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Wednesday, June 21, 2023

The Cipher Brief curates open source information from around the world that impacts national security. Here's a look at today's headlines, broken down by region of the world:  

In the Americas

US-China Tensions Reignite as Beijing Says ‘Dictator’ Comments are a Provocation.  President Joe Biden, speaking at a fundraiser in California, said Chinese President Xi Jinping, who he referred to as a dictator, was upset by the Chinese spy balloon incident in February because “he didn’t know it was [in the U.S.].”  Biden said that it is a “great embarrassment for dictators” when they are caught unaware of what has happened.  Biden’s comments refer to the Chinese spy balloon that appears to have been blown off course and flew over the continental U.S.  Beijing was quick to respond with Chinese Foreign Ministry spokeswoman Mao Ning calling Biden’s comments “irresponsible”.  In a press briefing, Mao says Biden’s comments violated China’s “political dignity” and were a public “provocation”.  This comes just days after US Secretary of State Antony Blinken’s trip to Beijing which aimed to de-escalate tensions between the two sides.  Reuters Bloomberg Associated Press

One American, Two Chinese Citizens Found Guilty of Conspiracy in U.S. Federal Trial.  A jury has convicted former New York City Police officer Micheal McMahon and Chinese citizens Zhu Yong and Zheng Congying with conspiracy to commit interstate stalking, among other charges. McMahon and Zhu were also found guilty of acting as unauthorized agents of a foreign government. The case is the first among numerous others, to come to trial in a broad effort by the US Justice Department to rein in what it says is unauthorized activity by Beijing in the United States. The three individuals allegedly worked together to intimidate New Jersey resident Xu Jin, a former Chinese official, who is wanted in China on bribery-related charges.  Sentencing will be set for a later date. Zhu faces up to 25 years while McMahon and Zheng face up to 10 years behind bars.  Attorney’s for all three defendants say they will appeal the charges and that the verdict did not match the evidence that was presented at trial.  McMahon’s attorney says that his client acted in a professional manner and operated “by the book”.  South China Morning Post Reuters

U.S. Reiterates Call for Military Communications With China.  After Secretary of State Antony Blinken’s visit to China, the United States reiterated its calls for military communication channels with China and signaled concern over plans to establish a Chinese military training facility in Cuba. White House officials said that reestablishing military-to-military communications is a top priority since it is essential to reduce friction between the two global powers. Blinken stated that the United States would have “deep concerns” about Chinese military activity in Cuba. He further reiterated that “this is something we’re going to be monitoring very, very closely and we’ve been very clear about that. And we will protect our homeland, we will protect our interests”. These statements come after Blinken’s Beijing visit, the first to China by a U.S. Secretary of State since 2018.  Both China and the U.S. agreed during Blinken’s visit to reduce tension to avoid conflict but there were no major breakthroughs. The lack of military-to-military dialogue has unsettled countries internationally and particularly alarmed China’s neighbors in the region. Deutsche Welle Reuters South China Morning Post

U.S.-Funded Scientist Among Three Chinese Researchers Who Fell Ill at Start of Covid-19 Outbreak.  The Wall Street Journal reports that a U.S.-funded scientist who worked on coronavirus research was one of three Chinese researchers identified by U.S. intelligence who fell ill from an unspecified illness in November 2019, at the start of the Covid-19 pandemic.  The scientist, Ben Hu, has done laboratory research at the Wuhan Institute of Virology (WIV) on how coronaviruses infect humans. His work focused on modifying coronaviruses so they could bind to human cells.  According to published research, Hu and the other two scientists performed SARS-related coronavirus experiments at lower biosafety facilities than is the standard, including in China, for the riskiest research.  In addition, according to documents obtained by the White Coat Waste Project, some of the $1.4 million disbursed to the Wuhan Institute by the U.S. Agency for International Development and the National Institutes of Health, administered by the nonprofit EcoHealth Alliance, went to projects that Hu was an investigator on, including projects on Bat Coronaviruses and how diseases can jump from animals to humans.  The new reporting is likely to be used by proponents of the assessment that the Covid-19 pandemic began through a lab leak, which the FBI has assessed with moderate confidence and the Energy Department has concluded with low confidence.  More widely, it has also sparked calls for greater scrutiny of the awarding of U.S. research grants.  The Wall Street Journal says the U.S. intelligence community is set to declassify more information about the origins of Covid-19 in the coming days, under a law recently passed in March.  It remains to be seen whether Hu and the other two scientists will be mentioned in the declassified intelligence.  Wall Street Journal

