Gabriel Wieman on Terrorists using narrowcasting

Terrorists rely on state-of-the-art techniques from the advertising industry to attract suicide bombers. Rather than broadcast, or use one big message to attract a huge audience, the extremists “narrowcast,” targeting small groups with specific messages that exploit their vulnerabilities. The internet – anonymous and decentralized, reaching the alienated who desperately seek some inspiration or goals – is the ideal communication tool for terrorists, explains Gabriel Weimann, communication professor at Haifa University. Websites designed by terrorist groups praise and encourage suicide bombings, assassinations of world leaders and sacrificing children to a cause built around hatred and the end of free thought. To block terrorists’ recruitment drives and reduce the spread of hate messages, investigators must understand the source of anger and insecurity. Like any consumer marketing, the online world of “narrowcasting” gives its audience of vulnerable and discontents the illusion that they are special. – YaleGlobal

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Important piece by Mitch Wagner in Information Week

Mitch Wagner makes some very good points in this piece

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Meta-terror panel in DC

Remarks from the event will be published on the Counter Terrorism Blog soon!

In the meantime the presentation I wasn’t able to show at the event is below:

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Future directions in technology-enabled crime: 2007–09

The Australian Institute of Criminology last year published a rather large risk assessment document looking at very near-future directions of technology enabled crimes which is available on the Australian Government Website. Though the entire document itself makes for a fascinating read, of interest to myself in particular was this section discussing virtual worlds:

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Online gaming and gambling

Online gaming, typically played via local area networks and the internet, is a growing industry. Major online gaming vendors include Microsoft (Xbox) and Sony (Playstation). Broadband connection, technological innovations and a reduction in the price of electronic data storage devices continue to lower entry barriers for new entrants into the gaming industry and contribute to the richness and diversity of gaming content. Games, particular MMOG and MMORPG, are increasingly gaining popularity with the digital generation. MMOG and MMORPG allow players to compete with and against each other on a grand scale in real-time.

Not only do MMORPGs appeal to a broad age range (M age = 26.57, range = 11-68), but the appeal is strong (on average 22 hours of usage per week) across users of all ages (r = -.04) … MMORPGs are not simply a pastime for teenagers, but a valuable research venue and platform where millions of users interact and collaborate … on a daily basis (Yee 2006:309).

The virtual worlds in MMOG and MMORPG, representing the persistent social and material world, provide a synthetic environment in which people communicate with each other using a virtual persona – avatar – and allow strangers who do not necessarily speak the same language to establish relationships (in the virtual worlds). Players are also able to receive education, to purchase virtual properties, acquire virtual accommodation and trade in virtual merchandise, and to inflate their virtual status using physical cash in the virtual worlds. A study by Chen et al. (2004) suggested that, as at March 2003, an exchange rate was estimated to be 10,000 in virtual cash unit to US$1. It was also reported on LindeX, the official Second Life currency exchange (http://secondlife.com/whatis/currency.php), that an exchange rate was estimated to be L$250 (Linden Dollars in Second Life) to US$1 as at January 2007.The availability of a market for virtual currency exchange has attracted the interest of individuals and multi-national corporations. In November 2006, the first self-proclaimed virtual world millionaire, Anshe Chung, announced that she had accumulated virtual assets worth more than US$1 million in physical currency (Hutcheon 2006). Multi-national corporations such as IBM, Toyota, Adidas, Telstra, the Australian Broadcasting Corporation and MTV have established or intending to establish a presence in these virtual worlds. In 2007 Sweden announced establishment of a diplomatic presence in Second Life (AAP 2007b) and in 2006 popular music band Duran Duran announced purchase of a luxury island (Wallace 2006a). On the island, live concerts and media appearances will take place alongside the band’s media, public and live engagements in the physical world.The availability of a market for virtual goods trading (e.g. http://www.itembay.com.tw/) provides criminals with financial incentives to offend. Organised criminal groups and hackers are targeting MMOG and MMORPG sites to steal gamers’ usernames, passwords, credit-card numbers, and virtual game pieces and accessories. Stolen virtual characters are then ‘sold’ to the original owners or to other players (Ortega 2006). Examples include:

• In June 2002, it was reported that virtual currency with an estimated value of S$15,000 was stolen from four compromised players’ accounts in Singapore (IMCYC 2005).
• In 2003, JB Weasel was arrested and charged in the United States District court under the federal Computer Fraud and Abuse Act for allegedly hacking into another player’s GettaLife game account and stealing the player’s virtual assets (BlackHat 2003).
• In September 2006, the database of Second Life was reportedly hacked into and information about 650,000 game users, including addresses, passwords and encrypted credit card details, stolen (Sophos 2006a).
• In November 2006, the United States FBI closed the website http://www.l2extreme.com that hosted the ‘Lineage’ online game using pirated source code. A California man was arrested for criminal copyright infringement and faces up to five years in prison and a US$250,000 fine (FBI 2007a).

