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$145 million funds frozen after death of cryptocurrency exchange admin

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Roughly $145 million worth of cryptocurrency funds are frozen in the cold (offline) wallet of a Canadian cryptocurrency exchange portal after the death of its owner.

QuadrigaCX, the exchange, has filed for legal protection against its creditors in accordance with Canadian law until it regains access to the funds, according to a message posted on its website.

Problems for the exchange started in December 2018, when its CEO, Gerry Cotten, died of Crohn’s disease in Jaipur, India.

Cotten was the only one who had access to the company’s cold wallet. Despite his death, the exchange continued to operate for nearly a month by using the liquidities stored in its hot (online) wallet and fiat currency bank accounts.

Cotten’s death wasn’t even noticed by most of the exchange’s users until two weeks ago when his widow, Jennifer Robertson, announced his passing on Reddit, triggering a mass withdrawal of funds that destabilized the exchange.

“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us,” the company’s board said in a message posted this week on its website.

“Unfortunately, these efforts have not been successful.”

Some of these efforts “to locate and secure” the cold wallet funds included hiring an IT consultant to attempt to decrypt Cotten’s laptop and gain access to the cold wallet password, according to cryptocurrency news portal CCN.

This wallet is at the center of QuadrigaCX’s operation. It stores quite a considerable amount of funds, according to a court document filed this week by Cotten’s widow, obtained by CoinDesk, another cryptocurrency news site. In particular, around 0.5 percent of all Ether coins currently in circulation are now frozen in Cotten cold wallet, according to an Ethereum market analyst.

QuadrigaCX frozen funds

According to the same court filing, besides the $145 million worth of cryptocurrency funds frozen in Cotten’s cold wallet, the company also owes another $53.5 million in fiat currency, which it now cannot pay after using some of its reserves and after Canadian authorities froze other accounts due to irregularities –per an AMBCrypto report.

More and more users are getting angry that they can’t access their QuadrigaCX funds and for valid reasons. Some are even questioning Cotten’s passing, claiming that he actually may have faked his death and is now living off the funds he had stored on the cold wallet.

QuadrigaCX is now asking the court for a stay of proceedings that would preempt any lawsuits that may come from this whole mess. They are also asking the court to appoint international accounting firm Ernst & Young to oversee its operations until everything gets sorted out.

It is highly unlikely that the exchange would ever get access to these funds ever again.

A report from CipherTrace published this week revealed that hackers stole over $1.7 billion worth of cryptocurrency from exchanges in 2018. The QuadrigaCX case may be one of those strange events where users lose money and it’s not because of hackers or a scam.

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Security Tools Help Bring Dev and Security Teams Together

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Software development teams are increasingly focused on identifying and mitigating any issues as quickly and completely as possible. This relates not only to software quality but also software security. Different organizations are at different levels when it comes to having their development teams and security teams working in concert, but the simple fact remains that there are far more developers out there than security engineers.

Those factors are leading organizations to consider security tooling and automation to proactively discover and resolve any software security issues throughout the development process. In the recent report, “GigaOm Radar for Developer Security Tools,” Shea Stewart examines a roundup of security tools aimed at software development teams.

Stewart identified three critical criteria to bear in mind when evaluating developer security tools. These include:

  • Vendors providing tools to improve application security can and should also enhance an organization’s overall security posture.
  • The prevailing “shift-left” mindset doesn’t necessarily mean the responsibility for reducing risk should shift to development, but instead focusing on security earlier in the process and continuing to do so throughout the development process will reduce risk and the need for extensive rework.
  • Security throughout the entire software development lifecycle (SDLC) is critical for any organization focused on reducing risk.

Figure 1. How Cybersecurity Applies Across Each Stage of the Software Development Lifecycle *Note: This report focuses only on the Developer Security Tooling area

Individual vendors have made varying levels of progress and innovation toward enhancing developer security. Following several acquisitions, Red Hat, Palo Alto Networks, and Rapid7 have all added tooling for developer security to their platforms. Stewart sees a couple of the smaller vendors like JFrog and Sonatype as continuing to innovate to remain ahead of the market.

Vendors delving into this category and moving deeper into “DevSecOps” all seem to be taking different approaches to their enhanced security tooling. While they are involving security in every aspect of the development process, some tend to be moving more quickly to match the pace of the SDLC. Others are trying to shore up existing platforms by adding functionality through acquisition. Both infrastructure and software developers are now sharing toolsets and processes, so these development security tools must account for the requirements of both groups.

While none of the 12 vendors evaluated in this report can provide comprehensive security throughout the entire SDLC, they all have their particular strengths and areas of focus. It is therefore incumbent upon the organization to fully and accurately assess its SDLC, involve the development and security teams, and match the unique requirements with the functionality provided by these tools. Even if it involves using more than one at different points throughout the process, focus on striking a balance between stringent security and simplifying the development process.

