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The world's biggest SIM card manufacturer, Gemalto, revealed yesterday to have been hacked by the NSA and GCHQ, has taken a $470m hit in its stock price. Gemalto was caught unawares by the revelation that the US and UK intelligence agencies had compromised its systems, and stole potentially millions of SIM card keys used to encrypt phone calls around the world. Gemalto supplies SIMs to 450 networks on Earth, from AT&T to T-Mobile, and launched an investigation. Speculation that the Dutch manufacturer may be forced to recall chips, incurring huge costs, caused its share price to fall eight per cent in early trading before recovering a little to four per cent down on closing. Obtaining SIM card private keys allows intelligence agencies to decrypt intercepted calls without anyone knowing – not the users, the network operators nor the handset manufactures. Communications eavesdropped today, yesterday or five years ago can be decoded once a SIM's Ki key is obtained. The company issued a statement today in which it promised to get to the bottom of the hack: "Gemalto is especially vigilant against malicious hackers, and has detected, logged and mitigated many types of attempts over the years. At present we cannot prove a link between those past attempts and what was reported yesterday. “We take this publication very seriously and will devote all resources necessary to fully investigate and understand the scope of such sophisticated techniques.” Incensed Security watchers praised the company for its prompt and forthright response. But privacy and communications experts are incensed by the latest revelations about GCHQ/NSA warrantless mass surveillance. The World Wide Web Foundation has called for urgent steps to be taken to secure private calls and online communications. Its chief exec Anne Jellema commented: "The news that US and UK spy agencies hacked the network of a Dutch company to steal encryption keys for billions of SIM cards is truly shocking. "Possession of these keys would allow these agencies to access private calls, web browsing records and other online communications without any of the legal safeguards and processes in place to prevent abuses of power.” Jellema argued that the surveillance would undermine trust in mobile payments, among other concerns. “This is yet another worrying sign that these agencies think they are above the law. Apart from its blatant disregard for multiple human rights, this foolish move undermines the security and future of the global mobile payments industry." She noted that any security weakness or backdoors into a cryptographic system might also be exploited by third-party cybercriminals and called for an investigation into GCHQ including "a full and frank disclosure as to why they hacked a private company, and one headquartered in an ally country." Other security experts warned that other intelligence agencies may be up to the same tricks. Andrew Conway, research analyst at Cloudmark, said: “The ease with which the NSA and GCHQ were able to compromise all mobile communications is shocking. But there are other nation state actors with just as much determination and sophisticated hackers. In particular, China's Axiom Group has shown remarkable abilities to penetrate targets in the West.” Not just the NSA? He highlighted other worrying accounts of mobile companies being targeted: "Last year, mobile security company ESD revealed that they had detected a network of fake mobile phone towers intercepting communications near US military bases. It was assumed that whoever was responsible was just collecting metadata, because 3G and 4G communications are encrypted. Could it be that this was some foreign espionage agency with the ability to listen to US mobile phone calls? Or perhaps it was the NSA monitoring all civilian phone calls near military bases for possible terrorist activity? Regardless, it is clear that mobile communications have been badly compromised.” A complete revamp of mobile comm security may eventually be required, Conway concluded. "In the short term organizations requiring secure voice communications can consider deploying mobile devices with another layer of encryption, such as Blackphone or Cryptophone. In the long term, we need to do a better job of end-to-end encryption of all mobile and fixed line communications - which will include not relying on a single master key for all communications." Source

Swapping software can give one GSM phone the power to prevent incoming calls and text messages from reaching other phones nearby. By making simple modifications to common Motorola phones, researchers in Berlin have shown they can block calls and text messages intended for nearby people connected to the same cellular network. The method works on the second-generation (2G) GSM networks that are the most common type of cell network worldwide. In the U.S., both AT&T and T-Mobile carry calls and text messages using GSM networks. The attack involves modifying a phone’s embedded software so that it can trick the network out of delivering incoming calls or SMS messages to the intended recipients. In theory, one phone could block service to all subscribers served by base stations within a network coverage area known as a location area, says Jean-Pierre Seifert, who heads a telecommunications security research group at the Technical University of Berlin. Seifert and colleagues presented a paper on the technique at the Usenix Security Symposium in Washington, D.C., last week. An online video demonstrates the attack in action. Seifert’s group modified the embedded software, or “firmware,” on a chip called the baseband processor, the component of a mobile phone that controls how it communicates with a network’s transmission towers. In normal situations, when a call or SMS is sent over the network, a cellular tower “pages” nearby devices to find the one that should receive it. Normally, only the proper phone will answer—by, in effect, saying “It’s me,” as Seifert puts it. Then the actual call or SMS goes through. The rewritten firmware can block calls because it can respond to paging faster than a victim’s phone can. When the network sends out a page, the modified phone says “It’s me” first, and the victim’s phone never receives it. “If you respond faster to the network, the network tries to establish a service with you as an attacker,” says Nico Golde, a researcher in Seifert’s group. That’s enough to stall communications in a location area, which in Berlin average 200 square kilometers in size. The group didn’t design the hack to actually listen to the call or SMS but just hijacked the paging process. Traditionally, the details of how baseband processors work internally has been proprietary to makers of chips and handsets. But a few years ago, baseband code for a certain phone, the Vitelcom TSM30, leaked out. That enabled researchers to understand how baseband code works and spawned several open-source projects to study and tweak it. The Berlin group used that open-source baseband code to write replacement software for Motorola’s popular C1 series of phones (such as the C118, C119, and C123). Those devices all use Texas Instruments’ Calypso baseband processor. The researchers tested their attack by blocking calls and messages just to their own phones. However, they calculate that just 11 modified phones would be enough to shut down service of Germany’s third-largest cellular network operator, E-Plus, in a location area. “All those phones are listening to all the paging requests in that area, and they are answering ‘It’s me,’ and nobody in that cell will get an SMS or a phone call,” Seifert explains. Jung-Min Park, a wireless-security researcher at Virginia Tech, says that although devising the attack requires detailed technical knowledge, once it is created, “if someone had access to the same code and hardware, repeating the attack should be possible for an engineer.” Although carriers today mostly tout their 3G and 4G services, most networks around the world still use GSM networks. Around four billion people worldwide use GSM networks for calls, and carriers also use them for some machine-to-machine applications. The problem could be fixed, but that would require changing GSM protocols to require phones to prove their identity through an additional exchange of encrypted codes. “The defense is expensive to deploy,” says Victor Bahl, principal researcher and manager of the mobility and networking research group at Microsoft. “I can only speculate that the cell network providers are reluctant to invest in mitigation strategies in the absence of an immediate threat.” Seifert says the research of his group and others shows that basic aspects of mobile communications can no longer be assumed to be safe from hacking. “The answer of the carriers is: ‘It’s illegal—you are not allowed to do it,’” he says, “However, the implication is that the good old times, where you can assume that all the phones are honest and following the protocol, are over.” Demo: Sursa: Software Update to $20 Phones Could Topple 2G Cell Networks | MIT Technology Review Oare e chiar "noua" stirea?