Turns out you can make money by manipulating the network latency.
cPacket has developed a proof of concept showing that these side-channel attacks can be used to create tiny delays in the transmission of market data and trades. By manipulating specific trading activities by several microseconds, an attacker could gain unfair trading advantage. And because the operation occurs outside the range of monitoring technology, it would remain invisible. "We believe that such techniques pose a substantial risk of creating unfair trading, if used by the wrong people," Kay says.
It's hard to know how real this threat is. Certainly micro-traders pay attention to latency, and sometimes even place their computers physically close to exchanges so they can reduce latency. And while it would be illegal to deliberately manipulate someone else's trades, it is probably okay to place a gazillion trades at the same time which -- as a side effect -- increases latency for everyone else. My guess is that this isn't a movie-plot threat, and that traders are trying lots of things along this line to give them a small advantage over everyone else.
Speaking at the Chaos Computer Club (CCC) Congress in Berlin on Tuesday, a pair of researchers demonstrated a start-to-finish means of eavesdropping on encrypted GSM cellphone calls and text messages, using only four sub-$15 telephones as network "sniffers," a laptop computer, and a variety of open source software.
The encryption is lousy:
Several of the individual pieces of this GSM hack have been displayed before. The ability to decrypt GSM's 64-bit A5/1 encryption was demonstrated last year at this same event, for instance. However, network operators then responded that the difficulty of finding a specific phone, and of picking the correct encrypted radio signal out of the air, made the theoretical decryption danger minimal at best.
As part of this background communication, GSM networks send out strings of identifying information, as well as essentially empty "Are you there?" messages. Empty space in these messages is filled with buffer bytes. Although a new GSM standard was put in place several years ago to turn these buffers into random bytes, they in fact remain largely identical today, under a much older standard.
This allows the researchers to predict with a high degree of probability the plain-text content of these encrypted system messages. This, combined with a two-terabyte table of precomputed encryption keys (a so-called rainbow table), allows a cracking program to discover the secret key to the session's encryption in about 20 seconds.
Did you notice that? A two-terabyte rainbow table. A few years ago, that kind of storage was largely theoretical. Now it's both cheap and portable.
Karsten Nohl's assessment of dozens of car makes and models found weaknesses in the way immobilisers are integrated with the rest of the car's electronics.
The immobiliser unit should be connected securely to the vehicle's electronic engine control unit, using the car's internal data network. But these networks often use weaker encryption than the immobiliser itself, making them easier to crack.
What's more, one manufacturer was even found to use the vehicle ID number as the supposedly secret key for this internal network. The VIN, a unique serial number used to identify individual vehicles, is usually printed on the car. "It doesn't get any weaker than that," Nohl says.
Yesterday, NIST announced the five hash functions to advance to the third (and final) round in the SHA-3 selection process: BLAKE, Grøstl, JH, Keccak, and Skein. Not really a surprise; my predictions -- which I did not publish -- listed ECHO instead of JH, but correctly identified the other four. (Most of the predictions I saw guessed BLAKE, Grøstl, Keccak, and Skein, but differed on the fifth.)
NIST will publish a report that explains its rationale for selecting the five it did.
Next is the Third SHA-3 Candidate Conference, which will probably be held in March 2012 in Washington, DC, in conjunction with FSE 2012. NIST will then pick a single algorithm to become SHA-3.
More information about Skein and the SHA-3 selection process, including lots of links, is here. Version 1.3 of the Skein paper, which discusses the new constant to defeat the Khovratovich-Nikolié-Rechberger attack, is here (description of the tweak here). And there's this new analysis of Skein.
And if you ordered a Skein polo shirt in September, they've been shipped.
Talk #1: "The Art of Forensic Warfare," Andy Clark. Riffing on Sun Tzu's The Art of War, Clark discussed the war -- the back and forth -- between cyber attackers and cyber forensics. This isn't to say that we're at war, but today's attacker tactics are increasingly sophisticated and warlike. Additionally, the pace is greater, the scale of impact is greater, and the subjects of attack are broader. To defend ourselves, we need to be equally sophisticated and -- possibly -- more warlike.
