cryptonews

Interesting paper:

Abstract: With entrepreneurial fraud cases on the rise, we investigate how entrepreneurs carry out criminal deception, employing deceptive means to defraud audiences. Analyzing court data from Silicon Valley ventures and their founders prosecuted for fraud between 2000 and 2023, our findings reveal that entrepreneurs carry out criminal deception through a process of façading: Entrepreneurs construct, perform, and protect illusory appearances (façades) that externally project high-growth performance to audiences while masking ventures’ actual underperformance. We identify three forms of façading—­surface, reinforced, and deep façading­—that are contingent on the severity of the gap that entrepreneurs face between audiences’ performance expectations and ventures’ performance reality. Our theoretical framework captures how entrepreneurs facing minor, wide, and extreme expectation-reality gaps engage in evermore sophisticated efforts to detach the venture’s externally projected appearance from its actual operational reality. Practically, we propose several approaches to deter and detect criminal deception, including the extension of U.S. Securities and Exchange Commission surveillance and whistleblower program, investor due diligence reform, and dedicated entrepreneurship education interventions that clearly demarcate when entrepreneurs transgress into criminal deception. We make contributions to literatures on cultural entrepreneurship, organizational wrongdoing, and the social effects of entrepreneurship.

The neon flying squid can fly in formation.

The shoal of about 100 squid rose unexpectedly from a patch of the Pacific Ocean around 370 miles from Tokyo and glided near the boat for about 30 metres. The astonished researchers were the first to capture photographs of such a thing, which looked like the early stages of an alien invasion.

They were probably neon flying squid (Ommastrephes bartramii), the subsequent study states, a species that is part of a 20-strong flying squid family that was known to leap from the water but, until then, was only rumoured to also be able to glide above it.

The neon flying squid was able to gain such elevation by using the hyponome, a funnel-like muscular organ also present in other cephalopods, such as octopuses. The organ is able to force water out in a jet, propelling the body along both in and out of the sea. Photographs of the gliding squid show them with their arms (they have 10 limbs in all) splayed outwards.

As usual, you can also use this squid post to talk about the security stories in the news that I haven’t covered.

Blog moderation policy.

This sort of research is both exciting and terrifying:

The two models in question were told to generate complete genomes for a viable bacteriophage—a type of virus able to infect and replicate itself inside bacteria, destroying them from the inside.

Using an existing bacteriophage as an example—ΦX174 (pronounced “fie-ex-1-7-4”), known for its ability to infect and destroy E. coli bacteria—the models generated about 700,000 potential designs, of which the researchers picked 285 that looked most promising.

The researchers then synthesised new DNA molecules using those designs and inserted them into E. coli bacteria, before waiting to see if viable bacteriophages would emerge.

Shortly afterwards, 16 of the Petri dishes in which the bacteria were growing began to show clear spots, as the viruses began to attack and replicate themselves inside the E. coli, demonstrating their viability.

Some of those viable viruses proved more effective at attacking E. coli than the original ΦX174 bacteriophage.

That’s a positive use of a synthetic virus. We can all imagine the negative uses.

The AI Security Institute has a new report of AI systems engaging in “unsanctioned behavior”—what I have been calling “genie behavior—while being tested on their cybersecurity capabilities.

The incident stemmed from a single evaluation where agents were given a task of solving a cyber security challenge. We ran this challenge 122 times across several models. Our investigation found that in 10 of those runs, an AI agent took autonomous, unsanctioned action on the live internet, targeting real people and organisations. In total, we catalogued 19 such actions. Almost all of this behaviour (17 actions) came from a single model, Anthropic’s Mythos 5, with 2 actions involving OpenAI’s GPT-5.6-Sol with cyber classifiers (mechanisms to prevent misuse) disabled. In the most serious case, an agent tried to insert malicious code into an open-source project. In an attempt to get the code approved, the agent engaged in social engineering—creating fake online identities and using them to pressure the project’s maintainer to approve the code. A human maintainer caught and refused to approve the malicious code.

[…]

Below, we highlight the four most significant behaviours observed. A full summary of cases is available in our technical incident report.

1. An attempted supply-chain attack on real open-source software. In the most serious sequence, an agent tried to insert malicious code into a publicly used open-source project and took actions in an attempt to secure approval for this insertion by human reviewers. The agent researched the project’s human maintainers, created multiple fake identities, and used the fake identities to socially engineer a real maintainer into approving the code. When the agent’s pull request was challenged in public, it edited its earlier activity to appear harmless and considered adopting a fresh identity to continue. The agent used Tor to bypass some network restrictions on GitHub, which is what first triggered AISI’s security alert.
2. Attempts to deceive and target real people. As part of the same effort, the agent tried to contact real people directly, sending messages and files through an online file-transfer service to persuade them, or their own AI coding tools, to run malicious code. Some messages carried harmful payloads, and some were attempts at social engineering; targeted at real people—something we’ve never previously observed.
3. Attempts to plant and prompt-inject malicious code. The agent tried to insert malicious instructions where it reasoned that other automated AI systems might pick them up and execute them. Prompt-injections are hidden instructions designed to manipulate AI coding assistants.
4. Collaboration between independent agents being assessed simultaneously. One agent left public messages on GitHub offering collaboration with other agents working on the same challenge. It also provided instructions to reuse accounts and artefacts it had left behind, which were discovered and used by subsequent agents.

What’s especially interesting about this technical report is that, unlike what we’ve been getting from OpenAI and Anthropic, we can see the exact prompt. It’s in Appendix B. And reading it, it seems that the models didn’t break any rules—they found loopholes in the rules. They behaved like a genie.

OpenAI presented details of its AI’s model’s cyberattack on Hugging Face at Black Hat last week. Simon Willison details the timeline. It’s really interesting to read through—and really impressive cyberoffense work.

A usage policy for Flock license plate reader cameras tells police not to talk about the cameras:

When cops use Flock to arrest someone in Wapello County, Iowa, they don’t want them to know. A usage policy for the automated license plate reader cameras in the county tells police, in no uncertain terms, to keep them a secret: “DO NOT MENTION ALPR USAGE TO THE OCCUPANTS OF THE VEHICLE,” the policy document reads. “DO NOT MENTION ALPR USAGE IN YOUR REPORT OR COMPLAINT UNLESS ABSOLUTELY NECESSARY.”

This reminds me of IMSI-catchers (Stingray was the most popular) a couple of decades ago. Police would go to even more extremes to hide their usage.

ICE collected nearly a million DNA samples last year.