Blinken Announces $1.3 Billion in New Ukraine Aid.  U.S. Secretary of State Antony Blinken announced on Wednesday that the U.S. is pledging $1.3 billion in additional aid for Ukraine to bolster its energy and infrastructure systems.  Speaking at the Ukraine Recovery Conference in London, Blinken said $520 million of the aid will overhaul Ukraine’s energy grid; $657 million will modernize Ukrainian ports, rail lines and other critical infrastructure; $100 million will go towards digitizing Ukraine’s customs and other efforts to counter corruption; and $35 million will support Ukrainian businesses through financing and insurance.  Blinken said this new aid will help ensure Ukraine is a “secure, independent country, fully integrated with Europe, connected to markets around the world.”  He added that the aid adds to the over $20 billion in economic and development assistance the U.S. has already provided to Ukraine.  Reuters Washington Post

India’s Modi Visits Washington.  Indian Prime Minister Narendra Modi arrived in the U.S. on Wednesday for a four-day state visit.  He will meet with President Joe Biden during his trip; Modi and Biden are expected to sign defense deals, including on production of General Electric jet engines in India and New Delhi’s purchase of U.S.-made armed drones.  U.S. officials have called on Biden to raise human rights concerns with Modi.  Experts say the U.S. is also likely to push India on its stance on the Ukraine war given New Delhi’s continued ties with Russia, though Modi told the Wall Street Journal that he does not believe such criticism is “widespread” and that it is “well known and well understood” that “India’s top-most priority is peace.  Regarding China, U.S. National Security Council spokesman John Kirby pushed back on questions over whether Modi’s visit is part of U.S. efforts to strengthen ties with India to counter Beijing, saying the state visit “is not about sending a message to China,” but instead about showing U.S. commitment to India.  Reuters South China Morning Post Wall Street Journal

Pentagon Says Aid Provided to Ukraine Overvalued by $6.2 Billion.  The U.S. Department of Defense announced on Tuesday that it overvalued aid it provided to Ukraine since the start of Russia’s invasion in 2022 by $6.2 billion, surpassing a previous estimate of $3 billion.  Deputy Pentagon spokeswoman Sabrina Singh confirmed that the department overvalued Ukraine military aid by $3.6 billion in fiscal 2023 and $2.6 billion in the year prior.  Singh said the accounting error was caused by a “significant number of cases,” including military officials mistakenly recording the value to replace military equipment sent to Ukraine rather than the value of the actual equipment.  The miscalculation means Congress likely does not need to approve additional funding for Ukraine military aid before the end of the fiscal year in September.  CNN Washington Examiner

Cuban Officials Return from Russia Visit With Promises of Russian Investment.  Cuban state media reported on Tuesday that a delegation of top Cuban officials, including Prime Minister Manuel Marrero and Foreign Vice Minister Gerardo Penalver, concluded an 11-day visit to Russia.  The trip followed a trade forum in May in which longtime allies Cuba and Russia agreed to almost 30 trade deals, covering Cuban rum and sugar exports and wheat and crude oil imports from Russia.  Russia will reportedly transfer 1.64 million tonnes of oil and oil products to Cuba annually, and soon the Russian airline Aeroflot will renew flights to the nation.  Cuba and Russia have increased economic cooperation and investments in light of U.S. sanctions; the Communist-run island has been under a U.S. trade embargo since 1958, and Russia has been hit with various sanctions since invading Ukraine. Penalver told media in Havana that Cuba “must look for new avenues to carry out our economic relations outside the scope of ... the (U.S.) dollar, which is giving way more and more to a multipolar world, and where other actors such as China, India and Russia acquire greater relevance.”  Reuters