Clark drew parallels from some of the chapters of Sun Tzu's book combined with examples of the work at Bletchley Park. Laying plans: when faced with an attacker -- especially one of unknown capabilities, tactics, and motives -- it's important to both plan ahead and plan for the unexpected. Attack by stratagem: increasingly, attackers are employing complex and long-term strategies; defenders need to do the same. Energy: attacks increasingly start off simple and get more complex over time; while it's easier to defect primary attacks, secondary techniques tend to be more subtle and harder to detect. Terrain: modern attacks take place across a very broad range of terrain, including hardware, OSs, networks, communication protocols, and applications. The business environment under attack is another example of terrain, equally complex. The use of spies: not only human spies, but also keyloggers and other embedded eavesdropping malware. There's a great World War II double-agent story about Eddie Chapman, codenamed ZIGZAG.
Talk #2: "How the Allies Suppressed the Second Greatest Secret of World War II," David Kahn. This talk is from Kahn's article of the same name, published in the Oct 2010 issue of The Journal of Military History. The greatest secret of World War II was the atom bomb; the second greatest secret was that the Allies were reading the German codes. But while there was a lot of public information in the years after World War II about Japanese codebreaking and its value, there was almost nothing about German codebreaking. Kahn discussed how this information was suppressed, and how historians writing World War II histories never figured it out. No one imagined as large and complex an operation as Bletchley Park; it was the first time in history that something like this had ever happened. Most of Kahn's time was spent in a very interesting Q&A about the history of Bletchley Park and World War II codebreaking.
Talk #3: "DNSSec, A System for Improving Security of the Internet Domain Name System," Whitfield Diffie. Whit talked about three watersheds in modern communications security. The first was the invention of the radio. Pre-radio, the most common communications security device was the code book. This was no longer enough when radio caused the amount of communications to explode. In response, inventors took the research in Vigenère ciphers and automated them. This automation led to an explosion of designs and an enormous increase in complexity -- and the rise of modern cryptography.
The second watershed was shared computing. Before the 1960s, the security of computers was the physical security of computer rooms. Timesharing changed that. The result was computer security, a much harder problem than cryptography. Computer security is primarily the problem of writing good code. But writing good code is hard and expensive, so functional computer security is primarily the problem of dealing with code that isn't good. Networking -- and the Internet -- isn't just an expansion of computing capacity. The real difference is how cheap it is to set up communications connections. Setting up these connections requires naming: both IP addresses and domain names. Security, of course, is essential for this all to work; DNSSec is a critical part of that.
The third watershed is cloud computing, or whatever you want to call the general trend of outsourcing computation. Google is a good example. Every organization uses Google search all the time, which probably makes it the most valuable intelligence stream on the planet. How can you protect yourself? You can't, just as you can't whenever you hand over your data for storage or processing -- you just have to trust your outsourcer. There are two solutions. The first is legal: an enforceable contract that protects you and your data. The second is technical, but mostly theoretical: homomorphic encryption that allows you to outsource computation of data without having to trust that outsourcer.
Diffie's final point is that we're entering an era of unprecedented surveillance possibilities. It doesn't matter if people encrypt their communications, or if they encrypt their data in storage. As long as they have to give their data to other people for processing, it will be possible to eavesdrop on. Of course the methods will change, but the result will be an enormous trove of information about everybody.
The problem lies in the way that ASP.NET, Microsoft's popular Web framework, implements the AES encryption algorithm to protect the integrity of the cookies these applications generate to store information during user sessions. A common mistake is to assume that encryption protects the cookies from tampering so that if any data in the cookie is modified, the cookie will not decrypt correctly. However, there are a lot of ways to make mistakes in crypto implementations, and when crypto breaks, it usually breaks badly.
"We knew ASP.NET was vulnerable to our attack several months ago, but we didn't know how serious it is until a couple of weeks ago. It turns out that the vulnerability in ASP.NET is the most critical amongst other frameworks. In short, it totally destroys ASP.NET security," said Thai Duong, who along with Juliano Rizzo, developed the attack against ASP.NET.