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Genesys Hack Exposes Customer Data From Internal Systems

  Genesys, a California-based provider of customer experience and call-center technology, has disclosed a cyberattack in which unauthorized ...

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money laundering
California cryptocurrency Cyber Fraud FBI money laundering

Chinese National Extradited to Face Charges in $36.9 Million Cryptocurrency Fraud

 


A 44-year-old Chinese national has been brought to the United States from the Netherlands to answer federal charges tied to a cryptocurrency investment scheme that drained nearly $37 million from 174 American victims.

Zhen Zhao was arraigned in California after his extradition, prosecutors said, following a federal indictment handed down in August 2025 charging him with conspiracy to commit money laundering. If convicted, he faces up to 20 years in federal prison.

Zhao is accused of running what investigators call a "pig butchering" operation, a type of confidence scam that has become one of the fastest-growing financial crimes in the world. The name reflects how the fraud works: operators spend weeks or months cultivating trust with their targets before stealing everything from them at once.


How the scheme worked

According to court documents, Zhao and his co-conspirators reached victims through unsolicited text messages, social media platforms, phone calls, and online dating services. The initial contact was typically low-stakes, a misdirected text, a friendly exchange that seemed accidental, or a casual introduction through a dating app. Over time, the operators steered conversations toward investment opportunities, eventually directing victims to what appeared to be functioning cryptocurrency trading platforms.

The platforms were fabricated. Built to resemble real exchanges, they showed account balances growing steadily over time, giving victims every reason to keep putting money in. When victims eventually tried to withdraw their funds, they were blocked, hit with invented fees, or simply cut off. Their money was already gone.

The ring funneled more than $36.9 million from U.S. bank accounts into an account at Deltec Bank in the Bahamas, registered under the name Axis Digital Limited. From there, the bank was directed to convert the deposited money into Tether, a dollar-pegged stablecoin widely used in fraud for its stability and ease of transfer. That Tether was then moved to a digital asset wallet controlled in Cambodia, where it was passed up to the leaders of scam centers operating in the region.

Cambodia has become a significant hub for this type of operation. Criminal syndicates there have turned large-scale cryptocurrency fraud into core business, often staffing compound facilities with trafficked workers from across Asia who are forced to run these schemes under threat of violence. The money chain in the Zhao case reflects that geography directly.


Eight accomplices, two already sentenced

Zhao was not running the operation alone. Eight co-conspirators have already pleaded guilty in connection with the same scheme. Two have been sentenced so far, one to 51 months and another to 46 months in federal prison. The remaining cases are moving through the courts.

The extradition itself was the result of months of legal coordination between U.S. prosecutors, the State Department, and Dutch authorities. The Netherlands, which maintains a functioning extradition treaty with the United States, processed Zhao's transfer back to face trial in California.


A problem that keeps growing

This case sits inside a much larger crisis. The FBI's 2025 Internet Crime Report recorded more than $8.6 billion in losses from investment scams over the course of a single year, up from $6.5 billion the year before. Those figures came from roughly 73,000 complaints, and investigators routinely note that reported numbers reflect only a portion of real losses, since many victims never file a report out of embarrassment or because they do not know where to turn.

Pig butchering has become the dominant form of cryptocurrency fraud in the United States. The FBI ran a proactive victim notification program that reached more than 4,300 pig butchering victims in a single year, warning people before they lost everything. Despite those efforts, the dollar figures keep climbing.

The Department of Justice has treated these cases as a priority. In December 2023, federal prosecutors in California charged four people with laundering more than $80 million connected to similar cryptocurrency investment scams, using shell companies and hundreds of individual banking transactions to move stolen money internationally. Prosecutors at the time described the mechanics as nearly identical to what Zhao and his network allegedly ran.


What victims should do

Anyone who believes they were targeted by a pig butchering scam can file a report with the FBI's Internet Crime Complaint Center at IC3.gov. Investigators ask that victims preserve all records of communications, platform names, cryptocurrency wallet addresses, transaction IDs, and any banking information they shared during the fraud.

