Iron Ore - some perspective on a polarising market

Luke Smith, Ausbil

August 2021

Iron Ore remains a commodity that polarises the market. While supply continues to be the main focus of the market, demand has been just as important to the strength of Iron Ore over the last 12-18 months. There were some extreme circumstances that resulted in the market being in the situation where Iron Ore broke through and maintained levels above $200/t. We discuss these below.

On demand, Chinese economic activity and steel demand was impacted materially in early 2020, given the implications of COVID-19, however, this recovered extremely quickly from 2Q20 and into 2H20 on the back of supportive stimulatory government policies. Similarly, the Rest of the World was significantly impacted in 2020, and while it took longer to recover, it is now accelerating in terms of steel demand as economies recover and strengthen.

On supply, issues commenced with the dam failures in Brazil (both Samarco and Brumadinho), then tightened further on the back of COVID-19 related issues (labour in particular) further impacting supply. The Pilbara has also had its issues, which shouldn't be ignored, which from our perspective relate to the diversified majors underinvesting in sustaining capex through the downturn. These mixed causes have conspired with the pandemic to tighten overall supply, ultimately pushing Iron Ore prices higher.

A number of these factors, both in terms of supply and demand, will ease over coming years, so we expect Iron Ore prices to continue to taper from current levels. While the diversified major resources companies (whose earnings are dominated by Iron Ore) may still outperform, given ongoing earnings upgrades, strength in balance sheets and free cash flow, limited M&A activity and strength in returns, we have a relative preference towards other commodities within the complex. Our preferred exposures remain Base Metals (Copper and Nickel), Battery Materials and Oil & Gas.

The following outlines some of the background to our view on the commodity.

Demand: What was driving the rapid growth in Chinese steel production?

The strength in Chinese steel demand growth through early 2021 was a continuation from the strength seen through 2H2020. China slowed quickly and aggressively in 1Q CY2020, given the implications of Covid-19, but likewise, the reopening was quick and robust, hence production rates were high during 2H2020, and continued into early 2021, as outlined in Chart 1.

Construction accounts for roughly 60% of Chinese steel demand (arguably significantly more when machinery is included). All three major construction-related components of the Chinese economy benefited from loose monetary and stimulatory fiscal policy, which resulted in an acceleration of infrastructure, real estate and manufacturing-related activity. The result has been booming steel demand for construction, and ultimately significant iron ore demand as a result.

This positive steel demand backdrop has clearly been tempered in recent months, with the policy changes focused towards both infrastructure and property investment being key factors resulting in easing demand as we entered the second half of the year. This in turn has clearly been one of the major driving forces in the correction in Iron Ore prices.

Chart 1: Chinese annualised steel production (Mtpa)

Source: World Steel Data, JP Morgan

Demand: What other factors are important when assessing the demand backdrop?

The rest of the world (RoW) demand picture for steel should also not be ignored. Right now, we have a situation where Chinese steel consumption was recovering to higher levels, whereas global steel production is still in the process of recovering and ultimately accelerating (despite an extremely strong backdrop). During 2020, the clear demand driver for Iron Ore was a China recovery. In 2021, demand is more about the rest of the world starting to normalise. Chinese steel production rose ~60mt in 2020 versus 2019, but the rest of the world fell by ~110mt. In 2021, we have Chinese growth rates moderating, but a recovery in the rest of the world, to almost normalised production rates.

Supply: What are your expectations for Vale iron ore production in Brazil?

Vale, who are one of the four major Iron Ore producers globally (with RIO, FMG and BHP), cut production guidance for 2021 to 315-335Mt in December 2020. By way of comparison, the overall global market for Iron Ore is 1.5Bt pa. This downgrade compares to their original guidance of 375Mt, and has therefore removed a significant amount of expected supply from the marketplace. Vale continues to have issues with its tailings dams (recently a 15mtpa facility was taken offline as a result). The company are also having issues restarting suspended capacity, and there was a fire in January at their Madeira Port which is limiting shipments. We are cautious on Vale production increases in subsequent years. Vale are targeting roughly 400Mtpa run-rate for capacity by year-end 2022, however this likely only implies reaching that run-rate in the final quarter. The wet season and continued issues with restarts are likely to impact output leading into those run-rates, and as a result, we continue to take their growth forecasts with a grain of salt.

Price: What is your iron ore price forecast? How does this compare to historical assumptions?

Given the market backdrop, we have described, we currently forecast Iron Ore prices (62% Fines) to taper from current levels towards $140/t in CY22 and $110/t in CY23.

