The Morning Download: Bitcoin Hack Underscores Persistent Challenge of Securing Digital Currency

Good morning. Bitfinex, the Hong Kong-based exchange where bitcoin is traded, said it was hacked, sending the price of the digital currency lower, the WSJ reports. The possible theft of $65 million in bitcoin follows the $60 million theft in June of rival digital currency ethereum, which together constitute something of a digital currency crime wave. “Securing the bitcoin trading platform has proved elusive,” the WSJ notes.

There’s plenty of incentive to close the security problems, given that blockchain, the underlying technology, can make markets more efficient by removing the middleman. (See our CIO Explainer: What Is Blockchain?) International Business Machines Corp. said it is using blockchain to resolve customer disputes, as CIO Journal reported.

Perhaps it’s unreasonable to expect digital technology to eliminate crime as we know it. But there’s something uniquely disarming about the risk of theft in cyberspace, where vulnerabilities can appear to be more systemic in nature.

Samsung launches Galaxy Note 7 with emphasis on software, services. The focus on software and services is particularly important in the enterprise market, where Samsung Electronics Co. is deploying a new strategy in an effort to grow, Kevin Gilroy, executive vice president and enterprise chief of Samsung Electronics America., tells CIO Journal. “Part of our strategy is about selling business solutions and outcomes. The devices get dragged along by the solutions. That is the fundamental shift,” he said. Mr. Gilroy is a veteran of H-P and SAP SE who was hired last year to reorient Samsung enterprise efforts in the U.S.

Dow Chemical names Melanie Kalmar CIO. Dow Chemical Co. named Melanie Kalmar chief information officer. Ms. Kalmar, a 29-year veteran at the company, succeeds Paula Tolliver, who left to take the CIO position at Intel Corp. Ms. Kalmar, most recently global director of Dow’s Information Systems, has helped drive advanced global reporting and e-commerce capabilities, and has shepherded various merger and acquisition IT projects, among them a large SAP implementation, the company said Monday. She will report to Howard Ungerleider, Dow’s vice chairman and chief financial officer.

TECHNOLOGY NEWS


Samsung Galaxy Note 7
Nathan Olivarez-Giles/The Wall Street Journal

First look: Samsung Galaxy Note 7. The WSJ’s Geoffrey Fowler says the iris reader is the device’s most novel addition is an iris reader, which lets users unlock the phone—and the contents of a secret folder with their eyes. A new infrared camera on the front reads iris patterns when it is held up to the user’s face.

Hackers accessed Telegram messaging accounts in Iran. The encryption found in Telegram has made the Berlin-based instant messaging service a favorite among political activists and ISIS supporters alike. But now Reuters reports that hackers linked to Iran’s government have managed to crack more than a dozen accounts, identifying some 15 million Iranian users. Experts tell Reuters that the attacks, which took place this year, may have jeopardized the activities of of activists, journalists and other people in sensitive positions. Telegram, in a statement, said only public data was accessed.

Cray’s stock plunges. Supercomputer maker Cray Inc.’s plans for the year on Tuesday went up in smoke—literally, to a large extent—as smoke damage at a manufacturing facility helped cause the company to sharply cut back its revenue forecasts, the Journal’s Don Clark reports. Cray will have to replace all of the chips inside five completed supercomputers that were undergoing tests in its Chippewa Falls, Wis. facility, said Peter Ungaro, Cray’s chief executive. The Seattle-based company’s stock plunged 20% in after-hours trading.

Washington regulator looking into uses for blockchain. More regulators are starting to look into how blockchain could be used to better oversee the financial system and protect consumers, the WSJ’s Rachel Witkowski reports. The commissioner of the District of Columbia Department of Insurance, Securities and Banking, said Tuesday that his office is looking into how regulators could use blockchain to better track and secure consumer data and complaints filed to regulators, as well as streamline exams of companies and address problems in cybersecurity. Last week IBM Corp. said its finance unit would soon use blockchain to free up capital tied in customer disputes.

China, not Silicon Valley, is cutting edge in mobile tech. Some of the hottest mobile technologies, including payments and  hailing cabs via messenger apps, first became popular in China, a region increasingly setting the pace in mobile tech and adoption, the New York Times reports. In many ways, the new mobile services address current gaps in the infrastrucutre, such as the lack of banking for the middle class. Meanwhile, the company’s mobile startups are giving the Apple Inc. iPhone a run for its money.

FBI kept mum on suspected Russian role in DNC hack: sources. Sources tell Reuters that the Federal Bureau of Investigation held back suspicions that Russians were behind the hack at the Democratic National Committee, preventing employees there from taking additional steps to stem any damage. The FBI was called in last fall, but as late as June, hackers had access both to DNC systems and the Democratic Congressional Campaign Committee network, Reuters reports. A U.S. official with ties to the investigation tells Reuters that the FBI withheld information to “protect classified intelligence operations.”

EVERYTHING ELSE YOU NEED TO KNOW

America’s biggest companies logged a fourth straight quarter of shrinking profits and tepid sales, as weakness from energy companies and lower business investment more than offset U.S. consumer strength. (WSJ)

Stocks struggled for momentum amid growing skepticism about efforts to boost growth and as oil prices hovered around three-month lows. (WSJ)

Rio 2016 ticket sales are lagging behind those of recent Olympics and demand for hotels and flights is showing some softness too, as the city grapples with recession and a Zika epidemic before the opening ceremonies. (WSJ)

An improving labor market and fair-pay laws are prompting companies to rethink the way they set salaries. (WSJ)

Tom Loftus contributed to this article. The Morning Download comes from the editors of CIO Journal and cues up the most important news in business technology every weekday morning. Send us your tips, compliments and complaints. You can get The Morning Download emailed to you each weekday morning by clicking http://on.wsj.com/TheMorningDownloadSignup.

mm

TheBitcoinNews.com – leading Bitcoin News source since 2012

Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. The information does not constitute investment advice or an offer to invest.