WOW ! WHAT A WEEK !

Sam Altman fired AND reinstated from OpenAI. The CEO of Binance indicted for money laundering and the most notorious Ransomware gang at the moment publishing rules on how much ransomware they’ll be asking you when you get hit by them.

Let’s dive straight in.

[CRYPTO]
Another Crypto King Tumbles From His Throne

This is a bad time for “crypto bro’s” who go by their initials.

According to US court documents that were made public yesterday, Binance's CEO Changpeng Zhao is stepping down and has pleaded guilty to money laundering. Binance is the largest cryptocurrency trading platform in the world. Binance Coin's 6% price reduction in response to the announcement set off a chain reaction of cryptocurrency price declines.

Binance and the DOJ reached a settlement that included Zhao's dismissal. The DOJ had accused Binance of breaking US prohibitions against money laundering by allowing users from sanctioned nations, such as Russia and Iran, to trade on the site. Despite allegedly paying a $4.3 billion fine, Binance will maintain its commercial operations.

The man behind the scenes: Zhao, whose initials are "CZ," established Binance in 2017 and guided the firm to a stratospheric ascent to the pinnacle of the cryptocurrency industry, contending with the other now-infamous crypto person Sam Bankman-Fried aka SBF.

CZ is likely on page one of SBF's burn book. Since CZ's tweet announcing his intention to dump all of his FTX token began the bank run that led to FTX's insolvency, SBF held his opponent responsible for the company's demise.

Binance was similar to that buddy who lingers at the party after the police leave and sips the last beer: Some industry insiders felt the exchange was "too big to fail" as it became the conduit for 67% of all cryptocurrency trades on international markets. Since the United States does not have an extradition agreement with the United Arab Emirates, where CZ is headquartered, he is likely to avoid jail time.

Participating in the trading of digital currencies is risky business right now. In a separate case, the SEC is accusing Binance of offering cryptocurrency futures without being registered as a futures commodity merchant and of inflating its US trading volume artificially. Another of the biggest cryptocurrencies in the world, Kraken, was also slammed with a comparable lawsuit by the SEC on Monday.

[AI]
Altman Fired and Reinstated

I have to admit - I spent a bit too much time this weekend on X (Twitter) - closely following the unfolding Sam Altman saga. Here's a chronological breakdown of the events that transpired.

Friday, November 17th: Leadership Transition Announced OpenAI revealed a major leadership change: CEO Sam Altman was removed from his position, citing issues with his candor in communications with the board. Concurrently, Greg Brockman, the Chairman of the Board, announced his resignation. Mira Murati was appointed as the interim CEO.

Weekend Developments: Following the announcement, there were immediate repercussions within the organization. Three senior researchers resigned in solidarity with Brockman and Altman. Additionally, Microsoft, a significant investor in OpenAI with a 49% stake, expressed surprise at the developments, indicating a lack of prior knowledge.

Saturday, November 18th: Amidst the unfolding events, there were rumors and expectations of Altman potentially being reinstated, driven by support from OpenAI employees and pressure from investors. Some investors were threatening lawsuits against the company. Mira Murati spoke out in support of Altman and signaled she would not take up the CEO role.

Around the same time Ilya Sutskever - another board member and the main brain behind OpenAI - tweeted out his deep regret for voting against Sam Altman

Sunday: Emmet Shear, co-founder of Twitch, was appointed as the new CEO of OpenAI, marking the third CEO in as many days. Als on Sunday - Satya Nadella - Microsoft’s CEO welcomed Altman and Brockman into Microsoft. He offered them a job - and they accepted.

Monday: A letter circulated among OpenAI employees, threatening mass resignation if the board was not overhauled. The letter, signed by over 700 of the 770 OpenAI employees, indicated a deep divide within the organization regarding the board's decision.

Tuesday, November 21st: Negotiations were underway for Altman's possible return. Discussions involved board member Adam D'Angelo and were supported by OpenAI investors. Simultaneously, there were reports of law enforcement inquiries into the circumstances surrounding Altman's dismissal.

Resolution and New Board Formation By Tuesday night, an agreement was reached for Altman's return as CEO. A new board was formed, including Brett Taylor as chair, with Larry Summers and Adam D'Angelo as members.

Larry Summers is a very strange choice. Just google him.

In the aftermath we are left with a LOT of questions.

Why was Altman fired, is his reinstatement a threat to AI safety, was it all about Board member De Angelo , CEO of Quora and Poe that feels threatened by ChatGPT’s progress. Or was this a coup in order to merge OpenAi with Anthropic? And how does someone like Larry Summers get appointed to such a position?

[Cyber]
Lockbit’s Budgeting Exercise

NTT leak: A former worker at the Japanese phone company NTT stole and shared the personal information of 9 million customers. The worker sold the information from a computer in an NTT call center to data brokers in the area. The theft happened in April 2022, but no one knew about it until July of this year, when Japanese police found the data while they were investigating. NTT revealed the breach in October and said that one of its telemarketers was to blame.

Call for an end to ransom payments: The CEOs of five Canadian hospitals that have been hacked by ransomware groups want the government to officially ban ransom payments. The hospital executives want the government to keep the promise they made at the recent International Counter Ransomware meeting. As a way to stop hackers from getting money, Canada and 49 other countries promised not to pay ransoms to them. At the end of October, ransomware hit five hospitals in the Ontario area. The five CEOs chose not to pay to stop "feeding the monster."

LockBit has new rules for negotiating a ransom:The LockBit ransomware group has announced new rules for its partners to follow during the ransom settlement process. At the beginning of October, the new rules went into force. The rules were put in place by LockBit administrators after seeing agents asking victims for small ransoms and offering big discounts. Researchers at Analyst1 say that affiliates will now have to charge different amounts of ransom based on how much money the target makes each year (see below). Now, affiliates can't offer discounts that are more than 50% off the original ransom claim either.

• Up to $100 million companies pay between 3% and 10%.

• Companies that make up to $1 billion pay between 0.5% and 5%.

• Companies that make more than $1 billion pay between 0.1% and 3%.

Hydra dark web market analysis: A group of US researchers has written an in-depth report on Hydra, the biggest dark web market seen so far. The study has an interesting table that shows how much money the biggest dark web markets made each year over the last ten years.

[Closing Thoughts]
What We Learned

This was a tough one to write. So much news - so much happening. On Monday and Tuesday the OpenAi news seemed the most significant news in the world. I had replaced this newsletter with an entire article on what has happened but with the dust settling, I chose not to pursue this approach and revert to the usual format.

So .. let me know what you think. Did you know you can engage with the newsletter on the website ?

You can comment, share it, break it down , build it up .. you name it !