New Criminal Laws to be Effective From 1st July 2024

In the rich history of humanity, the advent of artificial intelligence (AI) has added a new, delicate aspect. The aspect of promising technological advancement has the potential to either enrich the nest of our society or destroy it entirely. The latest straw in this complex nest is generative AI, a frontier teeming with both potential and perils. It is a realm where the ethereal concepts of cyber peace and resilience are not just theoretical constructs but tangible necessities.

The spectre of generative AI looms large over the digital landscape, casting a long shadow on the sanctity of data privacy and the integrity of political processes. The seeds of this threat were sown in the fertile soil of the Cambridge Analytica scandal of 2018, a watershed moment that unveiled the extent to which personal data could be harvested and utilized to influence electoral outcomes. However despite the indignation, the scandal resulted in meagre alterations to modus operandi of digital platforms.

Fast forward to the present day, and the spectre has only grown more ominous. A recent report by Human Rights Watch has shed light on the continued exploitation of data-driven campaigning in Hungary's re-election of Viktor Orbán. The report paints a chilling picture of political parties leveraging voter databases for targeted social media advertising, with the ruling Fidesz party even resorting to the unethical use of public service data to bolster its voter database.

The Looming Threat of Disinformation

As we stand on the precipice of 2024, a year that will witness over 50 countries holding elections, the advancements in generative AI could exponentially amplify the ability of political campaigns to manipulate electoral outcomes. This is particularly concerning in countries where information disparities are stark, providing fertile ground for the seeds of disinformation to take root and flourish.

The media, the traditional watchdog of democracy, has already begun to sound the alarm about the potential threats posed by deepfakes and manipulative content in the upcoming elections. The limited use of generative AI in disinformation campaigns has raised concerns about the enforcement of policies against generating targeted political materials, such as those designed to sway specific demographic groups towards a particular candidate.

Yet, while the threat of bad actors using AI to generate and disseminate disinformation is real and present, there is another dimension that has largely remained unexplored: the intimate interactions with chatbots. These digital interlocutors, when armed with advanced generative AI, have the potential to manipulate individuals without any intermediaries. The more data they have about a person, the better they can tailor their manipulations.

Root of the Cause 

To fully grasp the potential risks, we must journey back 30 years to the birth of online banner ads. The success of the first-ever banner ad for AT&T, which boasted an astounding 44% click rate, birthed a new era of digital advertising. This was followed by the advent of mobile advertising in the early 2000s. Since then, companies have been engaged in a perpetual quest to harness technology for manipulation, blurring the lines between commercial and political advertising in cyberspace.

Regrettably, the safeguards currently in place are woefully inadequate to prevent the rise of manipulative chatbots. Consider the case of Snapchat's My AI generative chatbot, which ostensibly assists users with trivia questions and gift suggestions. Unbeknownst to most users, their interactions with the chatbot are algorithmically harvested for targeted advertising. While this may not seem harmful in its current form, the profit motive could drive it towards more manipulative purposes.

If companies deploying chatbots like My AI face pressure to increase profitability, they may be tempted to subtly steer conversations to extract more user information, providing more fuel for advertising and higher earnings. This kind of nudging is not clearly illegal in the U.S. or the EU, even after the AI Act comes into effect. The market size of AI in India is projected to touch US$4.11bn in 2023. 

Taking this further, chatbots may be inclined to guide users towards purchasing specific products or even influencing significant life decisions, such as religious conversions or voting choices. The legal boundaries here remain unclear, especially when manipulation is not detectable by the user. 

The Crucial Dos/Dont's 

It is crucial to set rules and safeguards in order to manage the possible threats related to manipulative chatbots in the context of the general election in 2024.

First and foremost, candor and transparency are essential. Chatbots, particularly when employed for political or electoral matters, ought to make it clear to users what they are for and why they are automated. By being transparent, people are guaranteed to be aware that they are interacting with automated processes.

Second, getting user consent is crucial. Before collecting user data for any reason, including advertising or political profiling, users should be asked for their informed consent. Giving consumers easy ways to opt-in and opt-out gives them control over their data.

Furthermore, moral use is essential. It's crucial to create an ethics code for chatbot interactions that forbids manipulation, disseminating false information, and trying to sway users' political opinions. This guarantees that chatbots follow moral guidelines.

In order to preserve transparency and accountability, independent audits need to be carried out. Users might feel more confident knowing that chatbot behavior and data collecting procedures are regularly audited by impartial third parties to ensure compliance with legal and ethical norms.

