AML-CFT in Action: How Regulations Impact Virtual Digital Asset Service Providers

Introduction

MGM Resorts, which is an international company, has suffered an ongoing cyberattack which led to the shutdown of a number of its computer systems, including its website, in response to a cybersecurity issue. MGM Resorts International is in touch with external cybersecurity experts to resolve the issue since it has affected its entire Computer systems. MGM is a larger entity and operates thousands of hotel rooms across Las Vegas and the United States. MGM Resorts shared about the incident and posted that MGM recently identified a cybersecurity issue affecting some of the Company's systems. Promptly after detecting the issue, they quickly began an investigation with assistance from leading external cybersecurity experts. MGM has notified law enforcement and took prompt action to protect systems and data, including putting down certain systems. MGM further stated that the investigation is ongoing. 

‍The issue 

Basic operations such as the online reservation and booking system MGM have been affected and shut down due to the cybersecurity issue faced by a lot of visitors. Since earlier times, casino security has been the state of the art as they were very vulnerable to attacks by robbers and con artists. This is what we have also seen in a lot of movies. In today's time, con artists and robbers are now strengthened by cyber tactics. This is exactly what was seen in the case of the MGM attack. 

MGM Resorts is home to best-in-class amenities and facilities for guests, but with the increase in tourist traction, the vulnerabilities and the scope of cyber attacks have also increased. This is also because of open wifis in the establishments and the transition of casinos to e-casinos, thus causing a major shift towards digital and technology-based intervention for better customer experience and streamlining a lot of operations. 

How real is the threat? 

As reported by MGM Resorts, the following systems were impacted in the cyber security attack: 

• Slots Machines: The slot machines placed in the casino suddenly went offline and displayed an error message for the players. Some players who were already using the slot machines lost their bets and were unable to withdraw their winnings. 
• Room Keys: Some of the guests reported that the room keys became unresponsive, and in some cases, the replacement keys were also inactive for some time, causing massive chaos at the reception.  
• Booking Status: All the bookings in today's time are made online; this was one of the worst-hit segments of the cyber attacks. Most of the bookings made automatically were put on hold, and the confirmations could be made only from the hotel reception, thus causing massive cancelling of the bookings and both the hotel and customers losing out on money.
• MGM App: The official app of MGM Resorts was completely down, thus causing a situation of confusion and panic among the guests. The users also received notifications to speak to different customer care executives, but some of the numbers were unattentive and seemed to be operated by bad actors. 
• Data breach: The main focus of the cyber attack was dedicated to committing a data breach. The attack led to the breach of personal data of most of the users registered on the app or on the system of MGM Resorts. 

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Conclusion 

The cyber attack on the tourism industry is a major and growing concern for the industry and its customers. Seeing the volatility of the data and the regular inflow of personal information this makes the hotel's cyber security system a vulnerable choice for bad actors. The cyber attack was no less than a fire sale, where in all the segments of the services offered were impacted. Similar attacks were reported by MGM in 2019 and 2020, and subsequently, the safety measures were also deployed, but the bad actors have hit the resorts chain owners again, in such cases the most paramount defence is having a safe and regularly updated firewall, upskilling of staff for IT issues and attacks, active reporting and investigation mechanisms for assisting the LEAs. In the times of rising cyberattacks, one needs to be critical of their data management and digital footprints. The sooner we adopt safe, secure and resilient cyber hygiene practices, the safer our future will be.  

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References:

https://www.bleepingcomputer.com/news/security/mgm-resorts-shuts-down-it-systems-after-cyberattack/

https://www.usatoday.com/story/tech/news/2023/09/11/mgm-cyber-attack-impact-resorts-hotels-us/70828503007/

https://www.cnbc.com/2023/09/12/mgm-resorts-cybersecurity-incident-forces-system-outage.html

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Introduction

In the new age of technologies the internet and social media continue to witness a surge in deepfake videos a technological phenomenon that blurs the line between reality and fiction. The string of deepfake videos of Bollywood actors and other famous personalities has raised serious concerns. While Prime Minister Narendra Modi spoke against the risks of artificial intelligence at the G20 Virtual Summit. The central government has recently announced that it will soon set up dedicated regulations to tackle this Menace. This will include holding social media platforms and creators responsible for their actions against the rules and regulations. Very often most people shy away from initiating a legal process or taking action while being victims of misuse of fast-paced tech but the government has announced its big support to the victims and promised to stand by complaints against deepfake videos especially this includes helping individuals to report the incidents and any violations by platforms.

