FT : Four Russian government employees charged with hacks targeting energy secto

Four Russian government employees charged with hacks targeting energy sector
US indictments for past attacks come as Washington warns companies of cyber threats amid Ukraine invasion

The US Department of Justice has charged four Russian government workers in connection with hacking campaigns that targeted the global energy sector as Washington warns companies to be on high alert for potential cyber attacks amid Moscow’s invasion of Ukraine.

The criminal charges unsealed Thursday allege the four Russian nationals were “attempting, supporting and conducting” cyber attacks that targeted hundreds of companies in the energy sector across more than 135 countries, including some from which Moscow had sought economic, military and security assistance.

While the crimes allegedly occurred between 2012 and 2018, DoJ and FBI officials said they provided examples of activities that US agencies fear could happen again as Russia tries to undermine western countries’ support of Ukraine.

“The conduct alleged in these charges is the kind of conduct that we are concerned about under the current circumstances and has been addressed by various parts of the federal government, including the president himself,” said a senior DoJ official. “These charges show the dark art of the possible when it comes to critical infrastructure.”

Joe Biden, president, on Monday had warned a Russian cyber attack on the US is coming and told members of the Business Roundtable, a large corporate lobbying organisation, it was their “patriotic obligation” to strengthen their digital defences.

“Although the criminal charges unsealed today reflect past activity, they make crystal clear the urgent ongoing need for American businesses to harden their defences and remain vigilant,” Lisa Monaco, deputy US attorney-general, said in a statement on Thursday.

A senior FBI official said: “For weeks now, we’ve been asking US businesses and critical infrastructure owners to have an incredibly low threshold for reporting any unusual activity”.

In one of the two cases unsealed on Thursday, Evgeny Viktorovich Gladkikh, a computer programmer working for a Russian defence ministry research institute, and others were accused of conspiring to hack the systems of a refinery abroad, leading twice to an emergency shutdown.

The 2017 attack sought to cause “physical damage” and have the refinery operate in an unsafe manner while appearing to function ordinarily, the DoJ alleged.

The following year, the defendants allegedly sought, and failed, to attack similar refineries in the US, authorities said.

In the second case, Pavel Aleksandrovich Akulov, Mikhail Mikhailovich Gavrilov and Marat Valeryevich Tyukov — officers at Russia’s Federal Security Service — and others allegedly targeted oil and gas companies, nuclear power plants as well as utility and power transmission businesses with a supply chain attack between 2012 and 2014. They were accused of installing malware on more than 17,000 devices in the US and abroad.

They also allegedly launched spearphishing attacks between 2014 and 2017 against more than 500 companies in the US and abroad as well as US government agencies including the Nuclear Regulatory Commission. One successful attack involved the Wolf Creek Nuclear Operating Corporation, which operates a nuclear power plant in Kansas.

John Hultquist, vice-president of intelligence analysis at cyber security company Mandiant, called the indictments a “warning shot” intended for Russian groups carrying out “disruptive cyber attacks”.

“These actions are personal and are meant to signal to anyone working for these programmes that they won’t be able to leave Russia any time soon,” he added.

All four defendants remain at large. The Russian embassy in Washington did not immediately respond to a request for comment.

>>> US After Hours Summary: Pretty quiet after hours; HNST -18.9%, SMRT -16.4% f

After Hours Summary: Pretty quiet after hours; HNST -18.9%, SMRT -16.4% fall on earnings; RKLB -2.9% lowers Q1 rev guidance due to weather-related launch delay

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SGHT +3.9% (also announces treatment of first patient in TRIDENT trial), JOBY +1.9%, MCW +1.3%

Companies trading higher in after hours in reaction to news: TWI +2.5% (TWI and CNHI enter into long-term supply agreement), NVCR +0.9% (presents updated results from Phase 2 2-THE-TOP trial), KBR +0.2% (to collaborate with ExxonMobil on propane dehydrogenation technology), NFLX +0.2% (adds game development studio Boss Fight Entertainment to co)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: HNST -18.9%, SMRT -16.4% (also acquires SightPlan for $135 mln), ONL -8.8%, RKLB -2.9% (lowers Q1 rev guidance due to weather-related launch delay), MAXN -2.3%, AMPS -1.3%

