Can a new DISA ‘eApp’ help solve the 710,000 security clearance backlog?

Workers with a security clearance are in high demand throughout the US federal government.


The federal government faces a substantial security clearance backlog, so the Defense Information Systems Agency has announced a potential solution.

An electronic application, eApp, will be used to submit background security clearance investigation forms. The application debuted at the Armed Forces Communications and Electronics Association Defensive Cyber Operations Symposium in Baltimore in May.

DISA’s eApp is designed to replace and improve upon the current portal for security clearance check processing, called e-QIP. Using eApp, the subject of the investigation will enter the initial information. DISA said that eApp’s interface will improve user experience through “reworked navigation” and it will include requirements grouped into 10 sections and a section counter to track application progress.

The eApp was announced by the National Background Investigation System Program Office, part of the National Background Investigations Bureau that currently conducts security clearance background investigations.

More than 4 million federal and contract jobs require some level of security clearance and NBIB currently faces more than 710,000 applications waiting to be processed.

In January the Government Accountability Office added security clearance reform to its high-risk list of federal areas in need of reform. “Governmentwide measures for the quality of background investigations have not yet been established, and there have been significant delays in completing some key reform efforts,” a GAO news release said.

In March the Senate Intelligence Committee held a hearing on the issue.

During the Senate hearing in March, NBIB director Charles S. Phalen, Jr. attributed the backlog of security clearance investigations, in part, to the loss of 4,500 investigators with the termination of a contract in 2014 with US Investigation Services, an investigation services company.

The Professional Services Council Foundation — a trade association that advocates for government contractors — has advocated for reform of the security clearance investigation system. In May, PSC formed a security clearance strategic advisory group to assess the federal security clearance process.

DISA said that 1,000 Army users will soon test eApp for usability. A gradual rollout of the app is planned for September or October 2018.







CYBER GEEK RECRUITING: top US Marine says cyber warriors must get more flexibility

Commandant of the Marine Corps Gen. Robert B. Neller
called for a futuristic vision of the service that embraces digital fighting.
(Sgt. Olivia G. Ortiz/Marine Corps)


The Marine Corps (USMC) must be “more flexible” when it comes to retaining cyber warriors, its top officer said, a recognition that the service needs to bolster its recruiting effort for the digital fight.

During a June 12 speech, Marine Corps Commandant Gen. Robert Neller said that cyber fighters may follow a different career trajectory than traditional recruits.

“If you get qualified as a cyber Marine, you ain’t ever leaving, unless you want to. If you want to stay there and do ones and zeros” that’s fine, Neller said.

The recruitment effort laid out during the 69th Current Strategy Forum at the U.S. Naval War College in Newport, R.I. was part of a futuristic vision for the Marines that embraced digital war-fighting. The speech served as a rejection a force that will rely solely on bullets and bombs. Instead, he highlighted a Marine Corps that will also battle in ones and zeroes. He portrayed the Corps as in the middle of a digital battle, “in phase 2.5 against potential countries and adversaries,” an apparent reference to different stages of combat.

“Every infantry squad in the Marine Corps is going to fly their own quad-copter and their own UAV,” Neller said, using an acronym for unmanned aerial vehicles.

It was a strategy speech that at times crossed over into the realm of popular culture. Neller asked listeners to remember the 2018 Winter Olympics opening ceremony that featured more than 500 automated drones flying in unison. Imagine those same drones but armed. “What happens if 500 mini-drones all weaponized come ‘zorching’ out of the sky, what are you going to do to shoot them down?” Neller asked.

Beyond defeating UAV attacks, Neller said that the Corps is “looking at autonomous ways to resupply ourselves. We are looking at pallets that fly.”

He appeared frustrated at the Marine’s acquisition process and acted out a more aggressive negotiation process that he has with defense contractors. When meeting with a vendor selling drones or a piece of equipment that he hopes to stock for the Corps of the future, Neller may ask them if they use 3D printing for their products.

“Oh yeah,” the vendor will typically say, according to Neller.

“Then why aren’t I printing it? Why am I paying you if I can print it?” Neller will respond, pushing the contractor about why their equipment is needlessly expensive. “I’ll pay you for the tech data package. I’ll pay you for the rights because that’s your intellectual property. But I don’t want the parts from you.”

Neller admitted his response does not always sit well with the high-powered defense contractors with dollar signs in their eyes.

“The room gets real quiet,” he said.

The commandant also warned China may soon dominate the South China Sea.

