Chainalysis said SUEX claims it can convert cryptocurrency holdings into cash and even real estate, cars and yachts.

Most ransomware gangs operate out of reach of Western law enforcement in Russia and allied states. President Joe Biden has repeatedly told Vladimir Putin that he expects the Russian president to crack down on the gangs, but administration officials say they have seen no signs that Moscow is cooperating.

Chainalysis said SUEX was laundering money from the illicit cryptocurrency exchange BTC-e, which U.S. authorities shut down, perhaps on behalf of administrators, associates or former users. BTC-e’s operator, arrested on holiday in Greece, was sentenced to five years in prison by a French court in December.

“SUEX largely communicated with its clients on the Telegram app and accepted new customers on a system of referrals from trusted intermediaries. This was not the kind of business where a random person on the internet could open an account,” another crypto-tracking firm, TRM Labs, said in a blog post. “Transactions were only completed in-person at SUEX’s offices.”

TRM Labs CEO Esteban Castaño said SUEX is what is known as a “parasite exchange.” They are difficult to detect by the legitimate exchanges whose infrastructure they exploit because they open accounts using fraudulent or stolen credentials to meet know-thy-customer requirements and then fly under the radar.

Chainalysis said SUEX deposit addresses hosted at large exchanges have received over $160 million in Bitcoin alone from cybercriminals since the brokerage opened in early 2018, including nearly $13 million from ransomware operators including Ryuk, Conti and Maze. Ethereum and Tether are among other cryptoassets SUEX handled.

The Treasury Department said it is also updating guidance for ransomware victims that it first issued last year. The advisory strongly discourages victims from paying ransomware, reminding them that some transactions are against the law, and urges victims to report attacks to law enforcement.

“The reality is that the thing we know about this ecosystem is the way that we prevent ransomware attacks is by making sure that we get law enforcement engaged as soon as possible,” Adeyemo said.

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Bajak reported from Boston.

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Follow Eric Tucker on Twitter at http://www.twitter.com/etuckerAP

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Facebook’s semi-independent oversight board says it will review the company’s “XCheck,” or cross check, system following an investigation by The Wall Street Journal into the use of this internal system that has exempted high-profile users from some or all of its rules.

The board said Tuesday that it expects to have a briefing with Facebook on the matter and “will be reporting what we hear from this” as part of a report it will publish in October. It may also make other recommendations, although Facebook is not bound to follow these.

The Journal’s report found that many VIP users abuse the system, “posting material including harassment and incitement to violence that would typically lead to sanctions.” For certain elite users, Facebook’s rules don’t seem to apply. Facebook Inc. had told The Journal that the system “was designed for an important reason: to create an additional step so we can accurately enforce policies on content that could require more understanding.” The company added that criticism of it was “fair” and that it was working to fix it.

A representative for Facebook declined to comment further on Tuesday.

The Journal’s report, the board said, has drawn “renewed attention to the seemingly inconsistent way that the company makes decisions, and why greater transparency and independent oversight of Facebook matter so much for users.”

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