Western Europe

E.U. Proposes $55 Billion Ukraine Financial Aid Package.  European Commission President Ursula von der Leyen announced on Tuesday that the EU is proposing a four-year financial aid package for Ukraine worth 50 billion euros ($54.62 billion).  The financing aims to offer Ukraine long-term nonlethal assistance to ensure the Ukrainian government continues to function and support reconstruction efforts.  The planned package does not include humanitarian aid or military assistance.  Officials say 33 billion euros of aid will be administered through loans, and around 17 billion euros in grants.  Experts say the package falls short of Ukraine’s long-term needs; Ukraine says it needs at least $20 billion for next year alone, the International Monetary Fund estimates Ukraine needs 75 billion euros of financing through 2027, and the World Bank says Ukraine’s reconstruction and recovery costs are already at $411 billion.  Despite this, the proposal marks progress in ensuring sustained European support, especially amid concerns that the U.S. may alter its Ukraine support after its next presidential election.  CNN Reuters

Norway Pledges $23 Million in Aid for Ukraine Nuclear Safety.  The Norwegian Foreign Ministry announced on Tuesday that Norway is committing 250 million Norwegian kroner ($23 million) to bolster Ukraine’s nuclear safety and security.  Around $9.3 million of the support will go to the IAEA to support the nuclear watchdog’s experts at the Russian-occupied Zaporizhzhia nuclear power plant, the Chernobyl site, and three other operational nuclear power plants in Ukraine.  Another $14 million of the aid will be administered by the Norwegian Radiation and Nuclear Safety Authority (DSA) to increase nuclear safety cooperation with Ukraine to reduce the risk of radiological incidents.  CNN Kyiv Independent

German Spy Agency Warns of Chinese, Russian Spy Activity.  Germany’s domestic intelligence agency, the Federal Office for the Protection of the Constitution (BfV), released a report on Tuesday that warns that espionage, cyberattacks, and disinformation campaigns, specifically from China and Russia “pose a serious threat”.  The report notes that Russian spying and disinformation operations in Germany increased significantly in 2022 and are expected to continue this year.  The report puts China as “the greatest threat in terms of economic and scientific espionage” and that Germany was one of China’s most important targets in Europe for legal investments.  The report says that the Russian invasion of Ukraine and an increase of global tensions with China have exposed Germany to an increased level of foreign interference, given its position within NATO and as one of the most powerful countries in the EU. Iran, Turkey, and North Korea, were also highlighted for an increase in intelligence operations within Germany. This report comes after Germany discovered a high-level mole in its own foreign intelligence services, as well as after it released its first national security strategy.  Deutsche Welle New York Times

Germany's Scholz Pushes China to Help End Ukraine War.  German Chancellor Olaf Scholz spoke with Chinese Premier Li Qiang in Berlin on Tuesday.  In their talks, Scholz urged China to “exert even greater influence on Russia” to help end the Ukraine war.  Scholz again pressed China to not transfer weapons to Russia, and both he and Li agreed to maintain opposition to the use of nuclear weapons in the conflict.  Scholz separately emphasized the importance of economic cooperation with Beijing despite the EU’s de-risking efforts to lessen economic dependence on China.  Li did not comment about Moscow, focusing instead on urging Germany to establish closer ties rather than considering China a “systemic rival.”  According to state-backed media CCTV, Li said that the two nations should “push China-Germany relations to a new level” in order to “better serve the development of the two countries, and inject more positive energy and stability into the world.” Scholz in turn advocated for extended communications, such as direct conversations and face-to-face discussions, and avoided controversial topics such as Taiwan or Hong Kong.  South China Morning Post  

EU Proposes De-Risking Plan to Distance from China, Russia.  The EU has unveiled a new economic security strategy intended to restrict autocratic governments’ access to European technologies. The plan aims to make European economies and supply chains more resilient to threats by tightening existing rules on purchases made by those outside of the EU.  The plan specifically bolsters controls that target exports with potential espionage and military functions that may be used by hostile governments.  The EU must now get its member states, which all set their own export policies, to agree to the plan. This plan is expected to be discussed during the next EU summit in Brussels next week.  South China Morning Post Washington Post

