While the Bitcoin system is gaining increased attention in the media, it is essential to debate the legality of the system as per Indian laws.
It is reported that there would be a global conference in Bangalore on December 14th and 15th in which Bitcoin is being promoted in India.
Naavi.org would like to invite comments on the legality of the system as per ITA 2008.
Watch this site for more details in due course.
Naavi
An article in Forbes raises an interesting aspect on how China may be preparing for a new Cyber War front based on controlling the virtual currency.
Readers of Naavi.org are familiar with the discussions on “Linden” the virtual currency used on secondlife.com and how there was a dispute about conversion of the Lindens into US dollars by a person alleged to have fraudulently sold virtual land in secondlife.com. This happnned several years ago but was an indication of how disputes may arise if Virtual world starts interfering with the physical world in the currency domain.
Now every cyber fraudster has to still collect physical currency through a Bank to enjoy the fruits of his fraud. But if Virtual currencies gain wide acceptance then fraudsters can easily encash their fraud proceeds through the virtual currency by passing the regulatory system of the physical world. This will have very serious adverse consequences on the society.
Now an indication of what is likely to happen has been indicated by the increasing popularity of “Bitcoin”, a peer to peer digital currency that functions without he inter mediation of a central authority. The system is a currency version of Bit Torrent.
Bitcoin is termed as a “Cryptocurrency” since it uses crryptography to control transactions and prevent duplication. The system works through operators known as “Miners” who process the generation of coins. Every individual transaction is permanently recorded in a public ledger known as the block chain.
Users keep “Wallets” in which bitcoins are stored. Payment gateways assist in transfering payments from one bitcoin wallet to another.
The Bitcoin system originally introduced in 2008 as a concept paper became operational in 2009. In 2011 it is reported that Bitcoin exchange value rose from $0.30 to $32 before falling back to $2.
This year, China appears to be showing increased attention on the system and the China based Bitcoin exchange BTC China is said to have overtaken the Japan based Mt Gox and Europe based Bitstamp to become the largest Bitcoin trading exchage.on 19th November 2013, it is reported that one Bitcoin was traded at US $1100. The total Bitcoin holding is said to be roughly 12 million. The marketcap of Bitcoin is therefore expected to be more than US $7.2billion.
The future threat of Bitcoins is that it is likely to be used in replacement of the Swiss Banks for black money holding, money laundering and financing of criminal activities.
From the Forbes article it appears that China is promoting the currency with the intention of posing a challenge to US dollars as a globally accepted currency as well as to overcome international sanctions.
The emerging threats of Bitcoins appear to be many and unless we in India start thinking on how we address the threat, the country may face a new threat from the terrorists who may start using this currency for financing anti India activities.
We therefore request RBI and SEBI to start thinking on how to tackle this threat of peer to peer virtual currency.
Naavi
It has been reported that LG Smart TV is programmed to collect the viewing habits of the users and send it back to the servers of the Company so that the data can be used to configure customized ads for display. This functionality of the TV has been revealed by certain observers in UK.
We are used to websites snooping on the users and collecting such information which is considered as a “Privacy Invasion”. Now it is necessary for LG to declare a privacy policy so that collection of information about the viewers is not considered an offence under the UK data protection Act. Further, since the company may end up processing private data, it may be necessary for the TV company to register themselves as a “Data Processor” and adhere to all the compliance requirements under the data protection act.
In the event similar data collection is practiced in India by the cable operators or the TV companies either through the Set Top box or the TV itself, the issue would come within the provisions of ITA 2008 and render the companies liable for civil and criminal liabilities for non compliance.
I hope TRAI takes note of this development.
Naavi
Yesterday’s physical attack on an ATM customer at Bangalore should be an eye opener for all security professionals who are interested in security as well as Bank professionals who are promoting for increased use of ATM as a customer service channel. It was unfortunate that the victim of the physical attack within the premises of Corporation Bank ATM was a manager of the Bank itself. It was therefore an attack within the Bank’s premises of a Bank staff for which the Bank should take all the responsibility.
The fact that the lady remained bleeding inside the ATM for over 3 hours since the blood flowing out of the closed doors caught the attention of some school children speaks very poorly of the security situation.
It is time now for Banks to immediately close all un-guarded ATMs failing which the Police should close down such ATMs.
In the meantime a comprehensive security system has to be built for the continued use of ATMs irrespective of the costs that may be involved in the process. Such security system should include
a) Real time electronic surveillance
b) Automatic Alert generation on feed failure
c)Accountability for surveillance with a designated Bank official
d) Stronger authentication system both for entry into the premises as well as ATM usage.
I look forward to Mr Raghuram Rajan, the new Governor of RBI to start focusing on his Bank Supervision responsibilities along with inflationary control.
I also warn some of the new Banking licensees such as the Shriram Group who have charted their plans on the increased use of technology to take note of the risks associated with unmanned banking and build in necessary security measures as part of their plans.
Naavi
Of the many viruses that haunt us, the virus that encrypts our own files so that we have to pay a ransom to recover them is one of the most annoying. While this could be considered as a malware like any other and enter our system through the normal channels such as an infected attachment or an infected download etc., it is necessary to ensure that the usual anti virus software is supplemented with specialized tools if any protect ourselves.
Some information on such anti cryptolocker tools are available here.
Sophos Cryptolocker removal tool
Naavi
So far we have been debating the cyber crime risks associated with ATMs and the need for Banks to assume responsibility. However today an incident in Bangalore has changed the perspective completely and throwing up basic questions on whether at all use of ATMs is safe for public?
For those who may not know, today morning around 7.30 am a lady who entered a Corporation Bank ATM in Bangalore to draw cash was followed by a person who closed the shutters, and attacked the lady with a sharp weapon and a pistol injuring her. He then non nonchalantly walked away. The lady is said to be out of danger but the incident has shaken up the ATM users and made ATM use completely unsafe.
Now it is necessary for customers to go to ATMs with their own arm guards since Banks cannot afford to appoint their own guards.
I demand the Governor of RBI to explain how he views this incident and what remedies he suggests. The responsibility for safeguarding Bank customers lies at the RBI Governor’s doors since RBI has been encouraging the policy of ATM use and discouraging customers from visiting Banks for cash withdrawals by charging the customers extra fees if they wish to visit the Banks.
Customers should stop using ATMs except within Branch premises to avoid such incidents.
I also suggest Bangalore police to take steps to close down any ATM which is not provided with a 24 hour guard by the Bank.
Naavi
