U.S. District Court in San Francisco authorized the IRS Wednesday to serve a “John Doe” summons on Coinbase to request the identities of the virtual currency transaction firm's U.S.-based customers who transferred convertible virtual currency between Dec. 31, 2013, and Dec. 31, 2015. The IRS sought Coinbase's records after it found instances of tax evasion involving the firm's customers. Federal authorities aren't claiming the company had any knowledge tax evasion was taking place, the IRS said in its petition. Records sought in the summons include user profiles, user preferences, user security settings and history, user payment methods and other information about users' funding sources. A “John Doe” summons doesn't require the agency to identify a specific person but simply an ascertainable group or class of people, as in cases involving tax shelters. Based on the petition, Judge Jacqueline Scott Corley ruled (in Pacer) the IRS' summons of Coinbase “relates to the investigation of an ascertainable group or class of persons, that there is a reasonable basis for believing that such group or class of persons has failed or may have failed to comply with any provision of any internal revenue laws, and that the information sought to be obtained from the examination of the records or testimony (and the identities of the persons with respect to whose liability the summons is issued) are not readily available from other sources.” Given the rising use of virtual currencies, “some have raised questions about tax compliance,” said DOJ Tax Division head Caroline Ciraolo in a news release. “Tools like the John Doe summons authorized today send the clear message to U.S. taxpayers that whatever form of currency they use -- bitcoin or traditional dollars and cents -- we will work to ensure that they are fully reporting their income and paying their fair share of taxes.” Coinbase said in a statement it's “aware of, and expected, the Court’s ex parte order today. We look forward to opposing the DOJ’s request in court after Coinbase is served with a subpoena. As we previously stated, we remain concerned with our U.S. customers’ legitimate privacy rights in the face of the government’s sweeping request.”

Federal law enforcement agencies began aiding a multinational operation to dismantle the Avalanche cybercrime network, DOJ said Thursday. The Avalanche network has hosted more than two dozen types of “pernicious” malware and several money laundering schemes, Justice said. The enforcement operation resulted in the shutdown of more than 50 Avalanche servers and led to arrests and searches in five countries, DOJ said. The department's Computer Crime and IP Section and the FBI's Pittsburgh division are helping the operation, which also includes Europol, Eurojust and agencies in more than 40 other countries, it said. “The operation involves an unprecedented and ongoing effort to seize, block and sinkhole more than 800,000 malicious domains associated with the Avalanche network,” said Assistant Attorney General Leslie Caldwell and other officials in a news release.

The Internet Archive disclosed a national security letter (NSL) that included a legal error about how the archive that's amassed a vast historical web collection over 20 years could challenge a gag order, said the Electronic Frontier Foundation, which represented the nonprofit, in a Thursday news release. The FBI issues NSLs with accompanying gag orders that prohibit electronic communications providers from even revealing they received such a letter. The NSL letter sent to the archive in August said the organization had the right to make an annual challenge to the gag order, but Congress updated the law last year, permitting more than one request per year, said EFF. The archive told the FBI it didn't have information that the agency sought and also pointed out the error, which prompted the FBI to drop the gag order and allow the NSL to be disclosed, EFF said. As a result, EFF estimated the FBI will inform "potentially thousands of communications providers" that received NSLs over the past 18 months about the mistake. Archive founder Brewster Kahle said the gag orders with the error concealed that the agency was "giving all NSL recipients bad information about their rights." DOJ didn't comment. In 2007, the archive received an NSL, which it successfully challenged and disclosed. EFF has been helping organizations challenge NSLs (see 1611300069 and 1604210046). The archive houses a web collection called the "Wayback Machine" of more than 150 million web pages, 240,000 movies and 500,000 plus audio files, among other records. On Tuesday, Kahle said in a blog post the organization is creating a copy of its digital collections in Canada as a result of Donald Trump's election. "It means keeping our cultural materials safe, private and perpetually accessible. It means preparing for a Web that may face greater restrictions," he wrote.

The Commission on Enhancing National Cybersecurity is to publicly release a full version Friday of its recommendations to the White House on actions the private and public sectors can take over the next decade to improve cyber defenses and raise cyber awareness, the commission said Thursday. CENC officially delivered its recommendations to President Barack Obama Thursday as directed in the White House's February Cybersecurity National Action Plan (see 1602090068). CENC has “distilled all their findings into a series of recommendations to the new administration across six imperatives,” the commission said in a media advisory. “Each imperative addresses a different aspect of cybersecurity.” Obama is expected to release his response to the recommendations Friday at 2:30 p.m. CENC is to publish the recommendations at 3 p.m. Suggestions are expected to include a continued focus on the use of voluntary cybersecurity standards and instituting incentives to encourage private sector cybersecurity improvements. CENC also considered recommending the White House create a special assistant to the president on cybersecurity issues who would have the same rank as the national security adviser. The commission may recommend the White House set up a public-private “consortium” to advise the president on cybersecurity issues. The body also considered seeking creation of a labeling system for electronic devices along the lines of nutrition labels on packaged foods that would indicate how a particular device complies with cybersecurity standards (see 1611220065).

YunOS, a division of Alibaba, joined the ZigBee Alliance at the participant level, the trade organization announced Wednesday. YunOS works with various partners in the information industry and powers smart devices including phones, wearables, internet cars, robots and household appliances. More than 400 companies are in the ZigBee Alliance.