Companies trading lower in after hours in reaction to news: MEIP -45.2% (MEIP and Kyowa Kirin provide regulatory update on zandelisib; FDA discourages filing based on Phase 2 TIDAL study data), PRPL -7.7% (announces $65 mln stock offering), GTES -4.5% (stock offering), SEIC -2.1% (HSBC Private Bank terminates one of its agreements), CHK -1.7% (stock offering), ASAN -1.2% (files mixed securities shelf offering), ABT -0.4% (awarded $1.02 bln Army contract)

NYP : Russia will likely default with April 4 payment due of $2.2B: experts

Russia will likely default with April 4 payment due of $2.2B: experts

Investors breathed a sigh of relief last week after the Russian government made a $117 million interest payment on its foreign debt. But a much bigger payment comes due April 4 — to the tune of $2.2 billion — and creditors are far less optimistic Russia will pony up this time.

“The last payment was a small investment in credibility, but when Russia has to start writing billion dollar checks it’s a different calculation,” Jay Newman, former Elliott Management portfolio manager and author of “Undermoney,” told The Post. “I don’t think it’s realistic that Russia comes up with the $2.2 billion.

The bond payment last week panicked investors because it was unclear whether Russia’s central bank would be able to able to use its frozen reserve of US dollars to make the payment — and whether US banks would work with the country to transfer the money. There was also a dispute about whether Russia could pay the debt in its own currency. The Russian Finance Ministry insisted the country could pay in rubles but people with knowledge of the contract say it’s required to be paid in dollars.

For some smaller installment payments Russia is allowed to pay in rubles. But for the previous payments of $117 million and the upcoming payment of $2.2 billion, the terms mandate Russia must pay in US dollars.

Russia came through last time. But debt experts take a grim view of what comes next. These people tell The Post they don’t think Russia’s ability and willingness to service its previous debt obligation means anything when it comes to the future — especially because Russia faces nearly $4.8 billion in debt payments this year.

And April 4 will be the first big test: “Two billion is real money,” Newman warns.

The Treasury Department clarified Russia can use frozen funds to make debt payments until May 25. After that, the country likely needs to scrape up the money from other sources — borrowing cash or selling oil to countries like China or India.

“If they’re making payments with funds they can’t access otherwise, it’s basically funny money,” said Newman, who spent 15 years recovering $2.4 billion in debt from Argentina after it defaulted. “But once they have to scrape cash together and choose to pay bonds over buying guns and food, that’s a harder decision.”

And it’s not just an economic issue. Even if Russia is able to make another payment, some experts worry Russia may simply refuse.

Newman argues the harsh sanctions imposed by the US may backfire — and that removing Russia’s ability to access markets and global trade eliminates the country’s motivation to keep paying debt.

“If Russia is cut off form the rest of the world, you have to doubt they’ll keep paying,” Newman said. “It’s unusual for a country under increasing and persistent economic sanctions to keep up payments — these sanctions have unintended consequences.”

Newman is not alone in his belief that Russia may fail to make the multibillion payment in April.

“I expect a full default of Russian debt,” Robert Kahn of political risk consulting firm Eurasia Group told The Post. “It’s a political — not just economic — issue. Why do they want to pay us back when we’re extraditing them from the economic system?”

While Russia owes US banks almost $15 billion, economists don’t expect a default on debt would significantly tank global markets over the long-term. According to the International Monetary Fund, Russia’s relative isolation from the rest of the world makes it “not systemically relevant.”

Still, the conflict — and continued fallout — has already hurt the global economy.

The Organization for Economic Cooperation and Development estimates the conflict will decrease global growth by a percentage point and increase inflation by more than two percentage points. Other economic experts say the war has increased the likelihood of a U.S. recession from 10% to 35% over the next year.

FT : Two US billionaire-led bids lead £3bn race to buy Chelsea FC

Two US billionaire-led bids lead £3bn race to buy Chelsea FC
LA Dodgers owner Todd Boehly and private equity tycoons Josh Harris and David Blitzer become frontrunners

Two bids backed by US billionaires have become the frontrunners to win the £3bn race to purchase Chelsea football club, which is rushing to replace its Russian oligarch owner Roman Abramovich who has been hit with sanctions.

The preferred bids are from an investor group led by Todd Boehly, the financier and owner of baseball’s Los Angeles Dodgers, and another led by Josh Harris and David Blitzer, the private equity billionaires who own sport teams including basketball’s Philadelphia 76ers, according to people with knowledge of the matter.

On Thursday, other bidders including Saudi Media Group were informed that they had been eliminated from the process, they said.

