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breaches

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NordVPN Breached

There was a successful attack against NordVPN:

Based on the command log, another of the leaked secret keys appeared to secure a private certificate authority that NordVPN used to issue digital certificates. Those certificates might be issued for other servers in NordVPN’s network or for a variety of other sensitive purposes. The name of the third certificate suggested it could also have been used for many different sensitive purposes, including securing the server that was compromised in the breach.

The revelations came as evidence surfaced suggesting that two rival VPN services, TorGuard and VikingVPN, also experienced breaches that leaked encryption keys. In a statement, TorGuard said a secret key for a transport layer security certificate for *.torguardvpnaccess.com was stolen. The theft happened in a 2017 server breach. The stolen data related to a squid proxy certificate.

TorGuard officials said on Twitter that the private key was not on the affected server and that attackers “could do nothing with those keys.” Monday’s statement went on to say TorGuard didn’t remove the compromised server until early 2018. TorGuard also said it learned of VPN breaches last May, “and in a related development we filed a legal complaint against NordVPN.”

The breach happened nineteen months ago, but the company is only just disclosing it to the public. We don’t know exactly what was stolen and how it affects VPN security. More details are needed.

VPNs are a shadowy world. We use them to protect our Internet traffic when we’re on a network we don’t trust, but we’re forced to trust the VPN instead. Recommendations are hard. NordVPN’s website says that the company is based in Panama. Do we have any reason to trust it at all?

I’m curious what VPNs others use, and why they should be believed to be trustworthy.

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The Importance of Protecting Cybersecurity Whistleblowers

Interesting essay arguing that we need better legislation to protect cybersecurity whistleblowers.

Congress should act to protect cybersecurity whistleblowers because information security has never been so important, or so challenging. In the wake of a barrage of shocking revelations about data breaches and companies mishandling of customer data, a bipartisan consensus has emerged in support of legislation to give consumers more control over their personal information, require companies to disclose how they collect and use consumer data, and impose penalties for data breaches and misuse of consumer data. The Federal Trade Commission (“FTC”) has been held out as the best agency to implement this new regulation. But for any such legislation to be effective, it must protect the courageous whistleblowers who risk their careers to expose data breaches and unauthorized use of consumers’ private data.

Whistleblowers strengthen regulatory regimes, and cybersecurity regulation would be no exception. Republican and Democratic leaders from the executive and legislative branches have extolled the virtues of whistleblowers. High-profile cases abound. Recently, Christopher Wylie exposed Cambridge Analytica’s misuse of Facebook user data to manipulate voters, including its apparent theft of data from 50 million Facebook users as part of a psychological profiling campaign. Though additional research is needed, the existing empirical data reinforces the consensus that whistleblowers help prevent, detect, and remedy misconduct. Therefore it is reasonable to conclude that protecting and incentivizing whistleblowers could help the government address the many complex challenges facing our nation’s information systems.

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Congressional Report on the 2017 Equifax Data Breach

The US House of Representatives Committee on Oversight and Government Reform has just released a comprehensive report on the 2017 Equifax hack. It’s a great piece of writing, with a detailed timeline, root cause analysis, and lessons learned. Lance Spitzner also commented on this.

Here is my testimony before before the House Subcommittee on Digital Commerce and Consumer Protection last November.

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Your Personal Data is Already Stolen

In an excellent blog post, Brian Krebs makes clear something I have been saying for a while:

Likewise for individuals, it pays to accept two unfortunate and harsh realities:

Reality #1: Bad guys already have access to personal data points that you may believe should be secret but which nevertheless aren’t, including your credit card information, Social Security number, mother’s maiden name, date of birth, address, previous addresses, phone number, and yes ­ even your credit file.

Reality #2: Any data point you share with a company will in all likelihood eventually be hacked, lost, leaked, stolen or sold ­ usually through no fault of your own. And if you’re an American, it means (at least for the time being) your recourse to do anything about that when it does happen is limited or nil.

[…]

Once you’ve owned both of these realities, you realize that expecting another company to safeguard your security is a fool’s errand, and that it makes far more sense to focus instead on doing everything you can to proactively prevent identity thieves, malicious hackers or other ne’er-do-wells from abusing access to said data.

His advice is good.

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Cybersecurity Insurance

Good article about how difficult it is to insure an organization against Internet attacks, and how expensive the insurance is.

