US Prosecutors Unseal Cyber Espionage Charges Against Chinese Nationals

On November 27, 2017, US prosecutors indicted three Chinese nationals for allegedly committing identity theft, computer fraud, and abuse, and stealing trade secrets from multinational companies Moody’s Analytics, Siemens and Trimble from 2011 to 2017. These individuals were identified by US officials as Wu Yingzhou, Dong Hao, and Xia Lei, employees of Guangzhou Bo Yu Information Technology Company Limited, or Boyusec.

Boyusec is reportedly a Chinese cybersecurity firm based in Guangzhou, China. In November 2013, Boyusec was registered with the Guangzhou Administration for Industry and Commerce.

Lei is listed as an employee of Boyusec, but both Wu and Dong are listed as founding members and equity shareholders of the company. Furthermore, Dong was also Boyusec’s Executive Director and Manager.

According to the indictment, Wu, Dong and Xia conspired to launch “targeted cyber attacks against US and foreign businesses.” None of these businesses hired Boyusec, nor gave the company permission to access their computer networks.

Wu, Dong, and Xia have been charged a total of eight counts: one count each for conspiring to commit computer fraud and abuse, conspiring to commit trade secret theft and wire fraud, as well as four counts of aggravated identity theft.

These charges were announced by Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Soo C. Song for the Western District of Pennsylvania and Special Agent in Charge Robert Johnson of the FBI’s Pittsburgh Division.

“Once again, the Justice Department and the FBI have demonstrated that hackers around the world who are seeking to steal our companies’ most sensitive and valuable information can and will be exposed and held accountable. The Justice Department is committed to pursuing the arrest and prosecution of these hackers, no matter how long it takes, and we have a long memory,” said Acting Assistant Attorney General Boente.

Yingzhuo, Hao, and Lei allegedly used phishing scams and malware to steal intellectual property and sensitive information from Moody’s Analytics, Siemens AG, and Trimble. Moody’s Analytics, a unit of Moody’s Corporation in New York, furnishes financial analysis and risk management services, while Siemens is a large German technology company. Trimble, which operates from Sunnyvale, California, develops and manufactures GPS systems. The three hackers allegedly read the emails of one of Moody’s Analytics top economists from 2013 to 2014.

The emails from Moody’s Analytics had detailed confidential and proprietary economic information. In 2014, Dong Hao reportedly gained access to the computer networks of Siemens AG. Wu, Dong, and Xia then took around 407 gigabytes of the company’s commercial data concerning their transportation, technology and energy initiatives. And in 2015 and 2016, the alleged co-conspirators accessed Trimble’s systems networks and stole more than 275 megabytes of data, which included trade secrets of the company, as Trimble made advances in global navigation satellite systems, according to the indictment.

Acting U.S. Attorney Song explained how the cyber attacks were carried out. Song gave the details of how the alleged cyber hackers penetrated networks of the different businesses. “Defendants Wu, Dong, and Xia launched coordinated and targeted cyber intrusions against businesses operating in the United States, including here in the Western District of Pennsylvania, in order to steal confidential business information. These conspirators masked their criminal conspiracy by exploiting unwitting computers, called ‘hop points,’ conducting ‘spearphish’ email campaigns to gain unauthorized access to corporate computers, and deploying malicious code to infiltrate the victim computer networks.”

Warrants of arrest have been issued against Yingzhuo, Hao, and Lei, to the effect that the three men cannot travel in countries with whom the US has extradition treaties.

Special Agent in Charge Johnson admitted that cyber attacks are a growing problem. He also reiterated the need for agencies in different countries to work together to address these attacks.

“In order to effectively address the cyber threat, a threat that respects no boundaries and continues to grow in both its scope and complexity, law enforcement must come together and transcend borders to target criminal actors no matter where they are in the world,” said Special Agent in Charge Johnson.

For more details on the cyber attacks, please see:

https://www.justice.gov/opa/pr/us-charges-three-chinese-hackers-who-work-internet-security-firm-hacking-three-corporations

https://www.justice.gov/opa/press-release/file/1013866/download.

Snapchat Parent Snap Files IPO Prospectus with SEC

Snapchat is looking to raise up to $3 billion through the offering of Class A common stock shares, according to the Form S filed with the U.S. Securities and Exchange Commission on February 2. The company’s shares will be listed on the New York Stock Exchange under the symbol “SNAP.” Snap, the parent company of the fast-growing social network Snapchat, filed its request in a  public document of its initial public offering (IPO).