The unique circumstances of Chelsea’s sale have garnered strong interest for what is seen as a rare trophy asset in football’s most lucrative domestic division, the Premier League. The auction process for the club based in west London, England, is being managed by US merchant bank Raine Group.

Bids are being assessed based on a complicated set of criteria, including how much of the offer will be delivered to charity and how much funding will be available to invest in Chelsea and its stadium, those with knowledge of the matter said. The record of bidders in managing high-profile assets is also being assessed.

The frontrunners in the contest sought to distinguish their offers not only in terms of price but also by collaborating with members of the British establishment.

Boehly’s group has the backing of Daniel Finkelstein, a Conservative party peer and columnist for The Times newspaper in London, while Harris and Blitzer turned to City grandee Sir Martin Broughton and Sebastian Coe, World Athletics president.

California-based investment firm Clearlake Capital, which has more than $60bn in assets under management, is providing financial backing for Boehly’s bid. The Boehly group also has support from Goldman Sachs. 

The bid from Saudi Media Group was not competitive and relied heavily on debt financing, an unattractive prospect for the club, one person with knowledge of the situation said.

Bids from British property developer Nick Candy, who was working on a behalf of an investor consortium, and London-based investment manager Centricus are also not expected to progress.

An offer from the Ricketts family, which owns the Chicago Cubs baseball team, was weakened by renewed scrutiny of leaked correspondence in which the family’s patriarch wrote that Muslims are the “enemy”. The Ricketts bid has financial backing from US hedge fund billionaire Ken Griffin.

The Ricketts family has stressed that “racism and Islamophobia have no place whatsoever in our society” after Chelsea fans criticised Joe Ricketts, founder of brokerage TD Ameritrade, for the comments in the leaked emails.

The level of interest in Chelsea underlines the growth of the Premier League, Europe’s top football division by revenue and global reach, in America, where the value of its broadcast rights soared in the latest tender.

Chelsea has won every major honour in football under Abramovich, who bought the club in 2003 and broke Manchester United’s domestic dominance by spending millions on buying star players and paying their multimillion-pound salaries.

The club won last season’s Uefa Champions League, the most prestigious club tournament in Europe, and the Fifa club world cup.

Abramovich is selling the club as a result of Vladimir Putin’s invasion of Ukraine, which has forced the sport industry to confront its ties with Russia and oligarchs accused of being close to the Kremlin.

However, the UK’s decision to sanction Abramovich and freeze his assets has added complexity to the sale, which will require special approval from the UK government.

Ministers are adamant that Abramovich, who has pledged to donate the net proceeds of any sale to charity, must not benefit from the transaction. He has also said that he plans to forgive the £1.5bn debt owed to him by Fordstam, the entity through which he owns Chelsea.

Chelsea’s revenue totalled £434mn in the year ended June 2021, up from £407mn a year earlier, bolstered by winning the Champions League.

Despite sanctions, Chelsea is able to play matches because of a licence granted to the club to prevent wider disruption to the Premier League, one of the UK’s biggest cultural exports.

The government amended Chelsea’s licence on Wednesday to allow Abramovich’s Fordstam entity to inject up to £30mn into the club to “resolve any cash flow or liquidity issues”.

If their bid group is successful, Harris and Blitzer will probably be forced to sell their minority shareholding in Crystal Palace, a rival Premier League club which is based in south London.

CB : Debt Financing Could Heat Up As Venture Capital Slows

Debt Financing Could Heat Up As Venture Capital Slows

t’s much too soon to proclaim the demise of venture capital raises as the market seems to be in the midst of an adjustment, but debt financing seems to be popping up in the news more.

Earlier this week, corporate card and expense automation startup Ramp announced a $750 million raise at $8.1 billion—$550 million of which was debt financing backed by Citi and Goldman Sachs. Earlier this month, banking service provider Mercury announced it will launch its own venture debt offering—looking to lend more than $200 million this year and up to $1 billion over the next two years—following other fintech brethren like Brex into the debt offering realm.

Those headlines are against a backdrop of what many see as a slowdown in startup funding as geopolitical issues, public market tumult and a lingering pandemic has brought uncertainty to the market. Investors have told Crunchbase valuations are off about 20 percent or more for many startups from late last year.

That type of decrease may explain why those in debt say things are getting busy.

“Are the conversations changing? Yes, over the last month or so,” said Dan Allred, senior market manager at Silicon Valley Bank. “The equity markets are choppy.”