Companies like retailers, banks, and healthcare providers began seeking out cyberinsurance in the early 2000s, when states first passed data breach notification laws. But even with 20 years’ worth of experience and claims data in cyberinsurance, underwriters still struggle with how to model and quantify a unique type of risk.

“Typically in insurance we use the past as prediction for the future, and in cyber that’s very difficult to do because no two incidents are alike,” said Lori Bailey, global head of cyberrisk for the Zurich Insurance Group. Twenty years ago, policies dealt primarily with data breaches and third-party liability coverage, like the costs associated with breach class-action lawsuits or settlements. But more recent policies tend to accommodate first-party liability coverage, including costs like online extortion payments, renting temporary facilities during an attack, and lost business due to systems failures, cloud or web hosting provider outages, or even IT configuration errors.

In my new book — out in September — I write:

There are challenges to creating these new insurance products. There are two basic models for insurance. There’s the fire model, where individual houses catch on fire at a fairly steady rate, and the insurance industry can calculate premiums based on that rate. And there’s the flood model, where an infrequent large-scale event affects large numbers of people — but again at a fairly steady rate. Internet+ insurance is complicated because it follows neither of those models but instead has aspects of both: individuals are hacked at a steady (albeit increasing) rate, while class breaks and massive data breaches affect lots of people at once. Also, the constantly changing technology landscape makes it difficult to gather and analyze the historical data necessary to calculate premiums.

BoingBoing article.

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Facebook and Cambridge Analytica

In the wake of the Cambridge Analytica scandal, news articles and commentators have focused on what Facebook knows about us. A lot, it turns out. It collects data from our posts, our likes, our photos, things we type and delete without posting, and things we do while not on Facebook and even when we’re offline. It buys data about us from others. And it can infer even more: our sexual orientation, political beliefs, relationship status, drug use, and other personality traits — even if we didn’t take the personality test that Cambridge Analytica developed.

But for every article about Facebook’s creepy stalker behavior, thousands of other companies are breathing a collective sigh of relief that it’s Facebook and not them in the spotlight. Because while Facebook is one of the biggest players in this space, there are thousands of other companies that spy on and manipulate us for profit.

Harvard Business School professor Shoshana Zuboff calls it “surveillance capitalism.” And as creepy as Facebook is turning out to be, the entire industry is far creepier. It has existed in secret far too long, and it’s up to lawmakers to force these companies into the public spotlight, where we can all decide if this is how we want society to operate and — if not — what to do about it.

There are 2,500 to 4,000 data brokers in the United States whose business is buying and selling our personal data. Last year, Equifax was in the news when hackers stole personal information on 150 million people, including Social Security numbers, birth dates, addresses, and driver’s license numbers.

You certainly didn’t give it permission to collect any of that information. Equifax is one of those thousands of data brokers, most of them you’ve never heard of, selling your personal information without your knowledge or consent to pretty much anyone who will pay for it.

Surveillance capitalism takes this one step further. Companies like Facebook and Google offer you free services in exchange for your data. Google’s surveillance isn’t in the news, but it’s startlingly intimate. We never lie to our search engines. Our interests and curiosities, hopes and fears, desires and sexual proclivities, are all collected and saved. Add to that the websites we visit that Google tracks through its advertising network, our Gmail accounts, our movements via Google Maps, and what it can collect from our smartphones.

That phone is probably the most intimate surveillance device ever invented. It tracks our location continuously, so it knows where we live, where we work, and where we spend our time. It’s the first and last thing we check in a day, so it knows when we wake up and when we go to sleep. We all have one, so it knows who we sleep with. Uber used just some of that information to detect one-night stands; your smartphone provider and any app you allow to collect location data knows a lot more.

Surveillance capitalism drives much of the internet. It’s behind most of the “free” services, and many of the paid ones as well. Its goal is psychological manipulation, in the form of personalized advertising to persuade you to buy something or do something, like vote for a candidate. And while the individualized profile-driven manipulation exposed by Cambridge Analytica feels abhorrent, it’s really no different from what every company wants in the end. This is why all your personal information is collected, and this is why it is so valuable. Companies that can understand it can use it against you.

None of this is new. The media has been reporting on surveillance capitalism for years. In 2015, I wrote a book about it. Back in 2010, the Wall Street Journal published an award-winning two-year series about how people are tracked both online and offline, titled “What They Know.”

Surveillance capitalism is deeply embedded in our increasingly computerized society, and if the extent of it came to light there would be broad demands for limits and regulation. But because this industry can largely operate in secret, only occasionally exposed after a data breach or investigative report, we remain mostly ignorant of its reach.