We had certainly been surprised by the absolute level of strength in the commodity over the last 6-9 months. The combination of stronger than expected demand and supply weakness exceeded our expectations during this period. COVID only exacerbating market tightness, through Chinese construction-related stimulus and COVID-related supply issues in Brazil. Clearly, this had unwound in recent weeks, with China's tightening measures have a significant impact on the demand backdrop.

As a result of the stronger than expected backdrop in recent years, we have been in a continual upgrade phase to our own commodity and earnings expectations. That said, for the last three years (at least) we have been well above consensus expectations, supporting our view of significant ongoing earnings upgrades through this period, which ultimately was the key driving factor for share prices across the diversified majors and pure-play iron ore miners, in our view.

Price: Are your forecasts conservative or optimistic?

Our forecasts reflect detailed supply and demand analysis for the commodity. Some extreme circumstances have seen the market in Iron Ore breakthrough and until recently maintain levels above $200/t. As we highlight regarding the supply issues we have seen in Brazil, this supply contraction commenced with the tailings dam failures (both Samarco and Brumadinho), then tightened further on the back of COVID-19 related issues impacting supply further. The Pilbara has also had its issues, which should not be ignored, which from our perspective, simplistically relate to the diversified majors underinvesting in sustaining capex through the downturn.

Secondarily, in terms of demand, last year was an exceptional year. Post-COVID, China reverted to traditional mechanisms to support its economy. This saw renewed stimulus focused on construction-related industries (notably infrastructure and manufacturing, but increased liquidity also supporting property markets), which in turn supports the demand for steel-related commodities.

A number of these factors, both in terms of supply and demand, will continue to ease over the coming years, so we are comfortable with our forecasts at this stage. On the supply side, it is worth noting that we are seeing some early signs of a supply response from non-traditional producers, and also from a number of smaller producers. The numbers are small, but a small increase in supply is evident.

What is your long-term Iron Ore price and has it increased?

We currently use US$70/t real as our benchmark for the longer-term underlying price for Iron Ore. This increased in recent years from roughly US$60/t previously. This step-change reflected stronger longer-term demand projections (from China in particular) which in turn require the incentive price for Chinese domestic Iron Ore mine supply to be higher. Chinese GDP growth, population growth and per capita steel consumption were the key factors driving up our expectations for higher than expected demand growth. We expect the Chinese domestic Iron Ore supply will remain the marginal source of supply.

The key question for us is how large (and how quickly) the Simandou project in Guinea will be brought online over the medium term, in order to displace this marginal domestic Chinese supply. China has set plans in motion for more independence in terms of Iron Ore, which involves the development of additional African supplies. While we expect the Simandou project to come online faster and larger than market expectations (similar to what we have seen with China's investment in Bauxite in Guinea, and supporting China's aim to diversify away from Australian supply), ultimately Chinese domestic iron ore supply is likely to remain the marginal tonne.

So how are we positioning the Ausbil Global Resources Fund with this in mind?

Our expectations for Iron Ore prices to soften from their elevated levels were confirmed in recent weeks and had been based on two premises. Firstly, and of more immediate concern, Chinese demand was likely to soften from the elevated levels as credit tightened and construction-related activity softened (clearly confirmed by recent activity). Secondly, and of more medium-term concern, supply eventually recovers, with marginal supply and Brazilian tonnes expected to continue to respond to the enticement of current high prices. While Vale's growth guidance should be taken with a pinch of salt, supply is still expected to continue to increase into 2022.

As a result, positioning within the Ausbil Global Resources Fund, based on relative value within the commodities complex, and concerns regarding the now confirmed softening outlook for Iron Ore, resulted in negative positioning on the equities exposed to the commodity.

Important to highlight though, that this was a relative call amongst commodities, given our overarching positive thesis towards resources over the medium term. This negative positioning on Iron Ore equities enabled us to allocate towards equities exposed to our preferred commodities (base metals primarily in copper and nickel, battery materials, and oil & gas) which we expect to continue to strengthen from current levels, both at the commodity and equity level.

This positioning enabled the Fund to navigate an extremely volatile period within the resources sector. August month-to-date the S&P/ASX 200 Resources Index is down over -10%, while the performance of the Fund is currently in positive territory. Clearly, the targeted commodity exposure, combined with a long-short approach we take to investing, has enabled the Fund to meet its objective of generating absolute returns regardless of the cycle.