What is it?
Venture debt can be defined differently even by those in the industry. Traditionally, venture debt has referred to debt a VC-backed company raised—usually in unison with raising equity—to both elongate its runway and cut down on dilution.

The debt—often less structured and with less financial covenants than other forms of debt—is used for traditional growth purposes and is often lent based on the startup’s investors and/or where the company is in its growth.

Now, with the rise of fintech companies, different kinds of asset-backed debt like “warehouse financing” have become popular. That type of debt can be secured by assets and loans those companies generate—something a typical SaaS company may lack. The debt Ramp raised has been this type.

However, all debt has the similarity of giving companies cash they may need while not diluting the stakes of founders and shareholders. And while venture debt—if raised in conjunction with equity—may not prevent a “down round” in this environment, it can lessen the amount of more expensive venture capital needed and also lower dilution.

“Obviously, the last couple of months has evolved the conversation around venture debt,” said Benjamin Wu, CEO of Brex Asset Management, which launched the company’s venture debt product last August. “But more broadly, this is something that has been around for decades … it’s a product people are better understanding.”

A fit for this market
Brex currently lends anywhere between a couple of millions of dollars and $15 million, and rates can range—depending on the company—from 4 percent to around 10 percent. Despite being in the market for less than a year, Wu said Brex’s venture debt product is nearing the $800 million mark in terms of lending to a broad array of companies from SaaS to e-commerce.

With the current state of the market, he expects that lending pace to continue.

“With the market volatility … there is strong inbound interest,” he said.

David Spreng, chairman and CEO of Runway Growth Capital, also called deal flow strong so far this year. Runway will lend to companies with no venture backing but normally looks for late-stage clients with $75 million or more in revenue.

With the current slowdown in the growth-stage rounds in venture capital, Spreng said he has no doubt debt will have a strong year.

“VCs have a lot of dry powder, but they are focusing on their ‘big winners,’” he said. “So a lot of companies may get orphaned.

“I expect a record year,” he added.

We’ve been here before
This isn’t the first time the market has faced uncertainty and interest in debt has increased.

Allred said venture debt saw significant growth in 2008 as the global financial crisis took hold. Much more recently, venture debt became very popular in March 2020 as the COVID-19 pandemic started. While it wasn’t so much companies raising debt, more startups started to use their credit facilities then as they were eager to hold on to cash and shore up their balance sheets.

“As equity capital becomes more expensive, interest in debt goes up,” Allred said.

With rising interest rates and markets that can look unstable at times, it is fair to wonder if, like equity, debt will also dry up.

“It’s true credit markets tighten when equity markets tighten,” Allred said. “But in general, debt capital … remains more open.”

While the framework around venture debt can differ—from no covenants to facilities that are more structured—it can be a viable option not just for startups looking to weather a storm but also extend their runway and the money they’ve raised.

“It’s always been a good tool against expensive equity,” he said. “It can prolong the life of that expensive equity.”

(ZH) Goldman Now Expects Yield Curve To Invert Next Quarter, Sees Inversion Last

Goldman Now Expects Yield Curve To Invert Next Quarter, Sees Inversion Lasting Three Years

