Friday Squid Blogging: The Chinese Squid-Fishing Fleet off the Argentine Coast
The latest article on this topic.
As usual, you can also use this squid post to talk about the security stories in the news that I haven’t covered.
Entries Tagged "China"
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Telegram Hosting World’s Largest Darknet Market
Wired is reporting on Chinese darknet markets on Telegram.
The ecosystem of marketplaces for Chinese-speaking crypto scammers hosted on the messaging service Telegram have now grown to be bigger than ever before, according to a new analysis from the crypto tracing firm Elliptic. Despite a brief drop after Telegram banned two of the biggest such markets in early 2025, the two current top markets, known as Tudou Guarantee and Xinbi Guarantee, are together enabling close to $2 billion a month in money-laundering transactions, sales of scam tools like stolen data, fake investment websites, and AI deepfake tools, as well as other black market services as varied as pregnancy surrogacy and teen prostitution.
The crypto romance and investment scams regrettably known as “pig butchering”—carried out largely from compounds in Southeast Asia staffed with thousands of human trafficking victims—have grown to become the world’s most lucrative form of cybercrime. They pull in around $10 billion annually from US victims alone, according to the FBI. By selling money-laundering services and other scam-related offerings to those operations, markets like Tudou Guarantee and Xinbi Guarantee have grown in parallel to an immense scale.
Using AI-Generated Images to Get Refunds
Scammers are generating images of broken merchandise in order to apply for refunds.
Chinese Surveillance and AI
New report: “The Party’s AI: How China’s New AI Systems are Reshaping Human Rights.” From a summary article:
China is already the world’s largest exporter of AI powered surveillance technology; new surveillance technologies and platforms developed in China are also not likely to simply stay there. By exposing the full scope of China’s AI driven control apparatus, this report presents clear, evidence based insights for policymakers, civil society, the media and technology companies seeking to counter the rise of AI enabled repression and human rights violations, and China’s growing efforts to project that repression beyond its borders.
The report focuses on four areas where the CCP has expanded its use of advanced AI systems most rapidly between 2023 and 2025: multimodal censorship of politically sensitive images; AI’s integration into the criminal justice pipeline; the industrialisation of online information control; and the use of AI enabled platforms by Chinese companies operating abroad. Examined together, those cases show how new AI capabilities are being embedded across domains that strengthen the CCP’s ability to shape information, behaviour and economic outcomes at home and overseas.
Because China’s AI ecosystem is evolving rapidly and unevenly across sectors, we have focused on domains where significant changes took place between 2023 and 2025, where new evidence became available, or where human rights risks accelerated. Those areas do not represent the full range of AI applications in China but are the most revealing of how the CCP is integrating AI technologies into its political control apparatus.
News article.
Huawei and Chinese Surveillance
This quote is from House of Huawei: The Secret History of China’s Most Powerful Company.
Long before anyone had heard of Ren Zhengfei or Huawei, Wan Runnan had been China’s star entrepreneur in the 1980s, with his company, the Stone Group, touted as “China’s IBM.” Wan had believed that economic change could lead to political change. He had thrown his support behind the pro-democracy protesters in 1989. As a result, he had to flee to France, with an arrest warrant hanging over his head. He was never able to return home. Now, decades later and in failing health in Paris, Wan recalled something that had happened one day in the late 1980s, when he was still living in Beijing.
Local officials had invited him to dinner.
This was unusual. He was usually the one to invite officials to dine, so as to curry favor with the show of hospitality. Over the meal, the officials told Wan that the Ministry of State Security was going to send agents to work undercover at his company in positions dealing with international relations. The officials cast the move to embed these minders as an act of protection for Wan and the company’s other executives, a security measure that would keep them from stumbling into unseen risks in their dealings with foreigners. “You have a lot of international business, which raises security issues for you. There are situations that you don’t understand,” Wan recalled the officials telling him. “They said, ‘We are sending some people over. You can just treat them like regular employees.’”
Wan said he knew that around this time, state intelligence also contacted other tech companies in Beijing with the same request. He couldn’t say what the situation was for Huawei, which was still a little startup far to the south in Shenzhen, not yet on anyone’s radar. But Wan said he didn’t believe that Huawei would have been able to escape similar demands. “That is a certainty,” he said.
“Telecommunications is an industry that has to do with keeping control of a nation’s lifeline…and actually in any system of communications, there’s a back-end platform that could be used for eavesdropping.”
It was a rare moment of an executive lifting the cone of silence surrounding the MSS’s relationship with China’s high-tech industry. It was rare, in fact, in any country. Around the world, such spying operations rank among governments’ closest-held secrets. When Edward Snowden had exposed the NSA’s operations abroad, he’d ended up in exile in Russia. Wan, too, might have risked arrest had he still been living in China.