For Zhao, the arraignment in California is the start of what will likely be a long legal process. With eight alleged co-conspirators already pleading guilty, prosecutors appear to have a functioning case built around his network. Whether he opts for trial or takes a similar path remains to be determined.




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Web Hosting
Account Compromise Cyber Security Data protection DreamHost Password Reset DreamHost Security Incident email security FTP Security Hosting Security Web Hosting

DreamHost Forces Password Resets Amid Ongoing Security Incident


Due to a disruption of access to DreamHost's File Manager and webmail services as a result of an incident, certain email and FTP/SFTP accounts were forced to reset their passwords. Although the hosting provider described the action as a precautionary security measure, it has not yet revealed the cause of the incident or confirmed whether any accounts have been accessed without authorization. 

When DreamHost first detected connectivity problems affecting its file manager on the web at files.dreamhost.com on October 23, 2026, the disruption was initially reported. As a consequence, some webmail users experienced login failures, while FTP/SFTP access was also affected by the issue. As a result, the company reset passwords for affected accounts and temporarily restricted access until new credentials could be established. 

When a DreamHost account owner assigns a replacement password to the affected mailbox and file transfer users, the users cannot sign in. By the weekend, DreamHost mailed recovery instructions to all affected account holders in stages and confirmed to all affected account holders that all were notified by October 25. 

In October, the company reported that engineers had deployed a fix and had restored File Manager functionality. Monitoring continued to ensure that the service continued to operate, however password changes for affected accounts continued to be required. Since limited information has been released by the company about the incident, customers have expressed concern. 

Neither DreamHost nor the company has identified the root cause, disclosed the number of accounts affected, or confirmed whether any email messages, stored files, or login credentials have been compromised. Also, the provider advised users to review their mailbox forwarding settings and remove any unfamiliar destinations. This setting can be abused in order to redirect sensitive communications outside a company, thereby making it a crucial element of account security. 

DreamHost has, however, not confirmed that unauthorized forwarding rules have been created in this incident. Additionally, customers have expressed concern about the lack of detailed explanations for the disruptions in service as well as mandatory password changes. Despite speculation about a possible compromise, no publicly available confirmation has been provided to indicate that an attack or data breach has occurred. 

According to DreamHost, account owners should update stored credentials across connected applications and review account settings in order to complete the recovery process. Email clients, FTP/SFTP software, website backup tools, deployment systems and plugins relying on previously stored credentials may be affected by password changes. 

In order to avoid the possibility of affected users losing access to their hosted mailboxes, the company recommends that replacement passwords be shared through private channels, such as telephone calls or secure text messages. The recovery guidance provided by DreamHost specifies that mailbox passwords can be changed under “Mail > Manage Email” in the control panel, and FTP/SFTP credentials can be updated under “Websites > SFTP Users & Files”. 

If you changed your password before the reset process was completed, you should verify that your new password remains valid as well. Password changes may take up to 15 minutes to become effective. There is no indication that incoming email is reaching affected mailboxes, and that FTP/SFTP data is still stored on the provider's servers. 

In addition to these assurances concerning service and data availability, it is also recommended that website owners conduct routine site checks to determine whether unauthorized access occurred prior to the password reset. Considering that FTP/SFTP credentials provide access to website files, it is important to identify suspicious changes by reviewing recently modified files, unfamiliar administrator accounts, and unforeseen scheduled tasks.

There has been no evidence published to indicate that DreamHost-hosted websites were altered as a result of the incident. This episode also underscores the importance of using third-party hosting providers for security reasons. When a hosting company encounters a disruption, several connected services may be affected at once, especially when email addresses and file transfer credentials are handled by the same provider.

In order to ensure that essential operations are resumed after the password change, DreamHost has repeatedly warned customers that it will never send customers passwords by email. Businesses using DreamHost may need to check integrations and automated processes reliant on these accounts. Rather than logging into the control panel through unsolicited messages, account owners should access the control panel directly. 

No public explanation has yet been provided by the company as to what triggered the incident or the number of affected customers has been confirmed. In the interim, a central question remains as to whether the incident involved unauthorized access, how many accounts were affected, and if any customer information was revealed. Despite DreamHost's password reset process and restoration of File Manager access, the broader issues associated with the incident haven't been resolved. 