Yesterday, in our discussion of the "battle of the yield curves", where we made it clear only the 2s10s matters due to its infallible recessionary signaling, we pointed out that while on average it takes 12-18 months from inversion to recession during a Fed hiking cycle...
... not only has the Fed never before started a rate hiking cycle when inflation was already 7.9% (suggesting that the onset of a recession will be much faster than usual this time), but that the debate over a yield curve inversion (and thus recession) was already moot, as the 2Y forward 2s10s had inverted and on Thursday the inversion accelerated taking out the inversion lows hit in 2006 ahead of the global financial crisis.
The only question at this point is when the inversion will take place, and begin the official countdown to a recession which BofA CIO Michael Hartnett believes will start some time in the second half.
Well, moments ago we got an answer from Goldman Sachs, which this afternoon - just hours after we showed that the forward 2s10s had already inverted, updated its forecasts for US Treasury yields across the curve "to reflect more broad-based and persistent price pressures and the accompanying hawkish Fed pivot."
As a result, Goldman now sees the 10y UST yields ending the year at 2.7%, up from its prior projection of 2.25% (the bank notes that risks to its forecast are two-sided: on one hand "a deescalation of the war in Ukraine or more persistent inflation could mean even higher realized levels", whereas the opposite could result in lower levels).
Goldman's forecast revisions at the front end far larger: the 2y forecasts for YE22 and YE23 are 2.9% and 3.15%; while the former is only about 20bp above current forwards, the latter is roughly 50bp higher, reflecting Goldman's higher terminal rate assumption... which incidentally are dead wrong because as we showed recently, the terminal rate (dashed line below) continues to slide as a result of record-er debt and shrinking output and productivity.
Its woefully wrong terminal rate assumptions aside, the bank also expects that longer maturities will increase more gradually given the bank's expectations for strong demand from liability-driven investors. As such, the vampire squid now expects the 30y yields to end the year at 2.75%.
To summarize yet another bafflingly clueless Goldman forecast, the bank now expect the 2s10s yield curve to invert next quarter, and to remain inverted until Q2 2025... without any dire economic consequences. In other words, in some bizarro universe, Goldman sees the US financial sector existing under an inverted yield curve for exactly three years, and even more magically, the US somehow manages to avoid a historic depression during this period.
Not surprisingly, even Goldman concedes that this makes little sense, and tries to explain away its ludicrous forecast by saying that it's bad... but not as bad as it was in the 1970s. Which, considering the amount of debt in the economy and the hyperfinancialization in the markets, is a completely spurious and meaningless comparison (if the US was to undergo through a 1970s style stagflation, the S&P would crash 90%), and is precisely why Goldman used it:
A notable aspect of our forecasts is that they feature a roughly 20bp inversion of the 2s10s UST curve as we progress through the year. Although this appears significant in the context of the business cycles since the late 1980s, where this curve has not inverted by more than 50bp ahead of a recession, inversions were significantly more pronounced in the 1970s and early 80s (Exhibit 4). We’ve argued in a previous report that earlier and/or deeper nominal curve inversions should not be that unusual in high inflation environments with significantly inverted inflation curves, requiring only modest flattening of the real yield curve flattening. As a result, in such periods we think modestly inverted nominal curves are a less definitive signal of recession probability than when using information about both the real and inflation curves.
What's the take home message here? Well, Goldman is right in predicting that the 2s10s will invert as soon as next quarter - after all, we said just that last night - and as we also explained, this means that the next recession could start as soon as 11 months after the first hike (last week), and potentially much sooner considering where inflation currently is. The rest of Goldman's note - namely the part about how one can ignore the recession and it's really no big deal - one should simply ignore.
Actually, there is another reason why one can ignore most if not all of the above: with the act of hiking, the Fed has doomed the US, because as this chart from Deutsche Bank makes clear, in the modern (fiat high debt) era, every single Fed hiking cycle has led to some kind of financial crisis somewhere across the world
Masochists can read much more in the full note available to pro subscribers in the usual place.

>>> US Close Dow +1,02% S&P +1,43% Nasdaq +1,92% Russell +1,13% VIX 21,67 -8,06%

Closing Market Summary

The stock market ended Thursday on a firmly higher note with the Nasdaq (+1.9%) finishing ahead of the S&P 500 (+1.4%) and Dow (+1.0%).

Equities followed yesterday's weak finish with an opening advance and a daylong extension of the early gains. The S&P 500 clawed back above its 200-day moving average (4476), which has been in focus since Friday, while the Nasdaq continued this week's outperformance.

Nasdaq faced some pressure in early trade, but it took the lead in midday action with chipmakers fueling afternoon gains in the tech-heavy index. The PHLX Semiconductor Index jumped 5.1% with all but one of its component gaining at least 2.0% while NVIDIA (NVDA 281.50, +25.16, +9.8%) and Intel (INTC 51.62, +3.35, +6.9%) finished in the lead. NVIDIA rallied to its best level in ten weeks while Intel overtook its 50-day moving average (48.75), approaching its 200-day moving average (52.04).

The technology sector (+2.7%) was the only group with a gain of more than 2.0% while the materials sector (+2.0%) finished just behind after outperforming throughout the day. Steelmaker Nucor (NUE 153.52, +6.38, +4.3%) and fertilizer producers Mosaic (MOS 68.57, +0.64, +0.9%) and CF Industries (CF 106.40, +2.81, +2.7%) hit fresh 52-week highs as concerns about supply and rising prices persisted.

Crude oil, meanwhile, was a soft spot today, but not before it touched its best level in almost two weeks in overnight trade. It finished today's session with a loss of $4.02, or 3.5%, at $111.24/bbl. However, the energy sector (+0.1%) was able to eke out a slim gain, extending this week's advance to 5.0%.