Scam USPS and E-Z Pass Texts and Websites
Google has filed a complaint in court that details the scam:
In a complaint filed Wednesday, the tech giant accused “a cybercriminal group in China” of selling “phishing for dummies” kits. The kits help unsavvy fraudsters easily “execute a large-scale phishing campaign,” tricking hordes of unsuspecting people into “disclosing sensitive information like passwords, credit card numbers, or banking information, often by impersonating well-known brands, government agencies, or even people the victim knows.”
These branded “Lighthouse” kits offer two versions of software, depending on whether bad actors want to launch SMS and e-commerce scams. “Members may subscribe to weekly, monthly, seasonal, annual, or permanent licenses,” Google alleged. Kits include “hundreds of templates for fake websites, domain set-up tools for those fake websites, and other features designed to dupe victims into believing they are entering sensitive information on a legitimate website.”
Google’s filing said the scams often begin with a text claiming that a toll fee is overdue or a small fee must be paid to redeliver a package. Other times they appear as ads—sometimes even Google ads, until Google detected and suspended accounts—luring victims by mimicking popular brands. Anyone who clicks will be redirected to a website to input sensitive information; the sites often claim to accept payments from trusted wallets like Google Pay.
Social Engineering People’s Credit Card Details
Good Wall Street Journal article on criminal gangs that scam people out of their credit card information:
Your highway toll payment is now past due, one text warns. You have U.S. Postal Service fees to pay, another threatens. You owe the New York City Department of Finance for unpaid traffic violations.
The texts are ploys to get unsuspecting victims to fork over their credit-card details. The gangs behind the scams take advantage of this information to buy iPhones, gift cards, clothing and cosmetics.
Criminal organizations operating out of China, which investigators blame for the toll and postage messages, have used them to make more than $1 billion over the last three years, according to the Department of Homeland Security.
[…]
Making the fraud possible: an ingenious trick allowing criminals to install stolen card numbers in Google and Apple Wallets in Asia, then share the cards with the people in the U.S. making purchases half a world away.
Details About Chinese Surveillance and Propaganda Companies
Details from leaked documents:
While people often look at China’s Great Firewall as a single, all-powerful government system unique to China, the actual process of developing and maintaining it works the same way as surveillance technology in the West. Geedge collaborates with academic institutions on research and development, adapts its business strategy to fit different clients’ needs, and even repurposes leftover infrastructure from its competitors.
[…]
The parallels with the West are hard to miss. A number of American surveillance and propaganda firms also started as academic projects before they were spun out into startups and grew by chasing government contracts. The difference is that in China, these companies operate with far less transparency. Their work comes to light only when a trove of documents slips onto the internet.
[…]
It is tempting to think of the Great Firewall or Chinese propaganda as the outcome of a top-down master plan that only the Chinese Communist Party could pull off. But these leaks suggest a more complicated reality. Censorship and propaganda efforts must be marketed, financed, and maintained. They are shaped by the logic of corporate quarterly financial targets and competitive bids as much as by ideology—except the customers are governments, and the products can control or shape entire societies.
More information about one of the two leaks.
China Accuses Nvidia of Putting Backdoors into Their Chips
The government of China has accused Nvidia of inserting a backdoor into their H20 chips:
China’s cyber regulator on Thursday said it had held a meeting with Nvidia over what it called “serious security issues” with the company’s artificial intelligence chips. It said US AI experts had “revealed that Nvidia’s computing chips have location tracking and can remotely shut down the technology.”
Another Supply Chain Vulnerability
ProPublica is reporting:
Microsoft is using engineers in China to help maintain the Defense Department’s computer systems—with minimal supervision by U.S. personnel—leaving some of the nation’s most sensitive data vulnerable to hacking from its leading cyber adversary, a ProPublica investigation has found.
The arrangement, which was critical to Microsoft winning the federal government’s cloud computing business a decade ago, relies on U.S. citizens with security clearances to oversee the work and serve as a barrier against espionage and sabotage.
But these workers, known as “digital escorts,” often lack the technical expertise to police foreign engineers with far more advanced skills, ProPublica found. Some are former military personnel with little coding experience who are paid barely more than minimum wage for the work.
This sounds bad, but it’s the way the digital world works. Everything we do is international, deeply international. Making anything US-only is hard, and often infeasible.
EDITED TO ADD: Microsoft has stopped the practice.
Sidebar photo of Bruce Schneier by Joe MacInnis.