Central and Eastern Europe

Ukraine Reports 35 Clashes With Russia, Progress in Counteroffensive.  Ukraine continues to report progress in its counteroffensive.  The Ukrainian military reports that it had 35 clashes with Russian forces in eastern Ukraine within the last day. It added that Russia continues to focus its forces on Lyman, Bakhmut, Avdiivka and Marinka in the Donetsk region and that Russian troops are on the defensive in the southern Kherson and Zaporizhzhia regions.  Ukrainian President Volodymyr Zelensky said on Tuesday that Ukraine’s military is “destroying” Russian forces in eastern and southern Ukraine. The commander of Ukraine’s land forces, General Oleksander Syrskyi, said his troops are advancing on the flanks of Bakhmut, as well as defending against Russian attacks in the northeastern city of Kupiansk.  Ukraine’s Deputy Minister of Defense Hanna Maliar also told Ukrainian media that Ukrainian forces are gradually progressing “meter by meter,” adding that the counteroffensive’s “main strike is still ahead.”  The Secretary of Ukraine’s National Security and Defense Council, Oleksii Danilov, added that a major priority of Ukraine is to “exhaust” and destroy Russian supply points, saying that recent destruction of Russian military equipment is the “highest since the beginning of the war.”  Russia’s Defense Ministry countered Ukrainian reports, claiming that Russian troops destroyed eight Ukrainian ammunition warehouses in the last 24 hours and repelled Ukrainian attacks in three areas, including the occupied eastern city of Donetsk and areas in the southern Zaporizhzhia region.  CNN Reuters

Russia Claims it Downed Three Ukrainian Drones Near Moscow.  Russian authorities said Wednesday that Russian forces intercepted three drones outside of Moscow that approached warehouses of a local military unit.  Officials said the drones were downed by electronic jamming near the village of Lukino, which is administratively part of Moscow.  There were no reports of damage or casualties.  Russia’s Defense Ministry said the drones were part of an “unsuccessful attempt at a terrorist attack” by “the Kyiv regime.”  Ukraine did not comment on the matter.  Associated Press

Ukraine Says Russia ‘Mined’ Zaporizhzhia Nuclear Power Plant.  Kyrylo Budanov, the head of Ukraine’s GUR military intelligence agency, accused Russia of “mining” the cooling pond at the Zaporizhzhia nuclear power plant. Experts say a detonation of the mines could cause a significant radiological incident.  The plant has been under Russian occupation since Moscow’s invasion of Ukraine last year.  Both sides have accused the other of shelling the power plant, and efforts to establish a demilitarized zone around the plant have failed so far.  Separately, the Ukrainian Defense Ministry additionally dismissed a Russian allegation that it is building a “dirty bomb”. The ministry warned that “if Russia is talking about a ‘dirty bomb’, its use by Russia could be a real threat,” suggesting that Russia could have made the accusation to precede its use of a dirty bomb that it would blame on Kyiv.  Reuters

Blinken Meets Ukraine Foreign Minister to Discuss U.S. Support, China Talks.  U.S. Secretary of State Antony Blinken met with Ukrainian Foreign Minister Dmytro Kuleba on Tuesday ahead of the Ukraine Recovery Conference in London.  Kuleba tweeted that he and Blinken discussed ways to support Ukraine’s counteroffensive and Ukraine’s NATO membership bid ahead of the alliance’s Vilnius summit next month.  The U.S. State Department added that Blinken discussed his talks with Chinese officials about the Ukraine war, as well as reiterated U.S. support for Ukraine and emphasized the importance of the private sector in Ukraine’s modernization and recovery.  CNN

‘Well Let Them Fight:’ Russia’s Lavrov Criticizes NATO Refusal to ‘Freeze’ Ukraine War.  Russian Foreign Minister Sergei Lavrov on Tuesday said that if NATO disagrees with freezing the conflict in Ukraine, then the defense alliance can continue waging war. Lavrov told reporters in Minsk, “If NATO, through the mouth of Stoltenberg, once again declares that they are against freezing, as they say, the conflict in Ukraine, then they want to fight. Well, let them fight.” These comments come in response to NATO Secretary-General Jens Stoltenberg’s comments on Monday at a conference with German Chancellor Olaf Scholz that while NATO seeks an end to the conflict, “a just peace cannot mean freezing the conflict and accepting a deal dictated by Russia,” referencing Ukrainian demands that there can be no peace without a full withdrawal of all Russian troops from Ukrainian territory.  Al Jazeera

Russia’s Shoigu Warns Against Striking Ukraine.  Russian Defense Minister Sergei Shoigu on Tuesday said Moscow has information that Ukraine is planning to strike Russian-occupied Crimea with long-range U.S. and British missiles.  He warned that any such missile attacks will mean that the U.S. and Britain “would be fully dragged into the conflict” and that Russia would respond with “immediate strikes on decision-making centers in Ukraine.”  He added that Ukraine’s military has staged 263 attacks on Russian forces since June 4, without describing the actions as a counteroffensive, but has “not accomplished its goals.”  Al Jazeera Reuters Radio Free Europe 