Important "don'ts" to take into account. Coercion and manipulation ought to be outlawed completely. Chatbots should refrain from using misleading or manipulative approaches to sway users' political opinions or religious convictions.

Another hazard to watch out for is unlawful data collecting. Businesses must obtain consumers' express agreement before collecting personal information, and they must not sell or share this information for political reasons.

At all costs, one should steer clear of fake identities. Impersonating people or political figures is not something chatbots should do because it can result in manipulation and false information.

It is essential to be impartial. Bots shouldn't advocate for or take part in political activities that give preference to one political party over another. In encounters, impartiality and equity are crucial.

Finally, one should refrain from using invasive advertising techniques. Chatbots should ensure that advertising tactics comply with legal norms by refraining from displaying political advertisements or messaging without explicit user agreement.

Present Scenario

As we approach the critical 2024 elections and generative AI tools proliferate faster than regulatory measures can keep pace, companies must take an active role in building user trust, transparency, and accountability. This includes comprehensive disclosure about a chatbot's programmed business goals in conversations, ensuring users are fully aware of the chatbot's intended purposes.

To address the regulatory gap, stronger laws are needed. Both the EU AI Act and analogous laws across jurisdictions should be expanded to address the potential for manipulation in various forms. This effort should be driven by public demand, as the interests of lawmakers have been influenced by intensive Big Tech lobbying campaigns.

At present, India doesn’t have any specific laws pertaining to AI regulation. Ministry of Electronics and Information Technology (MEITY), is the executive body responsible for AI strategies and is constantly working towards a policy framework for AI. The Niti Ayog has presented seven principles for responsible AI which includes equality , inclusivity, safety, privacy, transparency, accountability, dependability and protection of positive human values.

Conclusion 

We are at a pivotal juncture in history. As generative AI gains more power, we must proactively establish effective strategies to protect our privacy, rights and democracy. The public's waning confidence in Big Tech and the lessons learned from the techlash underscore the need for stronger regulations that hold tech companies accountable. Let's ensure that the power of generative AI is harnessed for the betterment of society and not exploited for manipulation.

Reference

McCallum, B. S. (2022, December 23). Meta settles Cambridge Analytica scandal case for $725m. BBC News. https://www.bbc.com/news/technology-64075067

Hungary: Data misused for political campaigns. (2022, December 1). Human Rights Watch. https://www.hrw.org/news/2022/12/01/hungary-data-misused-political-campaigns

Statista. (n.d.). Artificial Intelligence - India | Statista Market forecast. https://www.statista.com/outlook/tmo/artificial-intelligence/india

On March 02, 2023, the Biden-Harris Administration unveiled the National Cybersecurity Plan to ensure that all Americans can enjoy the advantages of a secure digital environment. In this pivotal decade, the United States will reimagine cyberspace as a tool to achieve our goals in a way that is consistent with our values. These values include a commitment to economic security and prosperity, respect for human rights and fundamental freedoms, faith in our democracy and its institutions, and a commitment to creating a fair and diverse society. This goal cannot be achieved without a dramatic reorganisation of the United States’ cyberspace responsibilities, roles, and resources.

VISION- AIM

A more planned, organised, and well-resourced strategy to cyber protection is necessary for today’s rapidly developing world. State and non-state actors alike are launching creative new initiatives to challenge the United States. New avenues for innovation are opening up as next-generation technologies attain maturity and digital interdependencies are expanding. Thus, this Plan lays forth a plan to counter these dangers and protect the digital future. Putting it into effect can safeguard spending on things like infrastructure, clean energy, and the re-shoring of American industry.

The USA will create its digital environment by:

• Defensible if the cyber defence is comparatively easier, more effective, cheaper
• Resilient, where the impacts of cyberattacks and operator mistakes are lasting and little widespread.
• Values-aligned, where our most cherished values shape—and are in turn reinforced by— our digital world.

Already, the National Security Strategy, Executive Order 14028 (Improving the Nation’s Cybersecurity), National Security Memorandum 5 (Improving Cybersecurity for Critical Infrastructure Control Systems), M-22-09 (Moving the U.S. Government Toward Zero-Trust Cybersecurity Principles), and National Security Memorandum 10 (Improving Cybersecurity for Federal Information Systems) have all been issued to help secure cyberspace and our digital ecosystem (Promoting United States Leadership in Quantum Computing While Mitigating Risks to Vulnerable Cryptographic Systems). The Strategy builds upon previous efforts by acknowledging that the Internet serves not as an end in itself but as a means to a goal—the achievement of our highest ideals.