Snap is a camera company. Its flagship product is Snapchat, an image messaging and multimedia mobile application that allows people to communicate through short videos and images. Each of those short videos or images is called a Snap. On average, 158 million people use Snapchat daily, and more than 2.5 billion Snaps are created every day.

Snap generates substantially all of its revenue from advertising. “We help our advertising partners generate a return on their investment by creating engaging advertising products that reach our large and desirable audience,” according to the filing.

For the year ended December 31, 2016, the company reported revenue of $404.5 million, an increase from $58.7 million for the year ended December 31, 2015. The global average revenue per user was $1.05, compared to $0.31 for in 2015. The average revenue per user in North America was $2.15, versus $0.65 for the same period in 2015. The company posted a loss of $514.6 million, compared to a loss of $372.9 million for the year ended December 31, 2015. Adjusted EBITDA was a loss of $459.4 million, versus a loss of $292.9 million for the year ended December 31, 2015.

Snap said that it views daily active users (DAU) as a critical measure of its user engagement. The company had 158 million DAU on average in the quarter ended December 31, 2016.

The company said that mobile advertising is the fastest growing segment. Worldwide advertising spend is expected to grow from $652 billion last year to $767 billion in 2020. The mobile advertising is projected to grow nearly 3x from $66 billion in 2016 to $196 billion in 2020.

“We believe that one of the major factors driving this growth is the shift of people’s attention from their televisions to their mobile phones. This trend is particularly pronounced among the younger demographic, where our Daily Active Users tend to be concentrated,” according to the company.

People between the ages of 18 and 24 spent 35% less time watching traditional television in an average month during the second quarter of 2016 compared to the second quarter of 2010, according to research firm Nielsen.

Google’s Waymo Cars Driven 2.5m Autonomous Miles and Accelerating

Waymo, formerly the Google self-driving car project, has completed more than 2.5 million miles of autonomous driving on public roads in the past few years, Dmitri Dolgov, head of Waymo’s self-driving technology, said in a blog post.

He said that Waymo is accelerating the pace of testing on public roads and in simulation as part of its efforts to bring fully self-driving cars to more people. Citing this year’s California disengagement report, Dolgov added that the company has significantly improved its fully self-driving technology. The report shows that Waymo’s rate of safety-related disengages has dropped from 0.8 disengages per thousand miles in 2015 to 0.2 per thousand miles in 2016.

“Disengages are a natural part of the testing process and occur when a driver takes manual control of a vehicle while it is in autonomous mode. Testing, including disengages, allows our engineers to safely add to our software’s driving skills, expand hardware capabilities, and identify areas of improvement,” Dolgov said.

He noted that disengages are helping Waymo to further improve its technology.

“During testing our objective is not to minimize disengagements; rather, it is to gather, while operating safely, as much data as possible to enable us to improve our self-driving system. Therefore, we set disengagement thresholds conservatively, and each is carefully recorded. We have an evaluation process in which we identify disengagements that may have safety significance,” according to Waymo.

The report shows that Waymo operated its self-driving cars in autonomous mode for more than 2.3 million miles as of November 2016. Of those, 635,868 miles occurred on public roads in California, with the vast majority on surface streets in the typical suburban city environment of Mountain View, and neighboring communities. Though Waymo increased its driving by 50% in California, its total number of reportable disengages fell from 341 in 2015 to 124.

Further, Dolgov said that despite cars getting smarter and more advanced, road fatalities in the United States are on the rise. And human error is involved in 94% of all crashes. That is a reason for Waymo to work “harder than ever to bring self-driving cars that don’t get tired or distracted, to our roads.”

He noted that the drop in safety-related disengages shows the significant work Waymo has been doing to make its software and hardware more capable and mature.

“And because we’re creating a self-driving car that can take you from door to door, almost all our time has been spent on complex urban or suburban streets. This has given us valuable experience sharing the road safely with pedestrians and cyclists, and practicing advanced maneuvers such as making unprotected left turns and traversing multi-lane intersections,” Dolgov said.

Dolgov said that Waymo will continue to work harder to make its cars safer. With a hundred tragic road deaths every single day, Waymo is “motivated to work with governments and policymakers to deploy our technology safely and quickly.” He added that Waymo is very optimistic about bringing fully self-driving cars on the public roads.

Batteries: Longer Lasting with Increased Safety

Woburn, Massachusetts-based Ionic Materials claimed that it created the world’s first solid polymer electrolyte that could help make safe, longer lasting, and cost effective batteries. They say that “Significant improvements in battery safety, performance and cost are achievable with ionic conductivities that exceed those of traditional liquid systems over a wide range of temperatures.”