While this has positioned the Fund well in recent months and weeks, we believe that the market has overshot to the downside, through the combination of concerns regarding weaker China economic activity, Delta variant, QE Taper tantrum, USD strength, and continue to see a medium-term opportunity supported by recovering/accelerating demand in both China and the rest of the world, combined with a lack of investment in commodities supply, which will continue to support the backdrop for Resources over the medium term.

Combined with the fact that, despite the recent fall in the commodity, we continue to see fundamental underlying earnings upside for the Iron Ore producers that is ahead of consensus. And given we view that earnings are the key driver for share prices, we have been adding to positioning towards the Iron Ore equities, looking to tactically take advantage of what we view as a commodity that has overcorrected to the downside.

The benefit of our absolute return focus is that we can make the most of tactical opportunities such as elevated price levels, and add protection to exposures to generate preferable risk-adjusted returns across all markets.

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Staying relevant in a fast-changing world

Aoris Investment Management

October 2021

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Ransomware is so rife it's a threat to national security

Michael Collins, Magellan Asset Management

October 2021

Tobias Vernon of the UK owns two small galleries that sell 20th-century ceramics and artworks. Thanks to marketing efforts, the business has almost 50,000 Instagram followers.[1]

One weekend in May, an email appeared from Instagram congratulating the business for getting a 'blue tick', which bestows on the account 'authentic presence'. Vernon, thrilled, clicked the link in the email and logged in. Not long after, Instagram told Vernon the account's email and username had changed. A message soon appeared: "We have seized control of your Instagram account ...We require US$1,000 to grant you your account back."

Vernon eventually paid US$750 in bitcoin to Russians, who released the account. But get this. Three days later, Vernon got an Instagram message from a bakery in Australia that had been hacked by the same group. The baker had been told to contact Vernon for a Tripadvisor-style testimonial that the hackers were trustworthy, so to speak, in that they would release the kidnapped device when paid.

Such traumas are proliferating because the malware-based crime known as ransomware is reaching menacing proportions. Criminally installed encryption that is reversed only by ransom is rising "almost exponentially" in the words of FBI Director Christopher Wray because the virtual private networks that enable working from home have made business systems more vulnerable.[2] US cyber-security firm Mimecast found that 61% of the 1,225 global IT firms it surveyed suffered ransomware attacks in 2020, a 20-point jump from 2019.[3] The Australian Cyber Security Centre, a government agency, said ransomware attacks in Australia rose 15% last financial year to 500 incidents.[4] Global security group, Institute for Security and Technology, estimates 2,400 ransomware victims in the US paid nearly US$350 million in ransom in 2020, a 311% jump in payments from 2019. Ransomware "is an urgent national security risk" because "attacks on the energy grid, on a nuclear plant, waste-treatment facilities ... could have devastating consequences," the institute cautioned.[5]

As such warnings signal, ransomware has evolved from a cottage industry into something resembling a "criminal franchising arrangement", according to the Australian Cyber Security Centre.[6] At its most elaborate, the crime starts with hackers who penetrate a network. They then sell these 'keys' to scammers who contact ransomware-as-a-service groups that peddle malware for a percentage of the plunder. The attackers infiltrate systems to make them inoperable, lock out owners and steal data. They demand a ransom to release devices and sometimes threaten to leak stolen data, the virtual world's equivalent to shooting one of the hostages, especially if victims contact law-enforcement authorities.[7] Ransom paid, the victims are sent a 'decrypter key' to unlock their systems that often never operate as well as before, or never work again. Crypto launderers are on hand to hide the criminal origins of ransom payments. Governments hostile to the west protect these thieves who give themselves names such as DarkSide and REvil, shortened from Ransomware-Evil.

Nothing seems safe from virtual kidnappers. Businesses, charities, essential services, governments, hospitals, the military, the police, schools and software providers have suffered what is a paralysing blow to operations. Ireland's health system has been targeted; so too Italy's vaccination booking system and the US Coast Guard. When pursuing healthcare facilities - and 560 in the US were targeted in 2020[8] - the scammers don't seem to care if people die when equipment and surgeries stop. Last October, for example, the University of Vermont Medical Center couldn't treat some chemotherapy patients after a ransomware attack destroyed their records.[9]

Among notable attacks this year, in March, US insurer CNA Financial reportedly paid a then-record US$40 million ransom.[10] In May, ransomware disrupted Colonial Pipeline, which carries 45% of US east coast fuel supplies, for 11 days until a US$$4.3 million ransom was paid for a malfunctioning decrypter key. In July, a ransomware attack on the US-based software company Kaseya was notable for gifting up to 1,500 global victims to the criminals and that the ransom demand was a record US$70 million.[11] The biggest ransomware attack in terms of victims is still the 'WannaCry' one in 2017, when up to 300,000 computers were infected though the criminals received limited payment.[12]