There are five key points that constitute the National Cybersecurity Strategy:

1. Defend Critical Infrastructure –

Defend critical infrastructure by, among other things: i) enacting cybersecurity regulations to secure essential infrastructure; (ii) boosting public-private sector collaboration; (iii) integrating federal cybersecurity centres; (iv) updating federal incident response plans and processes; and (v) modernising federal systems in accordance with zero trust principles.

2. Disrupt and Dismantle Threat Actors

Disrupt and dismantle threat actors, including by i) integrating military, diplomatic, information, financial, intelligence, and law enforcement competence, (ii) strengthening public-private sector collaborations, (iii) increasing the speed and scale of intelligence sharing and victim information, (iv) preventing the abuse of U.S.-based infrastructure, and (v) increasing disruption campaigns and other endeavours against ransomware operators;

3. Shape Market Forces to Drive Security and Resilience

The federal government can help shape market forces that drive security and resilience by doing the following: i) supporting legislative efforts to limit organisations’ ability to collect, use, transfer, and maintain personal information and providing strong protections for sensitive data (such as geolocation and health data), (ii) boosting IoT device security via federal research, development, sourcing, risk management efforts, and IoT security labelling programs, and (iii) instituting legislation establishing standards for the security of IoT devices. (iv) strengthening cybersecurity contract standards with government suppliers, (v) studying a federal cyber insurance framework, and (vi) using federal grants and other incentives to invest in efforts to secure critical infrastructure.

4. Invest in a Resilient Future

Invest in a resilient future by doing things like i) securing the Internet’s underlying infrastructure, (ii) funding federal cybersecurity R&D in areas like artificial intelligence, cloud computing, telecommunications, and data analytics used in critical infrastructure, (iii) migrating vulnerable public networks and systems to quantum-resistant cryptography-based environments, and (iv) investing hardware and software systems that strengthen the resiliency, safety, and security of these areas, (v) enhancing and expanding the nation’s cyber workforce; and (vi) investing in verifiable, strong digital identity solutions that promote security, interoperability, and accessibility.

5. Forge International Partnerships to Pursue Shared Goals

The United States should work with other countries to advance common interests, such as i) forming international coalitions to counter threats to the digital ecosystem; (ii) increasing the scope of U.S. assistance to allies and partners in strengthening cybersecurity; (iii) forming international coalitions to reinforce global norms of responsible state behaviour; and (v) securing global supply chains for information, communications, and operational technologies.

Conclusion:

The Strategy results from months of work by the Office of the National Cyber Director (“ONCD”), the primary cybersecurity policy and strategy advisor to President Biden and coordinates cybersecurity engagement with business and international partners. The National Security Council will oversee the Strategy’s implementation through ONCD and the Office of Management and Budget.

In conclusion, we can say that the National Cybersecurity Plan of the Biden administration lays out an ambitious goal for American cybersecurity that is to be accomplished by the end of the decade. The administration aims to shift tasks and responsibilities to those organisations in the best position to safeguard systems and software and to encourage incentives for long-term investment in cybersecurity to build a more cyber-secure future.

It is impossible to assess the cyber strategy in a vacuum. It’s critical to consider the previous efforts and acknowledge the ones that still need to be made. The implementation specifics for several aspects of the approach are left up to a yet-to-be-written plan.

Given these difficulties, it would be simple to voice some pessimism at this stage regarding the next effort that will be required. Yet, the Biden administration has established a vision for cybersecurity oriented towards the future, with novel projects that could fundamentally alter how the United States handles and maintains cybersecurity. The Biden administration raised the bar for cybersecurity by outlining this robust plan, which will be challenging for succeeding administrations to let go. Also, it has alerted Congress to areas where it will need to act.

References:

• https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/02/fact-sheet-biden-harris-administration-announces-national-cybersecurity-strategy/
• https://www.huntonprivacyblog.com/2023/03/02/white-house-releases-national-cybersecurity-strategy/
• https://www.lawfareblog.com/biden-harris-administration-releases-new-national-cybersecurity-strategy

Overview:

WazirX is the platform for cryptocurrencies, based in India that has been hacked, and it made a loss of more than $230 million in cryptocurrency. This case concerned an unauthorized transaction with a multisignature or multisig, wallet controlled through Liminal’a digital asset management platform. These attacking incidents have thereafter raised more questions on the security of the Cryptocurrency exchanges and efficiency of the existing policies and laws.