The consumer discretionary sector (+0.7%) finished near the bottom of today's leaderboard as modest losses in influential components like Home Depot (HD 315.78, -1.27, -0.4%) and Lowe's (LOW 219.17, -1.75, -0.8%) overshadowed gains in most remaining components. HD and LOW retreated after KB Home (KBH 34.38, -1.65, -4.6%) missed Q1 expectations, but reaffirmed its guidance for FY22 revenue.

Elsewhere in the discretionary sector, travel names finished among the leaders with Booking.com (BKNG 2261.99, +102.24, +4.7%) ending in the top spot after Trip.com (TCOM 24.50, +0.48, +2.0%) beat Q4 expectations.

Treasuries slumped out of the gate but rebounded as the day went on. The 30-yr bond turned positive in the afternoon, sending its yield lower by a basis point to 2.51% while the 10-yr note finished with a modest loss, lifting its yield by two basis points to 2.34%.

On the international front, an Axios reporter tweeted that he has been told by the chief of staff to Ukraine's president that some progress has been made in cease-fire negotiations.

Reviewing today's economic data:

  • Initial jobless claims for the week ending March 19 decreased by 28,000 to 187,000 (consensus 210,000), which is the lowest level since September 6, 1969. Continuing jobless claims for the week ending March 12 decreased by 67,000 to 1.350 million, which is the lowest level since January 3, 1970.
    • The key takeaway from the report is that it is consistent with a tight labor market; however, the multi-decade low in initial and continuing claims is going to feed into concerns about a pickup in wage-based inflation pressures that might compel the Fed to take a more aggressive approach in removing its policy accommodation.
  • Durable goods orders for February declined 2.2% month-over-month (consensus -0.5%) after increasing 1.6% in January. Excluding transportation, durable goods orders fell 0.6% month-over-month (consensus +0.5%) after increasing 0.8% in January.
    • The key takeaway from the report is that the weakness follows on the heels of a solid January report despite the effects of the Omicron variant. The downturn likely reflects some natural slowing, meaning it is too early to tell if this is the start of a weaker trend.
  • The IHS Markit Manufacturing PMI increased to 58.5 in the preliminary reading for March from February's final reading of 57.3.
  • The IHS Markit Services PMI increased to 58.9 in the preliminary reading for March from February's final reading of 56.5.
  • The Current Account deficit narrowed to $217.90 bln in Q4 from a revised deficit of $219.90 bln (from -$214.80 bln) in Q3.

February Pending Home Sales (consensus 1.2%; prior -5.7%) and the final reading of the Michigan Consumer Sentiment survey for March (consensus 59.7; prior 59.7) will be released tomorrow at 10:00 ET.

  • Dow Jones Industrial Average -4.5% YTD
  • S&P 500 -5.2% YTD
  • Russell 2000 -7.6% YTD
  • Nasdaq Composite -9.3% YTD

9to5 : Here’s how you will (and won’t) be able to use Apple digital IDs in the r



Support has officially launched for Apple Wallet to securely store driver’s licenses and state IDs on iPhone and Apple Watch. While there is excitement around the new feature, there are also a number of questions and concerns. Let’s dive into how Apple digital IDs work in the real world, where they’re available, where they’re accepted, and more.

Table of contents
Apple digital IDs background
After first unveiling support for digital IDs in the Wallet app back in June 2021 and pushing back the debut until March 2022, the first US state has officially launched support for the feature.
With support for Apple digital IDs, states can allow users’ existing physical ID to be stored securely on iPhone and Apple Watch with the same encryption that makes Apple Pay possible.
The goal with Apple digital IDs is to offer the security and privacy of iPhone and Apple Watch like Face ID and Touch ID, strong encryption, and other benefits that “a physical ID can’t match.”

Apple digital IDs availability
Support for Apple digital IDs is determined by each state/territory and is opt-in for users.
Now available
  • Arizona
Coming soon
Apple hasn’t shared exactly which states will launch next. But per the company, this is the short-list that should offer availability “soon”:
  • Colorado
  • Connecticut
  • Georgia
  • Hawaii
  • Iowa
  • Kentucky
  • Maryland
  • Mississippi
  • Ohio
  • Oklahoma
  • Territory of Puerto Rico
  • Utah
In total, we know that Apple has been in talks with at least 30 states about adopting support for its digital IDs with those listed above having committed to the feature.