“Sadly, I don’t see us doing a whole lot to contest that. (The Chinese) are out there putting their marbles down, and we’ve got no marbles,” Neller said, an anecdote for how China is gobbling up territory in the ocean. “We’ve got old marbles, but pretty soon there isn’t going to be a place to put down marbles if they don’t start doing something.”





‘Quads for Squads’ grounded over cyber concerns

U.S. Marine Corps 2nd Lt. Michael Francica, with Combat Logistics Battalion 8, Combat Logistics Regiment 2, 2nd Marine Logistics Group, pilots an InstantEye quadcopter during an operations check for Marine Corps Warfighting Laboratory as part of Integrated Training Exercise 3-18 on Marine Corps Air Ground Combat Center, Twentynine Palms, Calif., April. 29. (Lance Cpl. Scott Jenkins/ Marine Corps)


The Corps is being forced to ground commercial drones it has been fielding to infantry units because of a recent Department of Defense policy memo.

The policy memo, released at the end of May and signed by Deputy Secretary of Defense Patrick Shanahan, bans the purchase and use of commercial off-the-shelf, or COTS, drones, citing cybersecurity concerns.

“The DoD Inspector General found that the DoD has not implemented an adequate process to assess cybersecurity risks associated with using commercial-off-the-shelf (COTS) Unmanned Aerial Systems,” the memo reads.

The Corps has been rapidly issuing small Instant Eye quadcopters to every rifle squad as part of a program called ‘Quads for Squads.’

To date, the Corps has given out roughly 600 of the small tactical drones and another 200 are pending, Capt. Pena, a Marine spokesman, told Marine Corps Times.


Lance Cpl. Cesar Salinas, an infantry Marine with 3rd Battalion, 5th Marine Regiment, assists his squad by providing reconnaissance with an Instant Eye at Marine Corps Base Camp Pendleton, California, July 13, 2016. (Marine Corps)


Those drones are now grounded “until the DoD identifies and fields a solution to mitigate known cybersecurity risks,” the memo states.

The Corps plans to submit a waiver “requesting an exemption,” Pena added.

However, Shanahan is the only authority authorized to approve exemptions and any waivers will be reviewed on a “case by case basis, to support urgent needs,” according to the memo.

The recent DoD memo will not interrupt the shipping of the remaining drones, Pena added.

The Commandant of the Marine Corps Gen. Robert B. Neller has been pushing to equip grunts with the small drones to aid in battlefield situational awareness.

And recently, the top Marine cut the size of the Marine rifle squad from 13 to 12 while also adding a new drone systems operator role.

The grounding of the Marine drones was first reported by






Israeli National Cyber Security Authority Outsources: White Hat and White Knight Combat Cyberattacks

This post is also available in: heעברית (Hebrew)


Cyber threats on Israeli companies, organizations, and infrastructure grow daily. The Israeli National Cyber Security Authority has been concentrating its efforts to thwart this threat using sub-contractors, cyber companies that each one deals with the defense of a different critical sector.

One of these companies is White Hat. The company’s CEO, Sharon Nimirovski, says hackers prefer to attack industrial installations through component suppliers and services providers, e.g. accountants and lawyers.

The Tel-Aviv company founded an elite intelligence unit that supplies cybersecurity to private organizations, and in the future to states as well. “Our intelligence center monitors all sorts of threats and in all levels. We operate with this regard as a military elite unit for the prevention of cyberattacks”, said the CEO in an interview to iHLS.

He added that currently, hackers are capable of inflicting damages in property and lives just as armies, using a variety of weapons. “Hackers can nowadays cause various faults to chemical industries which store large quantities of dangerous agents, thus causing widespread disasters.”

According to Nimirovski, Israel has been challenged by various threats due to the situation in the region and the conflicting forces. He said that threats have been growing from week to week, and each time the company’s experts meet new kinds of threats. “This invisible enemy is sophisticated and uses a wide variety of ways for causing damage.”

He added that currently, private companies help the National Cyber Security Authority established by the Israeli government in the detection and prevention of evolving threats. “We were assigned to deal with a certain sector. Of course, I cannot reveal which one, however, this sector has a great potential for damages.”

The company CEO said that sometimes an evolving threat is detected but the problem is that it is not clear when and where it will be executed. “We are dealing with a realm where many things are not immediately clear, so an intelligence array has to be established in order to decrease uncertainty, which might be critical in this case.”

He added that his team detects threats that are already in the “backyard” of the threatened customer. “Through the intelligence operations room, we are capable of alerting the customer that someone is about to attack him through a certain vulnerability.”