Social media platforms to realign their policies as per the Indian laws

The Ministry of Electronics and Information Technology (MeitY) announced on 24th November 2023 that it will be giving social media platforms seven days time period to align their terms of service and other policies with Indian laws and regulations in order to address the issue of hosting of deepfakes on these platforms. All platforms must align and transform their terms of use with their users to be consistent with the 12 areas that are prohibited under rule 3(1)(b) of the Information Technology (IT) Rules, 2021.

The platforms will ensure harmonization and alignment of their terms & policies so that every user on every platform is aware that when they use a platform the platform intends to be a safe and trusted platform and the platform will not tolerate these 12 types of content or information that have been prohibited under the IT Act and the IT rules. The government approach is to collectively advocate for responsible and safe use of the Internet. The government has taken a proactive step in partnership with these social media platforms to ensure an era where such platforms will be a lot more responsible and a lot more responsive to the expectations under the law and more compliant.

Officer to be appointed under rule 7 

As Deepfake Videos continue to surface on social media, the Government has geared up to curb such content online. Mr. Rajeev Chandrasekhar Minister of State, (Meity), stated that the government will soon appoint an officer to take appropriate action against deepfake videos. This statement came after the government meeting with industry stakeholders and important players held on 24 Nov 2023. He added that Meity and the government of India will nominate an officer under rule 7  (IT rules 2021) and will ensure full compliance expectations from all the platforms. An officer appointed under Rule 7,  will be entrusted with building a mechanism where users can put in their complaints regarding deepfakes and MeitY may also assist such aggrieved users with filing FIRs in such cases. Mr. Rajeev Chandrasekhar, Minister of State, (Meity) also added that we will also be creating a platform where it will be very easy for netizens to bring to the attention of the government of India and notices of allegations or reports of violation of law by the platforms and the rule 7 officer will take that digital platform information and respond accordingly. 

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (updated as on 6.4.2023)

Rule 3(1)(b) states that intermediaries shall inform its rules and regulations, privacy policy and user agreement to the user and shall make reasonable efforts to ‘restrict’ the users from hosting, displaying, uploading, modifying, publishing, transmitting, store, update or sharing any information that is prohibited under this rule which also includes deepfake, misinformation, CSAM(Child sexual abusive material) etc.  As per rule 3(2)(b) Intermediaries shall remove or disable access within 24 hours of receipt of complaints of contents that expose the private areas of individuals, show such individuals in full or partial nudity or in a sexual act or is in the nature of impersonation including morphed images etc. 

Ongoing Efforts Ahead of Crucial Meeting with Tech Giants

Ahead of the government meeting with online platforms such as Google, Facebook, and YouTube on Friday, 24th November 2023, Mr. Rajeev Chandrasekhar Minister of State, (Meity) added that way back from October 2022 the government of India had been alerting them to the threat of misinformation and deepfakes which are part of misinformation. He further added that the current IT rules under the IT Act provide for adequate compliance requirements on their part to deal with deepfake.

Deepfake Misinformation

Misinformation powered by AI becoming an even more potent force to disrupt and to mislead and to create chaos and confusion at a scale and of a type that is deeply detrimental. Deepfakes in a very simple basic way is misinformation which is powered by or enhanced by AI. Video-based deepfake misinformation is more dangerous since it has a greater reach as video consumption today is the preferred choice by users on the internet.

Way forward

The Honorable Prime Minister has raised the issue that deep fakes are deeply disruptive they can create divisions and all kinds of disruptions in communities, in families and therefore misuse of deepfake technology is a very clear present danger to the safe and trusted internet.

The Government is on its way to draft a dedicated legislation dedicated to tackling deepfakes.

Even as we speak to a future regulation and a future law which is certainly required given that our IT Act is 23 years old. However current IT rules provide for compliance requirements by the platforms on misinformation patently false information and deepfakes. Followed by the recent government advisory on misinformation and deepfake.

Conclusion

Prime Minister alerting of the dangers of deepfakes online. The government is now in the process of starting to look very seriously into this issue and also issued guidelines for intermediaries and in a finite period of time it is hoped that the threat of deep fakes would actually no longer exist in in our system. The government made it clear that apart from people spreading deepfake videos, the platforms making them spread and not taking action will also be liable they are currently liable and will be even more so in future after new rules and regulations are brought in.