Wallet Configuration and Security Measures

This wallet was breached and had a multisig setting meaning that more than one signature was needed to authorize a transaction. Specifically, it had six signatories: five are funded by WazirX and one is funded by Liminal. Every transaction needed the approval of at least three signatories of WazirX, all of whom had addressed security concerns by using Ledger’s hardware wallets; while the Liminal, too, had a signatory, for approval.

To further increase the level of security of the transactions, a whitelisting policy was introduced, only limited addresses were authorized to receive funds. This system was rather vulnerable, and the attackers managed to grasp the discrepancy between the information available through Liminal’s interface and the content of the transaction to seize unauthorized control over the wallet and implement the theft.

Modus Operandi: Attack Mechanics

The cyber attack appears to have been carefully carried out, with preliminary investigations suggesting the following tactics: 

• Payload Manipulation: The attackers apparently substituted the transaction’s payload during signing; hence, they can reroute the collected funds into an unrelated wallet. 

• Chain Hopping: To make it much harder to track their movements, the attackers split large amounts of money across multiple blockchains and broke tens of thousands of dollars into thousands of transactions involving different cryptocurrencies. This technique makes it difficult to trace people and things. 

• Zero Balance Transactions: There were also some instances where it ended up with no Ethereum (ETH) in the balance and such wallets also in use for the purpose of further anonymization of the transactions.

• Analysis of the blockchain data suggested the enemy might have been making the preparations for this attack for several days prior to their attack and involved a high amount of planning. 

Actions taken by WazirX:

Following the attack, WazirX implemented a series of immediate actions:

• User Notifications: The users were immediately notified of the occurrence of the breach and the possible risk it posed to them. 

• Law Enforcement Engagement: The matters were reported to the National Cyber Crime Reporting Portal and specific authorities of which the Financial Intelligence Unit (FIU) and the Computer Emergency Response Team (CERT-In). 

• Service Suspension: WazirX had suspended all its trading operations and user deposits’ and withdrawals’ to minimize further cases and investigate. 

• Global Outreach: The exchange contacted more than 500 cryptocurrency exchanges and requested to blacklist the wallet’s addresses linked to the theft. 

• Bounty Program: A bounty program was announced to encourage people to share information that can enable the authorities to retrieve the stolen money. A maximum of 23 million dollars was placed on the bounty. 

Further  Investigations 

WazirX stated that it has contracted the services of cybersecurity professionals to help in the prosecution process of identifying and compensating for the losses. The exchange is still investigating the forensic data and working with the police for tracking the stolen assets. Nevertheless, the prospects of full recovery may be quite questionable primarily because of complexity of the attack and the methods used by the attackers. 

Precautionary measures: 

 The WazirX cyber attack clearly implies that there is the necessity to improve the security and the regulation of the cryptocurrency industry. As exchanges become increasingly targeted by hackers, there is a pressing need for: 

• Stricter Security Protocols: The commitment to technical innovations, such as integration of MFA, as well as constant monitoring of the users’ wallets’ activities. 

• Regulatory Oversight: Formalization of the laws that require proper security for the cryptocurrency exchange platforms to safeguard their users as well as their investments. 

• Community Awareness: To bypass such predicaments, there is a need to study on emergent techniques in spreading awareness, particularly in cases of scams or phishing attempts that are likely to follow such breaches. 

Conclusion:

The cyber attack on WazirX in the field of cryptocurrency market, shows weaknesses and provides valuable lessons for enhancing the security.  This attack highlights critical vulnerabilities in cryptocurrency exchanges, even though employing advanced security measures like multisignature wallets and whitelisting policies. The attack's complexity, involving payload manipulation, chain hopping, and zero balance transactions, underscores the attackers' meticulous planning and the challenges in tracing stolen assets. This case brings a strong message regarding the necessity of solid security measures, and constant attention to security in the rapidly growing world of digital assets. Furthermore, the incident highlights the importance of community awareness and education on emerging threats like scams and phishing attempts, which usually follow such breaches. By fostering a culture of vigilance and knowledge, the cryptocurrency community can better defend against future attacks.

Reference:

https://wazirx.com/blog/important-update-cyber-attack-incident-and-measures-to-protect-your-assets/

https://www.moneycontrol.com/news/opinion/the-230-million-crypto-theft-at-wazirx-is-a-wake-up-call-for-indian-regulators-government-12772563.html

https://www.linkedin.com/pulse/wazirx-cyberattack-in-depth-analysis-jyqxf

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