All this is executed, according to Nimirovski, by a complete system of attack simulations that expose the customer’s vulnerabilities in each of his online systems.

“We do not sit and wait that something happens in order to learn lessons. Rather, we try to take preventive steps, as attacks in this field might be very painful and cause tremendous damage.”

Currently, White Hat operates a threat detection array called White Knight. This system is active in the social media, detecting threats even at the stage of planning. “The problem is the huge amounts of information. This is why our system is an advanced big data system that knows how to expose the relevant information.”

For the purpose of social media activity, the company operates human intelligence, which is, in fact, technological means that pretend to be human-based intelligence.

“Each of our employees operates such kind-of-human agents that roam around the net trying to detect preliminary signs to a hostile cyber activity.”

He explained that one of the methods frequently employed by hackers is an attack through companies’ subsuppliers. “The suppliers have got the most sensitive information and it is through them that assailants can get to the critical crossroads.”

The company CEO added that “in case of a state-sponsored attack, in most cases, it will be impossible to identify it. The amount of resources invested in it is so great that many resources will be required for hiding it.”







CNO: Bundeswehr-Hacker bereit zum Hackback

Seit Jahren streiten Politiker, ob Deutschland nach einem Hackerangriff auch im Netz zurückschlagen darf. Nach SPIEGEL-Informationen hat die Bundeswehr nun erstmals gemeldet, dass sie dazu in der Lage wäre.

Samstag, 16.06.2018

Die Cybertruppe der Bundeswehr könnte im Fall eines Hackerangriffs auf deutsche Rechner und Netze mit einem sogenannten Hackback zurückschlagen. In einem internen Bericht vom April schreibt das Verteidigungsressort erstmals, die Hacker des gerade erst aufgestellten Zentrums Cyberoperationen seien mittlerweile “in der Lage, aktiv im Cyberraum aufzuklären und zu wirken”.

Der unscheinbare Satz markiert für Kenner eine neue Qualität. So versteckt sich hinter dem schlichten Wort “wirken” im Militär-Deutsch nicht weniger als ein offensiver Angriff, in diesem Fall statt mit Bomben oder Artillerie eben mit Cyberwaffen durch Hacker in Uniform.

Bundeswehr-Hackertruppe soll aufgestockt werden

Bisher hatte die in Grafschaft bei Bonn stationierte Bundeswehreinheit Gegenschläge im Netz – sogenannte Hackbacks – praktisch nur in Planspielen und abgetrennt vom Internet getestet. Ebenso gelang es den Hackern, die bis zum April in der Einheit Computer Network Operations (CNO) agierten, in einem Geiselfall in die Server eines afghanischen Mobilfunkbetreibers einzudringen.


Ob der Bundeswehr echte Gegenschläge – also zum Beispiel das Ausschalten eines Servers, von dem eine Attacke ausgeht – erlaubt werden sollen, wird in der Politik kontrovers diskutiert. Die vorige Bundesregierung hatte das heikle Thema mehrmals im Bundessicherheitsrat erörtert, ein Rechtsgutachten bestellt, die Entscheidung aber am Ende vertagt.

Trotzdem betont das Verteidigungsministerium, wie wichtig die neue Fähigkeit der Bundeswehr ist. Der Ausbau der offensiven Mittel der Cybertruppe, so das als Verschlusssache eingestufte Papier, sei ein “essenzieller Beitrag zur gesamtstaatlichen Sicherheitsvorsorge”, betont das Ministerium. Deshalb soll die Hacker-Truppe nach SPIEGEL-Informationen von knapp 100 auf 300 Mann aufgerüstet werden.

Künftige Bedrohung: Quantencomputer

Das Ministerium warnt in seinem Papier zudem davor, dass der technologische Fortschritt etwa durch Quantencomputing zu “einer neuen, vielleicht sogar kritischen Bedrohungslage” führen könne. Quantencomputer könnten dereinst “sämtliche derzeit üblichen asymmetrischen Kryptoverfahren” zur Verschlüsselung überwinden.

Zwar wird seit Jahren, nicht zuletzt in Europa, an Verschlüsselungsverfahren geforscht, die heutige Algorithmen ersetzen könnten und auch Quantencomputer vor praktisch unlösbare Probleme stellen würden. Die Analysten sparen dennoch nicht mit düsteren Warnungen. Durch die neuen Computer könne eine “fundamentale Bedrohung wesentlicher kritischer Infrastrukturen” entstehen – etwa im Banken-, Bahn- oder Flugverkehr.