DreamHost's restoration of File Manager access marks progress in the recovery process, but the absence of an identified root cause leaves the incident's broader security implications unresolved. While the company has yet to clarify the cause of the incident, and whether any customer accounts or data has been accessed, it remains unclear how the incident will impact the security of the company.

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GPT-4
AI Model AI Security AI technology ChatGPT. OpenAI Cyber flaws Cyber Security GPT GPT-4

Researchers Uncover Compaction Smuggling Flaw That Exposes OpenAI Reasoning Traces

 


Researchers at Xint identified a vulnerability in the OpenAI API that could expose hidden reasoning traces from advanced AI models, creating a potential route for large-scale model distillation. The technique, named “compaction smuggling,” bypassed safeguards introduced after earlier research demonstrated methods for extracting encrypted reasoning data. OpenAI confirmed the issue and deployed a fix on October 23, 2026. Xint received a $6,000 bounty for the discovery. 

Reasoning models such as GPT-5.6 Sol generate intermediate reasoning before producing answers. OpenAI does not provide API users with the complete raw reasoning in readable form, instead offering optional summaries. This restriction helps protect against distillation, a process in which developers train smaller models using outputs from more advanced systems. Full reasoning traces can provide particularly useful training data because they contain intermediate steps, incorrect approaches and self-corrections. 

The API stores raw reasoning in encrypted items that clients can return during later interactions but cannot directly decode. OpenAI also encrypts conversation compactions, which condense lengthy exchanges into smaller items while preserving relevant context. The discovery follows an August 2026 study titled Stealing Reasoning Traces from Proprietary LLM APIs. The researchers behind that study demonstrated that encrypted reasoning could be replayed into weaker models from the same provider and reproduced as text. 

The approach affected models from OpenAI, Anthropic and Google, although OpenAI’s safeguards made extraction more difficult. Subsequent protections reportedly stopped the original technique from working. Xint discovered that the compaction feature offered another route. The researchers first generated reasoning using GPT-5.6 Sol and retained its encrypted reasoning item. They then removed the original task from the conversation history and instructed the compaction process to preserve the reasoning verbatim in a JSON object. Replacing spaces with tab characters helped the content evade usage-policy classifiers. 

The resulting encrypted compaction was then submitted to GPT-4.1 and GPT-4o, which were instructed to reproduce the contents exactly. After decoding the JSON and converting tabs back into spaces, the researchers recovered the reasoning trace. The technique worked across all tested reasoning-effort settings, from minimal to maximum. In the demonstration, the original reasoning item contained 405 tokens, compared with 612 tokens in the compaction and 609 tokens in each echoed output. Xint compared outputs from two models using different prompts and obtained identical results. 

Although the original plaintext was unavailable for a definitive token-by-token comparison, the recovered trace retained its false starts, corrections and characteristic writing style. The researchers developed the technique while investigating GhostCompact and examining how encrypted compactions could be transferred between models. The findings raise concerns about large-scale extraction of proprietary AI capabilities. 

In September 2026, U.S. agencies warned about industrial-scale model distillation campaigns. Anthropic subsequently reported seven campaigns attributed to China-based laboratories, while OpenAI disclosed disrupting an effort that generated approximately 16,000 requests from more than 4,000 accounts in July. 

Xint concluded that server-side processes handling decrypted reasoning while accepting client-controlled instructions can become potential extraction pathways. The researchers said compaction features require protections comparable to those applied to raw reasoning traces.
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NFC Relay Attack
Bank fraud Contactless Payments Cyber Crime Dutch Police NFC Relay Attack

Dutch Police Arrest Two Over $400,000 NFC Relay Bank Fraud

 

Dutch police have arrested two men suspected of operating a sophisticated bank-fraud scheme that used NFC relay attacks to steal more than €380,000, approximately $425,600, from 170 victims. The suspects allegedly combined AI-generated robocalls, fake bank employees, and malicious mobile applications to trick people into exposing their contactless debit-card data. The arrests highlight how criminals are adapting near-field communication technology, which is designed for convenient tap-to-pay transactions, into a tool for remote account theft. 