Asia and Oceania

Italian Warship Moors in Japan.  The Italian Navy’s offshore patrol vessel Francesco Morosini arrived in Japan for a port call on Wednesday.  The ship will moor at Yokosuka Naval Base for seven days, making it the first Italian Navy asset to anchor in Japan.  The vessel is on a five-month deployment to the Indo-Pacific region, adding to European efforts to boost maritime presence in the region amid China’s increasing assertiveness.  Nikkei Asia

India Gives Corvette Warship to Vietnam.  In an effort to strengthen defense ties, India is scheduled to give a naval warship to Vietnam. The specific ship is the Indian Missile Corvette INS Kirpan.  The Indian government stated that the warship would be “a milestone in enhancing the capabilities of the Vietnam People’s Navy.” India’s move to bolster defense cooperation with Vietnam comes amid New Delhi’s concerns amid China’s rise in the region.  Hanoi has similar concerns, namely over Chinese warships and other survey vessels entering Vietnam’s exclusive economic zone. China claims the entire South China Sea as its territory including waters claimed by other countries. Analysts note that the new missile corvette given to Vietnam is mainly used for coastal patrols.  VOANews

North Korea Criticizes Blinken ‘Begging Trip’ to China.  North Korean state media denounced U.S. Secretary of State Anthony Blinken’s rare visit to Beijing as a “begging trip” to alleviate strains after failing to pressure China. On Monday, Blinken and Chinese President Xi Jinping met and agreed to steady their relationship in an attempt to prevent conflict.  Blinken also said that he called on China to persuade North Korea to cease the launching of missiles, as Beijing holds a "unique position" to urge Pyongyang to partake in conversation.  North Korean commentary said that the visit was done to lighten tensions because the "attempt to press and restrain China may become a boomerang striking a fatal blow to the U.S. economy." The commentary condemned Blinken’s “recent junket” as a “disgraceful begging trip of the provoker admitting the failure of the policy of putting pressure on China," and accused the US of intensifying regional tensions by being “anti-China.”  Reuters 

Middle East and Northern Africa

Palestinian Gunmen Kill Four Israeli Civilians in Occupied West Bank.  Four Israeli settlers were killed after two Palestinian gunmen opened fire at a restaurant and gas station near the settlement of Eli in the occupied West Bank on Tuesday.  Four other people were injured during the attack. One gunman was killed during the attack while the second gunman was killed during the subsequent manhunt. Hamas has claimed responsibility for the attacks.  Israeli Prime Minister Benjamin Netanyahu responded by saying Israel will “settle the score” with the attackers.  New York Times Reuters

Sub Saharan Africa

Kenya, EU Sign Trade Deal.  Kenya has signed an Economic Partnership Agreement (EPA) with the European Union on Monday. The deal will guarantee duty free access for its farm produce while European goods will see tariffs reduced over a 25 year period. Kenta will also be able to protect some of its products either by excluding them from tariff cuts or by triggering safeguards in case there is a sudden increase in imports from the EU. So far, trade between Kenya and the EU has increased by 27% from 2018 to 2022. The deal is awaiting ratification in Parliaments in Kenya and the EU.  Deutsche Welle Reuters

Cyber and Tech

Biden Convenes Meeting with AI Experts, Technology Advocates on Risks, Potential.  In a meeting with technology leaders in San Francisco on Tuesday, President Joe Biden pointed to the “risks and enormous promises” of AI technologies.  Biden said his administration is committed to protecting Americans’ rights and privacy, with a special focus on “addressing bias and misinformation” while ensuring the safety of AI systems “before they are released.”  In the meeting with eight academic experts and technology advocates, the president predicted:  “We’ll see more technological change in the next 10 years than we saw in the last 50 years.”  Participants in the meeting included Tristan Harris, executive director of the Center for Human Technology, Jim Steyer, the CEO of Common Sense Media, and California Gov. Gavin Newsom.  Media reports noted that the office of White House chief of staff Jeff Zients “is developing a set of actions the federal government can take over the coming weeks regarding AI.”  Leading administration officials are meeting weekly on the issue in addition to ongoing work of federal agencies.  Reuters Associated Press Washington Post