Quantencomputer sind beim Lösen bestimmter Probleme erheblich leistungsstärker als herkömmliche Rechner; Prototypen waren 100 Millionen Mal schneller als aktuelle Computer. Die US-Konzerne IBM, Microsoft und Google liefern sich ein Wettrennen in der Entwicklung mit chinesischen Wettbewerbern wie Baidu. Die EU-Kommission legt eine “Quanten-Flaggschiff”-Initiative im Wert von einer Milliarde Euro auf, China baut gerade ein Quantenlabor für zehn Milliarden Dollar.

Eine Studie des Bundesamts für Sicherheit in der Informationstechnik warnt vor der rasanten Entwicklung der Quantencomputer und plädiert für “eine starke nationale Cybersicherheitsbehörde”.






Cyber rules: how information advantage will help win future conflicts

In future conflicts, information will reign supreme. Gone are the days when the winner of a conflict will be the one that brings the most capacity and breaks the most things.

Rather, “future conflicts are probably going to be decided by the side with an information advantage,” US Air Force Brig. Gen. Chance Saltzman, director of current operations, deputy chief of staff for operations, said at the Space Computing Conference hosted by MITRE on June 6.

“It might be the [sides] that find exactly the right thing to break or the exact right pressure point, and that’s going to be about information advantage.”

Underpinning this information advantage is what the US Air Force is calling multidomain command and control. This can be summed up best as independently generating effects across space, air and cyber — not in support of just air operations — to create multiple and continuous dilemmas for adversaries.






No Jamming @ Eurosatory: this French navigation system by Safran doesn’t need GPS

PARIS ― Safran Electronics & Defense unveiled June 12 at the Eurosatory trade show a range of military inertial navigation systems, dubbed Geonyx, aimed at equipping armored vehicles, target acquisition systems and artillery.

The Geonyx INS range is a navigation tool designed to allow operators to find their position and aim weapons, a Safran ED executive told journalists. The system is intended to be highly reliable and independent of GPS, which can be jammed.

Safran ED presented its Geonyx system to the Direction Générale de l’Armement procurement office and the French Army’s Stat equipment assessment department on May 30.

Geonyx could be fitted as a replacement of the Safran Sigma 30, which is fitted on the Nexter Caesar 155mm artillery.

The resonance technology in the new INS range is “extremely disruptive,” the executive said. The Geonyx is smaller, highly reliable and at “a much lower price” than the Sigma 30, he added, however no price details were available.

The three Geonyx models ― SP, HP and XP ― offer a rising level of performance, reflecting a range of operational requirements for an army. The systems are intended to be highly robust to withstand shock from artillery fire. An operational life of 10-15 years is expected, the executive said.

Geonyx draws on technology developed on its Crystal gyroscope, an advanced hemispherical resonator gyroscope. The resonance technology will be applied to equipment for space, air, land and sea, both civil and military, Safran ED said in a statement.

Northrop Grumman has developed its HRG system, which can be deployed in space.






Report: Misconfigured Ethereum Clients Have Resulted in Hack of Around $20 Mln

… and it is a well-known vulnerability – and one without a fix.
(Ever heard of a “mis-configured” Bitcoin / PoW client?
— or the existence of RPC calls able to attack Proof-of-Work?)


About $20 mln worth of Ethereum have reportedly been stolen by a group of hackers, exploiting misconfigured Ethereum clients, according to a Bleeping Computer article published June 11.

The hackers were able access applications using the Ethereum software which configured their interface to expose a Remote Procedure Call (RPC). The RPC interface allows third parties to query, interact with, and retrieve data from the Ethereum-based service, meaning those with access could get private keys, see the owner’s personal information, and even move funds.

While most apps disable this interface by default, and even when it is turned on, it is usually configured to only allow access to apps that are run locally. However, developers do not always keep this configuration and sometimes reconfigure their Ethereum clients without knowing the danger.

The Ethereum project has long known about the potential for exploiting this vulnerability and sent out an official security advisory as a warning to its users back in August 2015, indicating that the likelihood of an attack was low, but its potential severity was high.

According to Bleeping Computer, the Chinese cyber-security firm Qihoo 360 Netlab identified in March that at least one “threat actor” was making mass-scans for exposed Ethereum software with RPC interfaces specifically on port 8545. At the time, 360 Netlab said in a tweet that, “[so] far it has only got 3.96234 Ether [~$2000-$3000] on its account, but hey it is free money!”