Ransomware is flourishing because the risk-reward calculation favours the attackers. Even if paying ransoms risks reputational damage, what choice do companies have but to pay a government-protected group that might destroy their mission-critical computer system? Paying the ransom, however, often fails as a solution. The Mimecast survey found that 52% of ransomware victims paid the ransom but only 66% of those recovered their data - the others were double-crossed.[13]

To reduce the reward part of the criminal equation, the Australian Cyber Security Centre[14] and the FBI[15] discourage ransom payments. Some people oppose the concept of ransomware insurance (offered by companies now swamped with claims).[16] US sanctions outlaw ransom payments to blacklisted groups such as Russia's cybercriminal Evil Corp.[17] This has prompted some to call for all ransom payments to be illegal. But acceding to the demands of non-virtual crooks is legal and often wise.

The hope is that the risk part of the calculation might increase to the detriment of the scammers because western governments are enhancing and coordinating efforts to stop ransom attacks. Among steps, the White House in May issued an executive order to encourage government and private-sector cooperation on cybersecurity.[18] In July, the US government released a national security memorandum to protect infrastructure from cyberattack.[19] In August, US President Joe Biden hosted Big Tech CEOs and others to tell them to prioritise cyberdefence.

Officials are warning internet users to be better prepared for these attacks. Back up data. Hang onto old hardware in case systems need rebuilding. Use strong passwords and multifactor authentication. Have response plans. Use encryption. Install anti-malware defences. Patch vulnerabilities. Segment networks. Hire skilled security teams and train staff to detect phishing.[20]

Governments are acting because they concede national security is under threat. Proof of this is that in April Biden met Russian President Vladimir Putin and reportedly told his counterpart to rein in ransom criminals and listed the industries that were off limits.[21]

Eradicating the threat seems far off. Computer systems are impossible to secure and it's expensive to try. Phishing emails and other scams too easily trick people into installing malware. Enough employees are willing to sell passwords on the 'dark web'. Perhaps, though, the greatest asset ransomware criminals have is that cryptocurrencies are hard to trace. Many advise that a government crackdown on cryptos is the best way to reduce the menace. The US's unprecedented move in September to blacklist a Russian-owned crypto exchange shows Washington might agree.[22] Something needs to tackle this mobster shakeout for using the web before the damage reaches national-security proportions.

Even if defensive efforts increase, ransomware appears unbeatable when five billion people are connected to the internet. As ransomware is online, the public seems to be unable to come to terms with the magnitude of the threat, which hampers the fightback. It's too true that ransomware would exist even if cryptos didn't. But it might barely register as a danger because how would the criminal be paid? Some victims refuse to pay and the criminals back down. Apple in May declined to pay a US$50 million ransom, as did Dublin when Ireland's health system was stricken. But for some of these non-payers, the recovery costs and wider damage exceeded the ransom. The 'WannaCry' attack emanating from North Korea generated little ransom for the attackers but according to the world's anti-laundering body caused an estimated US$8 billion in damages to hospitals, banks and businesses across the world.[23]

Such calculations show that the ransomware threat needs to be taken much more seriously. The non-virtual world provides the clue to defeating the menace. Kidnapping is a rare crime nowadays because the police caught kidnappers when they spent the cash. The solution to ransomware might be to regulate cryptocurrencies, possibly - as is the intention of China's ban on crypto activities - to the point where they are unviable.

Criminal tool

On September 7, El Salvador became the first country in the world to accept bitcoin as legal tender (along with the US dollar). Allowing people to shop for everyday items and pay taxes with the cryptocurrency marketed under the local name for cool (Chivo) was beset with teething problems, especially given that most Salvadorans don't have internet access. The government-run bitcoin e-wallet went offline for hours and didn't appear on major app stores. Many people were unable to sign up as users. Others demonstrated against bitcoin's use. The value of bitcoin dived more than 10% on the day, where a shift in bitcoin's value is a liability for the government.[24]