According to Dutch authorities, the scam began with automated calls that used AI-generated audio to impersonate banks, companies, or other trusted organizations. Victims were told that suspicious activity had been detected on their accounts and were asked to press “1” if they were not responsible. Once the victim responded, the call was transferred to a suspect posing as a bank employee, who claimed that the person’s debit card had been blocked and needed verification. 

The fraudsters then instructed victims to download an application and hold their debit card against their phone. Rather than simply verifying the card, the app extracted data from the card’s NFC chip, which supports contactless payments. That information was relayed in real time to an accomplice waiting at an ATM, who used it to withdraw money from the victim’s bank account. This technique is known as an NFC relay attack because it effectively extends the card’s contactless signal across a distance. 

Police arrested a 23-year-old man from Vaassen and a 25-year-old man from Ede on October 6. Investigators believe the younger suspect likely built the technical infrastructure behind the operation and orchestrated the attacks, while the second suspect played a coordinating role. Authorities also took the criminals’ servers offline and seized them, along with phones and laptops believed to be connected to the scheme. Both men remain in custody while the investigation continues. 

The case is a warning that a phone call claiming to be from a bank should never be treated as proof of identity. Genuine banks generally do not ask customers to install unknown apps, scan their cards against a phone, or share one-time codes. Consumers can reduce their risk by hanging up and calling their bank using the number on the official website or card, avoiding app downloads from unsolicited calls, and treating any request to tap a payment card on a phone as a major red flag.
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OpenAI
ai agents Anthropic Claude Code malware OpenAI

AI Coding Agents Can Be Hijacked by a Single Malicious File in Your Downloads Folder

 



A security firm has found that placing a disguised instruction file inside a user's Downloads folder is enough to manipulate AI coding agents into installing malware, with one leading tool executing a known-malicious package in more than nine out of ten test runs.

The finding comes from Forever Security, which said one of its customers had an `AGENTS.md` file sitting in their Downloads folder. The file was designed to look like routine engineering notes, but its actual purpose was to instruct any coding agent that opened the folder to install `function-color`, a package tied to the MALFEX npm supply chain campaign. Forever stopped the agent before the installation completed. The firm could not determine how the file got there.


How the Malware Chain Works

`function-color` is a wrapper package. It carries no payload of its own but silently installs `function-flag` as a dependency. That package runs a postinstall script that downloads a Windows executable from a remote host, saves it as `node.exe` inside `%APPDATA%`, and executes it in the background. The download routine sits inside an empty catch block, so a failed attempt produces no error and leaves no trace in the install log. As of early October, both packages remained installable on npm with no advisory flagging either one.

The reason the attack targets the Downloads folder specifically is not arbitrary. Browsers can save files to that directory without asking the user for permission or even requiring a click. Forever built a proof-of-concept web page that silently dropped a crafted `AGENTS.md` into Downloads during a normal browsing session. The firm did not establish that an attacker used this exact method against its customer, but the capability is real and requires no special access.


Test Results Across Two Major Agents

To measure how reliably the technique works, Forever ran controlled tests against OpenAI's Codex and Anthropic's Claude Code.

For Codex, the planted file instructed the agent to register a new server entry in `~/.codex/config.toml` and install the malicious package. Because that config file applies to every session on the machine, a successful write would persist across projects. Codex followed through in more than 90 percent of the test attempts inside an isolated virtual machine.

Claude Code required a different approach. The planted `CLAUDE.md` was written to resemble internal gateway setup documentation, and its goal was to write a custom API endpoint into the project's `.claude/settings.json` file. If an attacker controls that endpoint, every API call from the agent passes through their infrastructure, along with the session token. The token can then be used to take over the account. Claude Code normally prompts the user to approve writes of that kind, and it frequently rejected requests that looked suspicious. The extended engineering-document framing, however, got the write approved roughly half the time.


Neither Vendor Has a Patch

Forever stated plainly that there is nothing for OpenAI or Anthropic to fix. Each agent was doing what it was built to do: read instruction files in the working directory and carry out the steps listed in them. The firm compared the situation to a browser rendering a phishing page. The browser is not broken; the page is malicious.