On June 11, after reviewing the research again, the team from Netlab said that the scans for port 8545 never stopped, but actually increased as more “threat actors” joined in. The current figure of siphoned Ether is 38,642.7 ($18.1 mln).

At the time of posting, neither the Ethereum team, nor the co-founder Vitalik Buterin responded to a request for comment.






Adblock Plus wants to use blockchain to call out fake news

German eyeo, the company in Cologne behind the popular browser-based ad block product Adblock Plus, is no stranger to controversy. Which is just as well given its new “passion project”: A browser add-on that labels news content as ‘trusted’ or, well, Breitbart.

The beta browser extension, which is called Trusted News (initially it’s just available for Chrome), is intended to help Internet users spot sources of fake news when they’re exposed to content online.

And thus to help people avoid falling for scams or down into political sinkholes — at least without being aware of their inherent bias.

The system, which is currently only available for English language content, “democratically scores the integrity and trustworthiness of online news sources”, as eyeo puts it.

After being added to Chrome, the browser extension displays a small green check mark against its icon if a news source is deemed to be trustworthy.

Or you might see an orange colored ‘B’ — denoting ‘bias’ — as in the below example, for the ‘alt right’ news website Breitbart…



The extension can also deploy flags for untrustworthy, satire (denoted with a little blue smilie), clickbait, user-generated content, malicious or unknown — the latter if the site hasn’t yet been classified.

It’s not clear how many sites have been classified via the system at this stage.

So how is Trusted News classifying sites? In the first instance eyeo says it’s leaning on four third party fact-checking organizations to generate its classifications: PolitiFact, Snopes, Wikipedia and Zimdars’ List.

“For now the way that it works is that you have these sources… and what they will do is essentially give their rating on a particular site and then, basically, if everything isn’t all the same — which they usually are — then you would just go by the [majority],” explains Ben Williams, the company’s director of ecosystems.

But the plan is to evolve this approach using user feedback and — you guessed it — blockchain technology.

eyeo has been working with MetaCert Protocol which runs an anti-fraud URL registry (that’s also headed for the blockchain), to maintain the database for the project.

And that database will be decentralized by moving it to the Ethereum blockchain — with a new protocol and built-in game mechanics to reward submissions. MetaCert tokens will also be issued to track rewards and mitigate the risk of bad actors spoiling the quality of the data.

“What we want to do, and where the blockchain comes in, is we want to move that over to incorporate users’ feedback as well,” says Williams. “So initially what we’re going to do in a few weeks is incorporate something where users can just provide feedback through the extension. And they can dispute something. They can say ‘hey I don’t feel like this site should be listed as biased because whatever’. And we’re going to use that feedback to make the product better.

“And then the next step is to decouple that from any server, and from any third party, and give it directly to the blockchain. So that that feedback can live on its own in that place and so that good feedback can be prized and rewarded among users, and people who are providing bad feedback won’t be. So that is the next step.”

Another future step would be to add more “fine-grained detail” — such as being able to say which way on the political spectrum a biased news source swings, for example.

And also easier ways for people to comment on such ratings. But that’s also yet to come.

Indeed, Williams emphasizes that eyeo is testing the waters at this stage — to see whether the approach will be something web users find useful.

To be clear, it’s also not intending to monetize the extension in any shape or form. (And, for the record, Williams confirms there will be no ‘whitelist’ for bypassing ratings, even before blockchain tech gets involved and decentralizes the project.)

“I want to stress, this is a first, humble attempt — this is a beta — we want to see how this goes. We want people to give us honest feedback on it. And we want to improve upon that. So it’s not merely a matter of where the labels are. But also is this what people want?” he says. “We think it’s a good idea but it is, again, just a start.”

Facebook has its own fake news fighting efforts now, of course, but clearly those only apply to content within its walled garden. If you want to fight fakes on the Internet as a whole the browser is the best place to do it, reckons Williams.

“There is a different between the entire Internet and Facebook. Facebook is a way to access certain things on the web and I appreciate the fact that in certain places it’s the only way, unfortunately, that people can reach the web but the web is a very vast place,” he says.

“Most people reach it through the web browsers, so being in that web browser allows users to have that sort of protection and understanding wherever they go on the web. Facebook included.”

On the privacy front, eyeo says that the Trusted News extension updates its own internal database each day so that users’ browsing activity “never touches a central server”.

Support for other browsers is planned, assuming the extension finds fans. It looks pretty safe to assume it’s not going to be popular with certain sections on the far right of the political spectrum.