Justice Department Creates New Nation-State Cybercrime Prosecuting Team.  A new section of the Justice Department’s National Security Division will be responsible for prosecuting malicious cyber activity by foreign actors.  The section will increase the “scale and speed” of Justice Department disruption efforts as well as prosecutions of both nation-state cyberthreats and state-sponsored threat actors.  Assistant Attorney General Matthew Olsen, chief of the National Security Division, noted that prosecutors of the new National Security Cyber Section will be “positioned to act quickly as soon as the FBI or an [intelligence community] partner identifies a cyber enabled threat.”  The new section makes cybercrime prosecutions equal to the activities of the division’s three existing components.  TheRecord

House Bill Would Bring Needed AI Understanding Through Blue-Ribbon Commission.  The creation of a federal commission to develop recommendations for AI regulation is the focus of a bipartisan House bill introduced Tuesday by Reps. Ted Lieu and Ken Buck.  The legislation would involve Congressional and White House appointment of a 20-member commission representing government, industry, civil organizations, and the computer science sector.  Lieu said the “blue-ribbon commission” would allow legislators and policymakers to gain understanding of the impacts of generative AI tools on society before acting.  He noted: “I think it's good to have some time pass. It's good to have a commission of experts advise us, because if we make a mistake as a member of Congress in writing legislation, you need another act of Congress to correct that."  The envisioned commission would issue three reports in a two-year span with recommendations for “mitigating the risks and possible harms” of AI while “protecting” U.S. tech innovation.  Twelve appointments to the commission would be divided equally between congressional Democrats and Republicans while the president would name eight commissioners.  Lieu said Congress would not be precluded from stepping in with legislative actions before receiving commission recommendations, but that it would be “prudent” to defer “overarching legislation” until the multidisciplinary group could offer insights.  Washington Post Politico

EU Commission Asks Added Funding To Grow Technology Investment Program.  The EU’s executive arm, the European Commission, has called for increased funding by EU member states to fuel investments in leading technologies.  Commission President Ursula von der Leyen presented the request for an additional 10 billion euros (approx. $11 billion) for 2024-2027 to create a total technology investment fund of 160 billion euros ($175 billion).  She expressed the view that "the future of the strategic industries should be made in Europe," adding that EU investments would be amplified by the “crowding in of private capital.”  The new program is known as Strategic Technologies for Europe Platform (STEP), and will be directed at developing European initiatives in microelectronics and quantum computing as well as renewable energy and electricity storage.  The commission’s request comes as it is reviewing the EU’s shared long-term budget to assess the impact of expenses related to COVID-19 and the Ukraine conflict, among other factors.  Reuters

Russia-Linked Cyber-Espionage Group Breaches Ukrainian Government Email Servers.  The threat group known as APT28, which has been linked to the GRU, Russia’s military intelligence agency, has conducted a campaign directed at “Roundcube” email servers used by Ukrainian government and commercial organizations.  The APT28 group is known for its cyber-espionage exploits that involve duping email recipients into opening malware attachments allowing Roundcube server vulnerabilities to be penetrated.  BleepingComputer notes that once the email servers are breached, Russian military intelligence hackers deploy malicious scripts redirecting incoming emails to an email address under the attackers' control.  The scripts also allow monitoring of email traffic and thefts of address data, session cookies, and other Roundcube database information.  Ukraine’s Computer Emergency Response Team concludes that the goal of the campaign appears to be the harvesting and theft of military intelligence.  Recorded Future’s threat research division, Insikt Group, further reports that APT28, also known as BlueDelta, likely targeted a Ukrainian prosecutor and central government authority in addition to carrying out “reconnaissance activity involving additional Ukrainian government entities and an organization involved in Ukrainian military aircraft infrastructure upgrade and refurbishment."  BleepingComputer  TheRecord