That framing shifts the responsibility to users and organizations. Forever's own telemetry adds urgency to that point. About half of its customers run a coding agent from their Downloads folder, and roughly a quarter of agent sessions involve an open browser. In many of those cases, no person is actively watching the session when a new file arrives in the directory.


What to Do

The most direct fix is to stop running coding agents from the Downloads folder entirely. Beyond that, Forever recommends reading any `AGENTS.md` or `CLAUDE.md` file you did not write yourself before running a session, including files that arrive in freshly cloned repositories.

For anyone who suspects a file may have already been processed, the firm advises checking `~/.codex/config.toml` for unrecognized server blocks and reviewing `.claude/settings.json` for API endpoints that were not intentionally set. On Windows machines, the presence of `node.exe` inside `%APPDATA%` is a strong indicator that the function-flag payload ran successfully. If a planted file is confirmed, the session's login token should be treated as compromised and rotated immediately.

Keeping approval prompts enabled and running agents inside sandboxes reduces the attack surface, though the Claude Code test results show that approval prompts alone are not a reliable barrier when the malicious instruction is written to look like legitimate documentation.



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Malicious Apps
2FA bypass Account security Andriod Android Spyware Android spyware protection Cloning Cyber Security Login Credentials Login Security Malicious Apps

uCreator Android Spyware Targets Telegram and WeChat Accounts With Credential Theft and Cloning

 

A commercial Android surveillance toolkit known as uCreator can compromise Telegram accounts by capturing two-factor authentication (2FA) passwords and duplicate WeChat accounts through malicious app modifications, according to security researcher Ovi. The toolkit reaches users through tampered applications distributed outside official app stores or through a container app that allows WeChat to operate within a separate environment. 

The toolkit’s Telegram component shares several technical characteristics with Baohuo, an Android backdoor documented by Doctor Web in October 2025. That investigation estimated that more than 58,000 devices had been infected. Both analyses identified the same code namespace, command-and-control server and command names. 

However, researchers have not established whether the operators behind the two investigations are the same. The malicious applications can execute code under the identity and permissions of the original apps, giving the spyware access to their data and internal functions. Target-specific modules are downloaded after installation, making the initial application package less revealing during security analysis. Ovi identified code supporting around 20 applications, including messaging platforms and mobile financial services, but published detailed technical findings for Telegram and WeChat. 

For Telegram, the spyware can query the application’s message database to extract conversation histories. It also intercepts the login process to capture the user’s 2FA password before the application hashes it. With access to this information, an attacker could reset existing sessions, change the account’s linked phone number or delete the account. Additional functions can conceal an intruder’s session and interfere with the owner’s ability to recover access. 

The WeChat module uses virtualization to run the legitimate application inside the toolkit’s own container. It can extract account identity information, package application data into an archive and upload it, while a bundled script helps reproduce the account. Ovi and fellow researcher Jurre also uncovered backend source code on an exposed GitLab server. The code describes a cloud-based control platform rented by merchants and resellers, with commands assigned to individual customers. 

Its capabilities include capturing login authorizations, collecting contact and profile information, adding friends in bulk and backing up accounts. Scheduling controls establish operating windows and randomized activity limits intended to make the behavior appear more natural and avoid platform security checks. The product is known to its developers as YingGai, and records of the product line date to September 2021. Ovi linked elements of the operation to three companies in China’s Hunan province, although he cautioned that common ownership has not been proven. Some developers appeared to be making changes as recently as October 2026. 

Testing on a Pixel 10 Pro running Android 17 showed that the toolkit’s hooking engine could not locate an internal function it relied on. However, another tool could still intercept application functions, meaning the result does not demonstrate that Android 17 prevents the attack. Potential infection indicators include a file named TgJarPine.dex in some modified Telegram applications and original APK files retained by the LSPatch tool. 

Several associated command and download domains were no longer resolving on October 23, 2026, although the version-upload domain still pointed to an active IP address. Ovi stressed that his findings describe the toolkit’s technical capabilities rather than establish how many people have been affected. The research highlights the risks of installing modified messaging apps from untrusted sources, particularly when they can expose credentials and enable account takeover.
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