How Apple digital IDs work
Adding your ID
  • iPhone 8 and later with iOS 15.4 required and Apple Watch Series 4 or later with watchOS 8.4 required
  • Open the Wallet app on iPhone and tap the + icon in the top right corner
  • Choose Driver’s License or State ID
  • Currently only for Arizona residents – tap Add to iPhone and Apple Watch or Add to iPhone
  • You may be required to log in to your state’s DMV/MVD website to authorize adding your ID to Apple Wallet
Apple notes “To help ensure that the person adding the identity card to Wallet is the same person to whom the identity card belongs, the user will be asked to take a selfie and scan the front and back of their driver’s license or state ID card, which will be securely provided to the issuing state for verification.”
Part of the fraud prevention will include completing “a series of facial and head movements during the setup process.” Apple also highlights that each state is responsible for “verifying and approving the user’s request…”

Where and how are Apple digital IDs accepted?
One of the challenging aspects to all of this is that each state will have its own laws and procedures around how Apple digital IDs can be used and official support will take time to build.
For now, it looks like certain TSA checkpoints at the Phoenix International Airport are the only officially supported places to use Apple digital IDs.
ID cards in Wallet are currently available for use in select states at select TSA checkpoints within Phoenix Sky Harbor International Airport (PHX). Travelers should refer to checkpoint signage to confirm availability.
These will work via NFC reader and users won’t have to hand over their devices to TSA staff.

What about law enforcement, banks, etc.?
However, as 9to5Mac reader Robert P pointed out, Arizona will still require drivers to carry their physical driver’s license “at all times” – an Apple digital ID will not be a substitute, at least for now.
Addressing privacy concerns, the Arizona Motor Vehicle Division says that police officers will not take devices. But that soon, “technology will be available for law enforcement to request permission to access your digital driver’s license from a dedicated law enforcement device.”

This brings up the point that government, businesses, etc. will need to build out formal NFC support to accept Apple’s digital IDs to preserve all of the privacy benefits.
However, it’s unknown if we could see places like wireless carriers, banks, and more accept them for proof of identity by checking it visually – instead of or ahead of accepting it with an official NFC device. There’s really no way to know how that will go or how slow adoption could take.
Getting states to officially adopt digital IDs is a big step for Apple, but expect it to take years for them to become widely accepted as an official form of ID.

Apple digital ID privacy features
As governments and businesses do begin to adopt official NFC support for Apple digital IDs, here are how the privacy features work:
  • Driver’s license and state ID in Wallet presents only the information needed for the interaction
  • Users have the opportunity to review and authorize information being requested before it is shared
  • Digital IDs are shared through encrypted communication directly between iPhone/Apple Watch and the identity reader (similar to Apple Pay)
  • If a device is lost, Find My allows you to remotely lock or erase it
  • For supported TSA locations, users do not need to show or hand over their device, just scan it
    • TSA will also capture a picture for verification purposes

Wash. Post : Top Russian military leaders repeatedly decline calls from U.S., pr

Top Russian military leaders repeatedly decline calls from U.S., prompting fears of ‘sleepwalking into war’
Lack of communication leaves the world’s two largest nuclear powers in the dark about explanations for military movements from senior officials

Repeated attempts by the United States’ top defense and military leaders to speak with their Russian counterparts have been rejected by Moscow for the last month, leaving the world’s two largest nuclear powers in the dark about explanations for military movements and raising fears of a major miscalculation or battlefield accident.

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Since Russia’s invasion of Ukraine, Defense Secretary Lloyd Austin and Gen. Mark A. Milley, the chairman of the Joint Chiefs of Staff, have tried to set up phone calls with Defense Minister Sergei Shoigu and Gen. Valery Gerasimov but the Russians “have so far declined to engage,” said Pentagon spokesman John Kirby in a statement Wednesday.

The attempted calls by Austin and Milley, which have not previously been reported, come as Russia conducts operations near the borders of NATO members Poland and Romania while the United States and its European allies conduct air-policing operations over the Baltic Sea and pour weapons and equipment into Ukraine by ground transport.

Moscow and Washington maintain a deconfliction channel but current and former officials say contact from higher-ranking military leaders is needed to avoid unnecessary escalation or confusion.

“There is a high risk of escalation without the firebreak of direct contact between the most senior officials,” said James Stavridis, who served as the Supreme Allied Commander at NATO from 2009 to 2013. “Very young people are flying in jets, operating warships, and conducting combat operations in the Ukrainian war. They are not seasoned diplomats, and their actions in the heat of operations can be misunderstood.”