While most of the start-up hitches will be overcome, the experiment could fail for many reasons including that most locals seem against the idea. One looming problem for El Salvador if bitcoin use were to become extensive is the Financial Action Task Force, an intergovernmental body created to combat money laundering, might blacklist the country, which would be a blow to its financial sector. The task force is concerned about bitcoin because its design makes it hard for operators to comply with global 'know your customer' rules imposed to combat the money laundering that enables terrorism and cybercrimes such as ransomware. These know-your-customer rules mean financial intermediaries must know the true name of their users, monitor their transactions and report suspicious activities to authorities. Even with these rules, the UN estimates that US$2 trillion is laundered each year.[25]

Cryptos are making it easier to launder money. It's no coincidence that ransomware has boomed as cryptocurrencies soared in popularity. The borderless, decentralised and anonymous nature of bitcoin transactions means no trusted third party such as a central bank, bank or payments company is involved; 'decentralised finance', or 'DeFi', does away with these third parties and DeFi players boast how they do not care who their customers are.[26] Such attitudes have allowed ransomware criminals who demand payment in bitcoin to designated wallets to develop techniques that cloud the source of their funds.

The 'chainhopping' technique entails exchanging the bitcoin loot for other cryptos via any number of crypto exchanges. 'Tumbler' or 'mixing' services blend legitimate and ill-gotten cryptocurrencies before redistributing them. Further obscurity can be gained by using 'money-mule' service providers who set up accounts with false or stolen credentials. Some ransomware criminals demand ransoms be paid in 'privacy coins' - cryptos such as Dash, Monero and Zeash that make payments untraceable.[27] One technique is to use 'ring signatures' where so many parties sign a transaction no one knows which party initiated it.[28]

To be sure, in some ways, the blockchain makes it easier to track cryptos than it is to trace physical cash. But there are too many ways it doesn't. In a victory against ransomware criminals, the US government tracked and retrieved much of the bitcoin ransom paid to the DarkSide ransomware group behind the heist of Colonial Pipeline.[29] Such successes for law enforcement officials, however, will likely only make ransomware criminals refine how they hide their spoils.

Western governments do have options if they want to change the risk-reward equation against ransomware scammers. A first step would be to widen know-your-customer and anti-money-laundering laws to include crypto exchanges. The next move would be to sanction crypto exchanges that fail to meet standards - as the US Department of the Treasury did in September when it banned US citizens and companies from transacting with the Russian-controlled SUEX OTC digital currency exchange. The next step for authorities would be to deny foreign banks and crypto exchanges access to the global US-dollar-based banking system unless they show they are equipped and willing to expose digital ransoms. This is a potent threat because much crypto is exchanged for cash. If these steps fail, western governments could even become aggressive online to disrupt ransomware groups. Officials could hack the servers enabling cryptocurrencies such that they can't function. (Private companies cannot legally hack back at criminals.) Another option for western governments is to pressure the countries that house cybercriminals.[30] They could follow China's lead: Beijing in September listed money laundering as one of the many reasons it expanded its crackdown on cryptos by declaring all activities related to digital coins are "illegal".[31]

Such actions might mean the world loses the (disputed) benefits of cryptocurrencies. But that's part of the cost-benefit analysis governments need to undertake to defeat the scammers that hound legitimate users of the internet, be they UK gallery owners or bakers in Australia.

Funds operated by this manager:

[1] Tobias Vernon. 'Phishing trip.' 7 August 2021. The Spectator. spectator.co.uk/article/i-was-held-to-ransom-by-hackers

[2] Axios. 'FBI director says cyber threat is increasing 'almost exponentially' 10 June 2021. https://www.axios.com/fbi-director-warns-cybersecurity-6678e54c-560d-4f41-b556-9c95c1fd78e4.html

[3] Mimecast report. '61% of organisations were infected with ransomware in 2020.' 20 April 2021. mimecast.com/resources/press-releases/dates/2021/4/the-state-of-email-security-report/ 

[4] The Australian Cyber Security Centre. 'ACSC annual cyber threat report'. 1 July 2020 to 30 June 2021. Page 30 of pdf version. cyber.gov.au/acsc/view-all-content/publications/acsc-annual-cyber-threat-report-2020-21

[5] Institute for Security and Technology. RTF report: Combatting ransomware. securityandtechnology.org/ransomwaretaskforce/report/. Dollar amounts on page 7 of the report.

[6] The Australian Cyber Security Centre. Op cit. Page 31

[7] NBC News. 'the battle between the US and ransomware hackers is escalating.' 22 September 2021. nbcnews.com/tech/security/battle-us-ransomware-hackers-escalating-rcna2129

[8] Institute for Security and Technology. Op cit.