A 32-year-old Syracuse, New York, man, convicted in March for computer hacking and wire fraud related to a widespread network outage in Pennsylvania six years ago, was sentenced to 24 months in prison, said DOJ in a Tuesday news release. District Court Judge Sylvia Rambo in Harrisburg also ordered Dariusz Prugar to pay $26,000 in restitution. DOJ said Prugar was a network administrator for Pa Online, when the ISP was located in Enola, Pennsylvania. He was fired in June 2010, and "days later" Prugar hacked into the company's network, installing programs that resulted in files and directories being erased and crashing the network, said Justice. More than 5,000 residential and 500 business customers were without service for a week, the department said. The company rebuilt the entire network because Prugar installed several back doors to get into the system, DOJ said. In a March release, Justice said the computer fraud charge was related to Prugar's unlawful network intrusion, and the wire fraud charge was related to his attempt to cause financial loss through the use of interstate wires.

U.S. District Court in Los Angeles granted ICANN's motion to dismiss a lawsuit by domain registry Donuts against the organization over the controversial auction of the .web generic top-level domain. The company's Ruby Glen subsidiary sued in July, claiming ICANN intentionally failed to adequately investigate what the company believed ahead of the .web auction to be changes in ownership or control of rival bidder Nu Dot Co (see 1608090036). Nu Dot Co won the .web auction and .com registry Verisign subsequently said it had funded the $135 million purchase with the understanding that control of .web would pass to it (see 1607250051 and 1607270027). ICANN filed its motion to dismiss in late October, saying in part that Donuts was barred from suing the organization due to a covenant placed in all gTLD applications (see 1610270037). Donuts claimed the anti-suit covenant was void under California law. Judge Percy Anderson ruled the covenant was allowed because it wasn't created to exempt ICANN from facing claims of fraud, willful injury or violating the law. “The nature of the relationship between ICANN and Plaintiff, the sophistication of Plaintiff, the stakes involved in the gTLD application process, and the fact that the Application Guidebook ‘is the implementation of [ICANN] Board-approved consensus policy concerning the introduction of new gTLDs’ … militates against a conclusion that the covenant not to sue is procedurally unconscionable,” Anderson said in his ruling (in Pacer). Without the anti-suit covenant, “any frustrated applicant could, through the filing of a lawsuit, derail the entire system developed by ICANN to process applications for gTLDs,” Anderson said. “ICANN and frustrated applicants do not bear this potential harm equally. This alone establishes the reasonableness of the covenant not to sue. As a result, the Court concludes that the covenant not to sue is not substantively unconscionable.” Donuts “disagrees with the Court’s decision that ICANN’s required covenant not to sue, while being unconscionable, was not sufficiently unconscionable to be struck down as a matter of law,” said Executive Vice President Jon Nevett in a statement. “It is unfortunate that the auction process for .WEB was mired in a lack of transparency and anti-competitive behavior. ICANN, in its haste to proceed to auction, performed only a slapdash investigation and deprived the applicants of the right to fairly compete for .WEB in accordance with the very procedures ICANN demanded of applicants. Donuts will continue to utilize the tools at its disposal to address this procedural failure.”

Ransomware attacks will decrease in volume and effectiveness in the second half of 2017, while hardware and firmware will be increasingly targeted by “sophisticated” attackers, Intel Security’s McAfee Labs reported Tuesday. Intel surveyed 31 “thought leaders." IoT malware will open back doors in connected devices that could take years to detect, Intel said. Mobile attacks will combine mobile device locks with credential theft, increasing the vulnerability of personal information stored on consumers’ devices, Intel said. Hackers will attempt “dronejackings” using laptops for criminal and “hacktivist” purposes, Intel said. Hacktivists will also likely play an important role in exposing privacy issues, Intel said. “To change the rules of the game between attackers and defenders, we need to neutralize our adversaries' greatest advantages," said Intel Security Vice President-McAfee Labs Vincent Weafer. “To overcome the designs of our adversaries, we need to go beyond understanding the threat landscape to changing the defender-attacker dynamics in six key areas: information asymmetry, making attacks more expensive, improving visibility, better identifying exploitation of legitimacy, improving protection for decentralized data, and detecting and protecting in agentless environments.”

The Department of Commerce’s Digital Economy Board of Advisors (DEBA), formed about a year ago to encourage growth in the digital economy and promote internet policy (see 1511240034 and 1605160058), scheduled a Dec. 15 public meeting, said a notice in Tuesday's Federal Register. A detailed agenda will be posted before the meeting. DEBA's activities include collecting and analyzing the free flow of information on the internet, including policies that may curb cross-border information flows, providing advice on policy issues like increasing broadband capacity and enhancing cybersecurity and privacy, promoting new technologies and understanding the impact of the internet on job growth and the economy. The 8:30 a.m.-noon meeting will be at 1401 Constitution Ave. NW.

Linking of fake news stories via Facebook and other social media platforms is a problem that “should be left to the platforms themselves -- and interested private third parties -- to address,” and isn't an issue requiring government intervention, said Free State Foundation President Randolph May in a Friday blog post. Facebook CEO Mark Zuckerberg said earlier this month Facebook is executing a strategy to fight phony stories, after criticism that such content may have influenced the presidential election, But he said the percentage of fake content on Facebook remains “relatively small” (see 1611210002). “Right now, in the post-election environment, passions on behalf of some are running high, too high in some quarters,” May said. “And when passions run high, oftentimes there are pleas for action, even when the solutions offered might be worse than the supposed ills.” Elements of Facebook's strategy “look promising, at least in theory,” May said. “As a matter of sound policy, the government should stay out of the business of evaluating the truthfulness of news, except, for example, in rare instances involving public health and safety. And as a matter of law, the First Amendment’s free speech clause demands no less.”