“We must avoid a scenario of NATO and Russia sleepwalking into war because senior leaders can’t pick up a phone and explain to each other what is happening,” he added.

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Russia’s recent use of hypersonic missiles and other sophisticated weaponry against targets in western Ukraine have underscored the threat of spillover into a broader confrontation.

“The risks are obviously elevated currently,” said Rob Lee, a senior fellow at the Foreign Policy Research Institute. “Russia is striking targets in western Ukraine, which are not far from the border with NATO members, and the Ukrainian Air Force apparently continues to operate from that region, which means there is a risk that its aircraft could be mistaken for NATO aircraft across the border.”

U.S. defense officials have described the deconfliction phone line as a tactical mechanism to avoid miscalculations, especially when it comes to protecting NATO airspace or territory, but its functionality can be limited.

“It’s not set up to be a complaint line where you can just call in and just grouse about stuff,” said a U.S. defense official this week when asked about whether anything had been communicated through the channel. The official spoke on the condition of anonymity under ground rules set by the Pentagon.

Sam Charap, a senior political scientist at Rand Corporation, said calls by Austin and Milley serve a “fundamentally different purpose” than the deconfliction channel.

“One is about tactical accident avoidance. The other about strategic engagement,” he said. “It’s always important to maintain the strategic level to communicate our interests clearly and better understand theirs. When there’s no communication at that level, their worst-case assumptions, often based on poor information, are more likely to drive their behavior.”

As Russia’s battlefield setbacks become more pronounced and the conflict nears its second month, U.S. officials are concerned that Russian President Vladimir Putin may escalate militarily in the hopes of changing the trajectory of the war. As more dangerous weaponry and tactics are deployed, the risks of a wider conflict grow.

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“A nightmare scenario would be a Russian missile or attack aircraft that destroys a U.S. command post across the Polish-Ukrainian border,” said Stavridis, a retired admiral. “A local commander might respond immediately, thinking the event was a precursor to a wider attack. This could lead to rapid and irreversible escalation, to include potential use of nuclear weapons.”

Stavridis said when he was Supreme Allied Commander, he could dial his Russian counterpart anytime “and did on several occasions to clarify a situation and de-escalate.”

The Pentagon holds the view that engagement between the U.S. and Russian defense leaders is “critically important at this time,” Kirby said. Besides the deconfliction channel, the United States and Russia can also engage through the defense attache at the U.S. Embassy in Moscow or the relaying of messages to the Ministry of Defense.

Communications between the United States and Russia have been much more sparse since the war began last month. The U.S. ambassador to Russia, John J. Sullivan, has met with Russian officials most frequently with on and off visits and calls in Moscow. President Biden’s national security adviser, Jake Sullivan, spoke to his counterpart, Nikolay Patrushev, last week for the first time since the start of the conflict. Some U.S. and Russian military officials met last week at the Russian Ministry of Defense, CNN first reported.

Secretary of State Antony Blinken has not attempted any conversations with his counterpart, Russian Foreign Minister Sergei Lavrov, since the start of the conflict, according to U.S. officials.

It remains unclear why Russia’s top generals have refused to hold calls with their U.S. counterparts.

“I suspect that the problem lies with the Russian insistence that this is a ‘special military operation’ and unwillingness to admit the real nature of the war,” said Angela Stent, a Russia scholar at Georgetown University who served as a senior intelligence officer in the Bush administration.

The generals may also be waiting on Putin’s approval to make the calls, given the high stakes of the conflict, and he may not be signing off, Charap said.

Another theory is that Putin may now view the United States as a determined adversary bent on his downfall and not worth engaging. Russian officials bristled at Biden calling Putin a “war criminal,” saying it could lead to a complete break in relations.

Biden has sought to avoid a conflict by keeping U.S. troops out of Ukraine and U.S. aircraft out of its airspace.

“You’re talking about avoiding incidents with aircraft or at sea,” said Ben Hodges, a retired Army officer who served as commanding general of the U.S. Army Europe. “I’m sure they would’ve wanted to convey to Gerasimov and Shoigu that Russian pilots should not be launching missiles too close to the Polish border, but they would also want to talk about other places, not just Ukraine, where you have Russian aircraft.”

“I would also imagine they would want to convey — here’s what we’re doing, don’t interpret what we’re doing as a provocative act,” he added.