In December 2006, 44 suspects were arrested in China for stealing more than 700,000 Yuan (approximately A$112,000) worth of virtual items by selling properties belonging to compromised Tencent QQ users’ accounts (Zhu 2006).The future will see the continued development of malicious code targeting the online gaming community such as:

• ‘CopyBot’-type code that allows gamers to replicate virtual goods without paying the original designers
• ‘Grey goo’-type code designed to self-replicate objects within the virtual world that might eventually cause a denial-of-service-type attack
• ‘Waigua’-type code (popular in Chinese online games) designed to automatically carry out activities on behalf of the players with the aim to increase the levels of their characters.

Risks of money laundering will also increase as MMOG and MMORPG sites emerge as a vehicle transferring value online. For example, money launderers can purchase virtual currency using illicit cash and exchange the virtual currency back to physical cash. Alternatively, colluding avatars (controlled by criminals) can also launder illicit proceeds in the form of gifts or mutually beneficial economic exchanges in the virtual worlds. A 2007 report pointed out that a criminal could purchase virtual properties in the virtual world worth 1000 Linden dollars, but actually pay A$2 million in cash (Palmers 2007). Although online gaming site operators are required to monitor and report any suspicious transactions under the Anti-Money Laundering and Counter–Terrorism Financing Act 2006 (Cth) since they provide the facility to exchange real cash for virtual currency, such privately-conducted transactions are unlikely to be captured by the operators (and authorities). Existing avenues of money laundering, such as online gambling, a multi-billion dollar industry, will continue to be used. Criminals will be able to establish online accounts with offshore casinos using stolen identities and transfer funds anonymously. To avoid detection, small numbers of transactions will be carried out and then requests made for repayment from offshore casinos. Although offshore casinos may not be required to maintain transaction records, payments can be deposited into bank accounts belonging to money mules to obscure the money trail.

Countermeasures

Criminal threats in an environment in which Internet International Funds Transfer Instructions (IIFTIs) and e-currencies exist are likely to increase, as regulators fail to capture many transactions. IIFTIs may also aid money-laundering activities. Possible countermeasures include: Regulating online payment systems and internet payment intermediaries (including offshore banking services and financial entities) through international collaboration and legislative efforts; for example, the recommendations in the Financial Action Task Force report (FATF 2006) and enacting of the Anti–Money Laundering and Counter–Terrorism Financing Act 2006.Regulating virtual currency in online gaming through legislative efforts. For example, South Korea was reportedly considering introducing legislation to ban commercial trading in virtual currencies (Burns 2006). It was also recently reported that the People’s Republic of China is considering regulating the use of virtual money, QQ’s coin, to combat money-laundering activities in China (AP 2007).Technical assistance and open exchange of control solutions among banking services and financial entities and governments to less capable or advanced jurisdictions on detection techniques against money laundering and other crimes.Unified approach to security standards; for example, the Payment Card Industry Data Security Standard (PCI DSS) developed jointly by Visa and MasterCard.

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This government research paper makes a number of very interesting points and just to draw attention to one again:

Alternatively, colluding avatars (controlled by criminals) can also launder illicit proceeds in the form of gifts or mutually beneficial economic exchanges in the virtual worlds. A 2007 report pointed out that a criminal could purchase virtual properties in the virtual world worth 1000 Linden dollars, but actually pay A$2 million in cash (Palmers 2007). Although online gaming site operators are required to monitor and report any suspicious transactions under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) since they provide the facility to exchange real cash for virtual currency, such privately-conducted transactions are unlikely to be captured by the operators (and authorities).

I believe this goes to the heart of the issue regarding virtual worlds operating as vast storehouses of economic value with their virtual currencies. Simply put; they are NOT banks, they are not regulated like banks, they do not have the same safeguards as banks…. and yet they are, in many ways, fully intergrated with our banking system as I’ve alluded to in prevoius posts. Perhaps gaming company’s should be acting on this, after all, it is better to be a self regulating industry which examines the issues before the government forces them too. I’ll repeat again my view of: If it acts like a bank, it feels like a bank, and it operates like a bank….. Then it needs to be treated like one by regulators.Some virtual worlds allow for the storage of value, the transfer of value and the eventual physical extraction of that value into hard cash. It strikes me that most laymen and reasonable individuals would qualify them as banks… why aren’t they regulated like one then?

David Grundy

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