This might change soon. In 2016, the European Union passed the comprehensive General Data Protection Regulation, or GDPR. The details of the law are far too complex to explain here, but some of the things it mandates are that personal data of EU citizens can only be collected and saved for “specific, explicit, and legitimate purposes,” and only with explicit consent of the user. Consent can’t be buried in the terms and conditions, nor can it be assumed unless the user opts in. This law will take effect in May, and companies worldwide are bracing for its enforcement.

Because pretty much all surveillance capitalism companies collect data on Europeans, this will expose the industry like nothing else. Here’s just one example. In preparation for this law, PayPal quietly published a list of over 600 companies it might share your personal data with. What will it be like when every company has to publish this sort of information, and explicitly explain how it’s using your personal data? We’re about to find out.

In the wake of this scandal, even Mark Zuckerberg said that his industry probably should be regulated, although he’s certainly not wishing for the sorts of comprehensive regulation the GDPR is bringing to Europe.

He’s right. Surveillance capitalism has operated without constraints for far too long. And advances in both big data analysis and artificial intelligence will make tomorrow’s applications far creepier than today’s. Regulation is the only answer.

The first step to any regulation is transparency. Who has our data? Is it accurate? What are they doing with it? Who are they selling it to? How are they securing it? Can we delete it? I don’t see any hope of Congress passing a GDPR-like data protection law anytime soon, but it’s not too far-fetched to demand laws requiring these companies to be more transparent in what they’re doing.

One of the responses to the Cambridge Analytica scandal is that people are deleting their Facebook accounts. It’s hard to do right, and doesn’t do anything about the data that Facebook collects about people who don’t use Facebook. But it’s a start. The market can put pressure on these companies to reduce their spying on us, but it can only do that if we force the industry out of its secret shadows.

This essay previously appeared on CNN.com.

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Jumping Air Gaps

Nice profile of Mordechai Guri, who researches a variety of clever ways to steal data over air-gapped computers.

Guri and his fellow Ben-Gurion researchers have shown, for instance, that it’s possible to trick a fully offline computer into leaking data to another nearby device via the noise its internal fan generates, by changing air temperatures in patterns that the receiving computer can detect with thermal sensors, or even by blinking out a stream of information from a computer hard drive LED to the camera on a quadcopter drone hovering outside a nearby window. In new research published today, the Ben-Gurion team has even shown that they can pull data off a computer protected by not only an air gap, but also a Faraday cage designed to block all radio signals.

Here’s a page with all the research results.

BoingBoing post.

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Security Breaches Don’t Affect Stock Price

Interesting research: “Long-term market implications of data breaches, not,” by Russell Lange and Eric W. Burger.

Abstract: This report assesses the impact disclosure of data breaches has on the total returns and volatility of the affected companies’ stock, with a focus on the results relative to the performance of the firms’ peer industries, as represented through selected indices rather than the market as a whole. Financial performance is considered over a range of dates from 3 days post-breach through 6 months post-breach, in order to provide a longer-term perspective on the impact of the breach announcement.

Key findings:

  • While the difference in stock price between the sampled breached companies and their peers was negative (1.13%) in the first 3 days following announcement of a breach, by the 14th day the return difference had rebounded to + 0.05%, and on average remained positive through the period assessed.

  • For the differences in the breached companies’ betas and the beta of their peer sets, the differences in the means of 8 months pre-breach versus post-breach was not meaningful at 90, 180, and 360 day post-breach periods.

  • For the differences in the breached companies’ beta correlations against the peer indices pre- and post-breach, the difference in the means of the rolling 60 day correlation 8 months pre- breach versus post-breach was not meaningful at 90, 180, and 360 day post-breach periods.

  • In regression analysis, use of the number of accessed records, date, data sensitivity, and malicious versus accidental leak as variables failed to yield an R2 greater than 16.15% for response variables of 3, 14, 60, and 90 day return differential, excess beta differential, and rolling beta correlation differential, indicating that the financial impact on breached companies was highly idiosyncratic.

  • Based on returns, the most impacted industries at the 3 day post-breach date were U.S. Financial Services, Transportation, and Global Telecom. At the 90 day post-breach date, the three most impacted industries were U.S. Financial Services, U.S. Healthcare, and Global Telecom.

The market isn’t going to fix this. If we want better security, we need to regulate the market.

Note: The article is behind a paywall. An older version is here. A similar article is here.

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