Pro-Russian Hackers Form ‘Darknet Parliament,’ Launch Attacks on European Banks.  The pro-Russian Killnet hactivist group has launched cyberattacks on multiple European financial institutions, including the European Investment Bank (EIB).  Killnet said it targeted the “inter-network infrastructure” of the EIB, and the investment bank has confirmed a cyberattack degraded the availability of its website.  A Killnet post on its Telegram channel Monday taunted its recent targets, saying “perhaps the (banking) transfer system is affected by bad weather.  The weather forecasters say that not only IBAN (International Bank Account Number) will be dead, but also SEPA (Single Euro Payments Area), WISE, SWIFT.”  Last week, three well known threat actors – Killnet, Anonymous Sudan, and REvil – announced that they were forming a “Darknet Parliament.”  According to Killnet’s Telegram account, the three groups “came to a common decision:  SOLUTION No.0191.  Today we are starting to impose sanctions on the European banking transfers systems,” targeting the banking systems noted in Killnet’s subsequent post.  A related Anonymous Sudan Telegram post last Friday elaborated on the banking systems attacks, stating:  "Guys from the KillNet, Revil, and Anonymous Sudan groups have united in this campaign. They plan to "repel the maniacs according to the formula: no money - no weapons - no Kiev regime." Among the targets: European and US banks, SWIFT, and the US Federal Reserve System."  CyberNews  (Follow-up CyberNews Report) Telegraph

European Watchdog Coalition Asks Protective Action by Europe, U.S. Against AI Risks.  European consumer groups made a joint appeal to the regulatory authorities of EU member states to investigate AI technologies underlying generative AI tools like ChatGPT to assess privacy risks that exist before the EU AI Act takes effect.  Thirteen watchdog groups contacted national consumer and data protection organizations, calling on them to use both existing laws and new legislation to address the harms arising from use of generative AI.  The activists cited a Norwegian Consumer Council report that examined the risks posed by  AI chatbots, including erroneous medical information, deception, fabrication of information, and illegal use of personal data extracted from the Internet.  While the EU AI Act is still being finalized, the consumer advocates representing Italy, Spain, Sweden, the Netherlands, Greece and Denmark, warned that the time gap will leave “consumers unprotected from a technology which is insufficiently regulated in the meantime, and developing at great pace.”  A transatlantic consumer coalition also wrote to President Joe Biden to request U.S. action to protect consumers from generative AI misuse and harm.  Associated Press

FedScoop Explores Federal Agencies’ Readiness for Post-Quantum Era.  In light of the stakes involved for government data security, FedScoop reached out to a number of Federal agencies for updates on their actions to meet Office of Management and Budget (OMB) requirements to prepare their systems for the age of code-breaking quantum computers.  FedScoop concludes from the responses it received that “it’s not clear how well all federal agencies are keeping up.”  The Office of Management and Budget (OMB) last November instructed federal agencies to study systems that may require transition to post-quantum cryptography (PQC), with a May 4 deadline for an inventory of those systems.  The agencies also were required to designate a lead official to manage the inventory and PQC migration.  According to FedScoop, a number of departments, including Homeland Security, Commerce, and Health and Human Services, confirmed they were up to date in meeting the mandates.  Others, however, were unclear about their status.  Several components, including USAID and the departments of Agriculture and Education, said they were unable to share information. Despite repeated requests for response, the Department of Transportation, Treasury, and the Social Security Administration, did not offer any comment.  An OMB official told FedScoop that “agencies have prioritized their systems for migration to post-quantum cryptography.  OMB and ONCD (Office of the National Cyber Director) are working with agencies to ensure accurate cost estimates as we prepare for this transition.”  Following the inventory and naming of a lead official, the agencies are to prepare funding estimates for how much the post-quantum cryptography (PQC) migration could cost.  Sam Howell, a researcher with the Center for a New American Security, noted that “The consequences associated with…the recent Discord leaks would pale in comparison to the consequences associated with agencies’ failure to comply” with OMB’s directives.  She added that “[it’s] important to begin the migration to post-quantum cryptography now because the process could take a long time and entails a lot of challenges.”  FedScoop

Microsoft Mitigates ‘Dangerous’ Azure Platform Vulnerabilities.  Microsoft has announced fixes to two vulnerabilities in its Azure cloud computing platform that created opportunities for hackers to access user data and alter their virtual environments.  The reported flaws, which were described as “dangerous” by Orca security researchers, might have allowed threat actors to insert malicious code into trusted websites, which in turn could result in access, data theft, and system compromise.  Microsoft said it is unaware of any actual exploitation of the vulnerabilities.  The company issued a statement that a series of fixes were completed on May 24, leading to mitigation for both service vulnerabilities.   TheRecord

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