Conventional batteries use liquid electrolytes that are flammable, toxic and expensive. And those liquid electrolytes are main responsible for almost all of battery safety incidents.

Ionic Materials said that it built a solid state battery technology that eliminates the complicated and expensive process of making batteries with liquid electrolytes. Based on low-cost polymer processing techniques, the company’s technology eliminates toxic and flammable liquid electrolytes to make it possible to develop a true safe solid battery.

The company was able to create polymer electrolyte works at room temperature, resulting in improved battery safety and higher performance. Its polymer electrolyte is designed to enable next-generation rechargeable battery performance.

To allow a solid-state battery to function at room temperature and offer safe battery performance across a wide temperature range, the company built solid-state pouch cells with composite LCO and NCM cathodes. It replaced electrolyte and separator with an inherently safe, non-flammable polymer. Moreover, removing the liquid resulted in a more recyclable battery. The company’s batteries can be folded, cut, and damaged, but they do not ignite and continue to perform.

All previous attempts at solid electrolytes were unsuccessful, according to Ionic Materials. Other solid polymers only functioned at impractically high temperatures, while ceramic electrolytes struggled to overcome manufacturability, brittleness, stability, cost and other challenges.

Ionic Materials believes that its polymer electrolyte could replace the liquid electrolytes used in currently available batteries.

For the last four decades, scientists and engineers have tried to develop solid electrolytes for batteries. They have two main issues: polymers suffer from low conductivity at room temperature and lack of high voltage compatibility, while ceramics are brittle and they are associated with complex manufacturing. Also, ceramics have problems in scaling to high volumes.

Through lithium ion batteries are common and are being used in consumer electronics and electronic vehicles, they have a fundamental problem. In lithium ion batteries, liquid electrolytes become unstable when the temperature rises. Also, they are susceptible to shorts caused by dendrites and can catch fire and explode under certain circumstances. The company touts these benefits to consumers by saying “These improvements promise to speed the electrification of transportation and the transition to clean and renewable sources of energy, as well as enable safer and longer lasting consumer electronics devices.”

Meanwhile, Ionic Materials said that it received a $3 million Advanced Research Projects Agency-Energy (ARPA-E) grant from the U.S. Department of Energy. The funding will be used by the company for the development of a polymer electrolyte and lithium/polymer interface to enable lithium cycling and development of solid intercalation cathodes. The program is scheduled to begin in the first half of 2017.

For more information please visit: http://ionicmaterials.com

Apple Sues Chip Maker Qualcomm for $1B

The tech giant Apple (APPL) has filed a lawsuit to the tune of $ 1 billion on Friday, 22 January 2017 against Qualcomm Inc. (QCOM) in the federal district court in the Southern District of California by accusing the latter of overcharging for its wireless chips and engaging in monopolistic tactics.

Apple said in the “Form many years Qualcomm has unfairly insisted on charging royalties for technologies that they have nothing to do with.” According the iPhone maker, the more money the Company innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.

According to Apple, Qualcomm, the chipmaker company and the maker of the iPhone’s baseband processor, is leveraging its monopoly position in baseband chips and overcharging for the chips and refusing to pay some $ 1 billion in promised rebate for chip purchases.

Apple said in the lawsuit “We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.”

The Apple’s lawsuit followed the US Federal Trade Commission’s lawsuit against Qualcomm filed on 17 January 2017. FTC filed the lawsuit against Qualcomm saying that the San Diego-based company used its dominant position as a supplier of certain phone chips to impose “onerous” supply and licensing terms on cell phone manufacturers.

Patrick Moorhead, president of market-research firm Moor Insights & Strategy, said the legal dispute with Apple will help determine ‘what is fair pricing for patents that Qualcomm invested heavily to develop’.

The iPhone has been hugely profitable for Apple and accounts for three-fourth of Apple’s gross profit. The lawsuit says that by making its chip supply contingent on paying patent licenses, Qualcomm managed to secure royalty terms which are not otherwise acceptable to the manufacturers.

For instance, Apple charges about $549 for an iPhone 6s with a 4.7-inch display and $649 for a iPhone 6s Plus with a 5.5-inch display. Even if the higher price is related to the larger display, and not Qualcomm’s chip, Qualcomm collects the same royalty percentage over the total selling price of the iPhone. Qualcomm also require Apple to exclusively use it chips in iPhones from at least 2011 to 2016. Apple also claims that Qualcomm’s practices deterred Apple from switching to chips made by competitors like Intel Corp.

In a counter statement, Qualcomm General Counsel Don Rosenberg called Apple’s claims “baseless” and has put blame on Apple for “actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information.”