Though, while Breitbart and the Daily Mail are labeled ‘biased’, Fox News and The Sun, for example, do get a trustworthy tick. Also ‘trusted’ by Trusted News’ current rating system: President Donald Trump’s favorite media target for labeling as ‘fake news’, CNN; and RT (formerly known as Russia Today), one of the Russian state-backed media organizations Twitter banned from its ad platform last year for attempting to interfere in the 2016 US elections…

“In weeks to months or so we should definitely be able to move everything over to the blockchain so it’s all not too far away. I think that the bigger question down the line for us — not months, but maybe a year or so — is if there is demand. If people like it. Again. If people are happy with the beta product then how do we or should we move to mobile? That would be the next really big question,” adds Williams.







Circle CEO Jeremy Allaire at MoneyConf Dublin: ‘We Are at the Beginning of Tokenization of Everything’

Jeremy Allaire, Co-Founder & CEO of payments company Circle spoke this morning of an unprecedented “crypto-revolution,” saying that global society is “at the beginning of a tokenization of everything.”

Just as the early internet transformed data and communications, blockchain is now poised to revolutionize “every aspect of finance” and “reinvent public and civil services in [its] image”:

“Once you have an open global immutable record-keeping system, [a] transaction-processing system and [a] secure computing environment, you can re-conceptualize on a global basis every aspect of finance… corporate and commercial law, the intermediation of contracts, [and] crucially all of the systems we use in [both corporate and civic] decision making.”

The CEO outlined a vision of a tokenized global economy and society, in which “every form of value storage and public record becomes a crypto-token” that has free-floating market value and can be traded on global digital exchanges.

With crypto-assets, he said, you can “tokenize your house, car or art,” and establish open global financial relationships around any physical property.

The “tokenization of private or public votes in all forms of social governance” would offer an immutable system that is more transparent and accountable than current models.

Allaire outlined five categories of crypto-assets, beginning with privacy-focused cryptocurrencies that remove financial activities from the centralized control of governments and serve as “a public good” on the internet.

So-called ‘crypto-securities’ can function to represent rule-based financial contracts and have a potential that goes “far beyond” a paper contract mediated by a law firm in court. He emphasized that lot of initial coin offerings (ICOs) come under this category.

He then addressed crypto-assets that support transaction settlement systems, such as Ripple (XRP) and Stellar (XLM), as well as very ambitious” blockchain-based platforms such as Ethereum (ETH), which he characterized as “operating systems for the global economy.”

Allaire’s last category of crypto-assets were fiat-backed stable coins, designed for denominating financial contracts. Allaire emphasized their potential for use cases that require a less volatile price baseline, but still seek the decentralization and security of blockchain.

Just last month, Circle closed a $110 mln fundraising round led by mining hardware manufacturer Bitmain to partner on the development of a US dollar-backed stable coin. Circle’s USDC will be an ERC-20 token based on the Ethereum network, and will reportedly be released by Circle in the summer. The investment brought Circle’s valuation to nearly $3 bln, an almost sixfold increase since 2016.




Crypto and fintech conference MoneyConf in Dublin, Ireland continues today, June 13th, with a live-stream from Cointelegraph available to watch here.




Blockchain Is ‘Revolutionary,’ Says German Finance Regulator BaFin Chief

Felix Hufeld, chief of Germany’s financial watchdog BaFin, has said blockchain technology is “revolutionary” and its applications could turn the entire financial sector “upside down.”

Hufeld, who is president of the German Financial Supervisory Authority (BaFin), made the remarks during a speech at an event in Berlin last week in which he described the regulator’s thinking on bitcoin and blockchain.

Despite the current hype, “if not a bubble,” around the bitcoin price and the boom of initial coin offerings (ICOs), he said, blockchain’s ability to power distributed applications “could actually be revolutionary.”

He continued:

“These apps are not only safe from failures of individual computers or providers, they also promote the development of a ‘blockchain economy.’ “

Further, the BaFin head said blockchain applications have promise in areas that lack “an effective control mechanisms or trustworthy institutions” such as in foreign trade or development aid.

The speech follows remarks by Hufeld in April, in which he stated that he does not want to “kill innovation” in blockchain, though his agency is beefing up efforts to regulate cryptocurrency trading over money-laundering concerns, according to a report at the time.

BaFin also issued new guidelines in February outlining how and when it would consider tokens issued during ICOs to be securities, saying it would take a case-by-case approach in determining the legal status of individual tokens.





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