Read more: Key Criteria for Evaluating Developer Security Tools, and the Gigaom Radar for Developer Security Tool Companies.

The post Security Tools Help Bring Dev and Security Teams Together appeared first on Gigaom.

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Key Criteria for Evaluating User and Entity Behavior Analytics (UEBA)

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Cybersecurity is a multidisciplinary practice that not only grows in complexity annually but evolves nearly as quickly. A survey of the security landscape today would reveal concerns ranging from the classic compromised servers to the relatively new DevSecOps practices aimed at securing the rapid deployment of new code and infrastructure. However, some things remain constant no matter how much change is introduced. While technology evolves and complexity varies, there is almost always a human component in
risks presented to an organization.

User Behavior Analysis (UBA) was designed to analyze the actions of users in an organization and attempt to identify normal and abnormal behaviors. From this analysis, malicious or risky behaviors can be detected. UBA solutions identify events that are not detectable using other methods because, unlike classic security tools (an IDS or SIEM for example), UBA does not simply pattern match or apply rule sets to data to identify security events. Instead, it looks for any and all deviations from baseline user activity.

As technology advanced and evolved, and the scope of what is connected to the network grew, the need to analyze entities other than users emerged. In response, entity analysis has been added to UBA to create UEBA or User and Entity Behavior Analysis. The strategy remains the same, but the scope of analysis has expanded to include entities involving things like daemons, processes, infrastructure, and so on.

How to Read this Report

This GigaOm report is one of a series of documents that helps IT organizations assess competing solutions in the context of well-defined features and criteria. For a fuller understanding consider reviewing the following reports:

Key Criteria report: A detailed market sector analysis that assesses the impact that key product features and criteria have on top-line solution characteristics—such as scalability, performance, and TCO—that drive purchase decisions.

GigaOm Radar report: A forward-looking analysis that plots the relative value and progression of vendor solutions along multiple axes based on strategy and execution. The Radar report includes a breakdown of each vendor’s offering in the sector.

Solution Profile: An in-depth vendor analysis that builds on the framework developed in the Key Criteria and Radar reports to assess a company’s engagement within a technology sector. This analysis includes forward-looking guidance around both strategy and product.

The post Key Criteria for Evaluating User and Entity Behavior Analytics (UEBA) appeared first on Gigaom.

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GigaOm Radar for Developer Security Tools

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As we learned in the associated GigaOm report, “Key Criteria for Evaluating Developer Security Tools,” the most cost-effective method for reducing risk in software development is to identify and fix issues as close to the developer as possible. As the number of software developers continues to vastly outnumber the number of security professionals allocated to any software project, organizations need to invest in security tooling and automation that can help software developers consider and mitigate security risks in a proactive manner.

Add to this situation an appreciation for how the role of the developer has changed vastly over the last few years: Developers aren’t just responsible for software components; they can write infrastructure components, security controls, automations/integrations, and so forth. This has blended the worlds of the traditional software developers and the infrastructure and operations teams responsible for the environments that software components are deployed to. A much wider range of job titles can be incorporated into the developer role now, which requires the same security tooling and process oversight as does traditional software development.

As we consider how to evaluate vendors for developer security tools, we need to take these points into account:

  • All vendors involved in improving application security can contribute to an organization’s overall enhanced security posture.
  • “Shift-left” mindsets do not imply that the work of reducing risk is simply shifted to the developer, but rather that adding a focus on security early in the process will reduce risk and rework as software moves through the delivery pipeline.
  • Security throughout the entire software development lifecycle (SDLC) is key for any organization that is focused on reducing risk.

In this report we have identified a number of vendors that address the specific need to catch and remediate security issues earlier in the software development lifecycle, which we articulate in the report as table stakes, key criteria, and evaluation metrics. While we review 12 vendor solutions here, we ruled out many more, including several offering capabilities focused on runtime protection, which merit review in upcoming GigaOm Key Criteria and Radar Reports.

How to Read this Report

This GigaOm report is one of a series of documents that helps IT organizations assess competing solutions in the context of well-defined features and criteria. For a fuller understanding consider reviewing the following reports:

Key Criteria report: A detailed market sector analysis that assesses the impact that key product features and criteria have on top-line solution characteristics—such as scalability, performance, and TCO—that drive purchase decisions.

GigaOm Radar report: A forward-looking analysis that plots the relative value and progression of vendor solutions along multiple axes based on strategy and execution. The Radar report includes a breakdown of each vendor’s offering in the sector.

Solution Profile: An in-depth vendor analysis that builds on the framework developed in the Key Criteria and Radar reports to assess a company’s engagement within a technology sector. This analysis includes forward-looking guidance around both strategy and product.

The post GigaOm Radar for Developer Security Tools appeared first on Gigaom.

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