[9] 'Patients of a Vermont hospital are left 'in the dark' after a cyberattack.' The New York Times. 26 November 2020. nytimes.com/2020/11/26/us/hospital-cyber-attack.html

[10] Bloomberg News. 'CNA Financial paid $40 million in ransom after March cyberattack.' 21 May 2021. bloomberg.com/news/articles/2021-05-20/cna-financial-paid-40-million-in-ransom-after-march-cyberattack

[11] Reuters. 'Up to 1,000 businesses affected by ransomware attack, US firm's CEO says.' 6 July 2021. Schools in New Zealand were closed and tills at Sweden's Coop grocery chain stopped working. reuters.com/technology/hackers-demand-70-million-liberate-data-held-by-companies-hit-mass-cyberattack-2021-07-05/

[12] BeforeCrypt, ransomware experts. 'The biggest ransomware attacks ever: Top 10 biggest ransomware payments.' 19 June 2021. beforecrypt.com/en/biggest-ransomware-attacks-ever/

[13] Mimecast. Op cit.

[14] The Australian Cyber Security Centre. Op cit. Page 31.

[15] 'The FBI does not support paying a ransom.' See FBI website. Scams and safety. 'Ransomware'. Undated. fbi.gov/scams-and-safety/common-scams-and-crimes/ransomware

[16] See 'Surge in hacking claims forces ransomware insurers to weigh risks.' 6 June 2021. The Telegraph. telegraph.co.uk/business/2021/06/06/time-stop-paying-ransoms-get-hackers-companies-backs/

[17] US Department of the Treasury. 'Treasury sanctions Evil Corp, the Russia-based cybercriminal group behind Dridex malware.' 5 December 2019. home.treasury.gov/news/press-releases/sm845#

[18] The White House. Executive order on improving the nation's cybersecurity.' 12 May 2021. whitehouse.gov/briefing-room/presidential-actions/2021/05/12/executive-order-on-improving-the-nations-cybersecurity/

[19] The White House. 'National Security memorandum on improving cybersecurity for critical infrastructure control systems.' 28 July 2021. whitehouse.gov/briefing-room/statements-releases/2021/07/28/national-security-memorandum-on-improving-cybersecurity-for-critical-infrastructure-control-systems/

[20] US government. Cybersecurity & Infrastructure Security Agency. 'Ransomware guide.' September 2020. https://www.cisa.gov/sites/default/files/publications/CISA_MS-ISAC_Ransomware%20Guide_S508C.pdf

[21] The White House. 'Readout of President Joseph R. Biden, Jr. call with President Vladimir Putin of Russia.' 13 April 2021. whitehouse.gov/briefing-room/statements-releases/2021/04/13/readout-of-president-joseph-r-biden-jr-call-with-president-vladimir-putin-of-russia-4-13/

[22] US Department of the Treasury. 'Treasury takes robust actions to counter ransomware.' Media release. 21 September 2021. home.treasury.gov/news/press-releases/jy0364

[23] Financial Action Task Force website. 'Virtual assets.' gafi.org/publications/virtualassets/documents/virtual-assets.html

[24] See WIRED. 'El Salvador's bitcoin gamble is off to a rocky start.' 7 September 2021. wired.com/story/el-salvador-bitcoin-rocky-start/

[25] UN. Office on Drugs and Crime. 'Money laundering.' unodc.org/unodc/en/money-laundering/overview.html

[26] See 'Cryptocurrency: Rise of decentralised finance sparks 'dirty money' fears.' 15 September 2021. ft.com/content/beeb2f8c-99ec-494b-aa76-a7be0bf9dae6

[27] Institute for Security and Technology. Op cit. Page 14.

[28] See Vinc Breaker. 'Identity hiding ring signatures zero knowledge proof.' 27 March 2020. vincbreaker.me/2020/03/27/IHRSZKP/

[29] Bloomberg News. 'Colonial Hackers Broke the Fundamental Bitcoin Rule.' 8 June 2021. bloomberg.com/opinion/articles/2021-06-08/colonial-hackers-led-the-fbi-down-a-hot-wallet-trail-to-bitcoin-ransom

[30] See Paul Rosenzweig, consultant on cybersecurity. Guest essay. 'There's a better way to stop ransomware attacks.' The New York Times. 31 August 2021. nytimes.com/2021/08/31/opinion/ransomware-bitcoin-cybersecurity.html

[31] Financial Times. 'China expands crackdown by declaring all crypto activities 'illegal''. 24 September 2021. ft.com/content/31f7edf7-8e05-46e1-8b13-061532f8db5f

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