References:

• https://www.moneycontrol.com/news/technology/deepfakes-meity-gives-social-media-platforms-7-day-ultimatum-to-align-their-policies-to-indian-laws-and-regulations-11805521.html
• https://www.azbpartners.com/bank/amendments-to-the-information-technology-intermediary-guidelines-and-digital-media-ethics-code-rules-2021/#:~:text=Prior%20to%20the%20amendment%2C%20under%20Rule%203(1)
• https://www.drishtiias.com/daily-updates/daily-news-analysis/amendments-to-the-it-rules-2021
• https://youtu.be/zmI2ml1d_Es?feature=shared
• https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1975445

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Executive Summary:

In the end of January 2024, India sees an inauguration of Ram Mandir that is a historical event to which people came culturally and spiritually. All communities in the world acknowledge this point of life as a victory and also understand how it unites people. In the midst of this genuine joy over success, there has been a disconcerting increase in malpractices designed to exploit people’s enthusiasm. This report aims at providing awareness and guidelines on how one can avoid the fraud activities that could be circulating as a celebration of Ram Mandir inauguration. An example cited here is on scams that give fake free recharge to users making them connect with the Prime Minister of India and UP Chief Minister Yogi Adityanath.

False Claim:

According to the message passed in WhatsApp, as a commemoration of the inauguration of Ram Mandir  in Ayodhya in January 2024, free Rs.749 mobile recharge for three months would be offered to all Indians across India by both the PM and UP CM. The message prompts the recipients to click on the blue link provided and then recharge their numbers.

The Deceptive Scheme:

We have been informed of a circulating link (https://mahacashhback[.]in/#1705296887543) stating that it offers ₹719 recharge in honor of the Ram Mandir inauguration. It is worth mentioning that this link does not belong to any legitimate movement concerning the inauguration; public excitement and trust were used for personal gain. 

Analyzing the Fraudulent Campaign:

• Exploiting Emotional Significance:Scammers are using the cultural and religious significance of Ram mandir inauguration as a cover to fool people into participating in its fraudulent scheme. 

• Fake Recharge Offers:The broadcasted link is offering a recharge pretending that they celebrate it’s inauguration. Such offers should be handled with care and established through authorized avenues.

• Bogus Landing Pages and Comments:The landing page linked to the link typically shows images of Ram Mandir and fake comments succeeding in a make-believe appearance. Legitimate projects linked to major events rely on official and trustworthy communication mechanisms. 

• Data Collection Attempts:However, users may be asked for personal details like mobile numbers under the false pretext of winning a fake recharge. Legitimate organizations practice secure protocols for data collection and communication. 

• Sharing for Activation:After the data entry, users are prompted to share a link in other people’s posts; it is said that this will help “activate” recharge. This is a popular trick among swindlers to keep the fraud going on due to sending misleading messages. 

What do we Analyze?

• It is important to note that at this particular point, there has not been any official declaration or a proper confirmation of such offers on any official channel.
• The campaign is hosted on a third party domain instead of any official Government Website, this raised suspicion. Also the domain has been registered in very recent times.

• Domain Name: mahacashhback[.]in
• Registry Domain ID: D1FCF1B5751244310A2FA723B62CE83E9-IN
• Registrar URL: https://publicdomainregistry[.]com/
• Registrar: Endurance Digital Domain Technology LLP
• Registrar IANA ID: 801217
• Updated Date: 2024-01-18T08:09:00Z
• Creation Date: 2023-05-27T12:01:17Z
• Registry Expiry Date: 2024-05-27T12:01:17Z
• Registrant Organization: Sachin Kumar
• Registrant State/Province: Bihar
• Name Server: ns2.suspended-domain[.]com
• Name Server: ns1.suspended-domain[.]com
  

CyberPeace Advisory and Best Practices:

• Verify Authenticity:Authenticate any offers or promotions linked to the Ram Mandir inauguration through official channels. 

• Exercise Caution with Links:Do not engage with questionable URLs, in particular those without secure encryption (HTTPS). Official announcements and initiatives are disseminated through secure outlets.

• Protect Personal Information:Do not provide personal information and do not respond to unsolicited offers on nonofficial platforms. Genuine organizations employ safe and official routes for communication.

• Report Fraudulent Activity:When you see scams or fraudulent activities, immediately report them to authorities and platforms so that no one falls into their trap.

Conclusion:

In the coming days, let us be cautious from such cheating strategies which would be misutilized or create false situations. Individuals should stay informed, verify sources and defend their personal information to ensure a safer world wide web. Official and secure channels are used to communicate authentic initiatives linked with notable events. When an offer sounds too favorable or attractive, exercise due caution and check its genuineness to avoid being defrauded. Thus by undertaking the research we found this campaign to be fake.

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