Apple Changes Policy In China

Apple Inc has started the processing of keeping the personal data of some Chinese users on servers in mainland China, marking the first time the tech giant is storing user data on Chinese soil.

The storage of user data in China represents a departure from the policies of some technology companies, notably Google Inc, which has long refused to build data centers in China due to censorship and privacy concerns.

Apple said the move was part of an effort to improve the speed and reliability of its iCloud service, which lets users store pictures, e-mail and other data. Positioning data centers as close to customers as possible means faster service.

The data will be kept on servers provided by China Telecom Corp Ltd, the country’s third-largest wireless carrier, Apple said in a statement.

“Apple takes user security and privacy very seriously,” it said. “We have added China Telecom to our list of data center providers to increase bandwidth and improve performance for our customers in mainland china. All data stored with our providers is encrypted. China Telecom does not have access to the content.”

A source with knowledge of the situation said the encryption keys for Apple’s data on China Telecom servers would be stored offshore and not made available to China Telecom.

Apple has said it has devised encryption systems for services such as iMessage that even Apple itself cannot unlock. But some experts expressed scepticism that Apple would be able to withhold user data in the event of a government request.

“If they’re making out that the data is protected and secure that’s a little disingenuous because if they want to operate a business here, that’d have to comply with demands from the authorities,” said Jeremy Goldkorn, director of Danwei.com, a research firm focused on Chinese media, internet and consumers.

“On the other hand if they don’t store Chinese user data on a Chinese server they’re basically risking a crackdown from the authorities.”

Goldkorn added that data stored in the United States is subject to similar U.S. regulations where the government can use court orders to demand private data.

A spokesman for China Telecom declined to comment.

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OpenSSL Gets Updated

OPENSSL, the web security layer at the center of the Heartbleed vulnerability, has been issued with a further nine critical patches.

While none are as serious as Heartbleed, patching is recommended for all users according to an advisory released today. The vulnerabilities stem from various security research teams around the web including Google, Logmein and Codenomicom, based on their reports during June and July of this year.

Among the more interesting fixes involves a flaw in the ClientHello message process. If a ClientHello message is badly fragmented, it is vulnerable to a man-in-the-middle attack which could be used to force the server to downgrade itself to the TLS 1.0 protocol, a fifteen year old and therefore pre-Heartbleed patch variant.

Other reports include memory leaks caused by denial of service attacks (DoS) and conversely, crashes caused by an attempt to free up the same portions of memory twice.

OpenSSL now has two full time coders as a result of investment by a consortium of Internet industry companies to form the Core Infrastructure Initiative, a not-for-profit group administered by the Linux Foundation. The Initiative was set up in the wake of Heartbleed, as the industry vowed to ensure such a large hole would never be left unplugged again.

While OpenSSL is used by a large number of encrypted sites, there are a number of forks of the project including LibreSSL and the recently launched Google BoringSSL.

Google recently announced that it would be lowering the page rankings of unencrypted pages in its search results as an added security measure.

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Many Websites Still Exposed

The world’s top 1,000 websites have been updated to protect their servers against the “Heartbleed” vulnerability, but up to 2% of the top million remained unprotected as of last week, according to a California security firm.

On Thursday, Menifee, Calif.-based Sucuri Security scanned the top 1 million websites as ranked by Alexa Internet, a subsidiary of Amazon that collects Web traffic data.

Of the top 1,000 Alexa sites, all were either immune or had been patched with the newest OpenSSL libraries, confirmed Daniel Cid, Sucuri’s chief technology officer, in a Sunday email.

Heartbleed, the nickname for the flaw in OpenSSL, an open-source cryptographic library that enables SSL (Secure Sockets Layer) or TLS (Transport Security Layer) encryption, was discovered independently by Neel Mehta, a Google security engineer, and researchers from security firm Codenomicon earlier this month.

The bug had been introduced in OpenSSL in late 2011.

Because of OpenSSL’s widespread use by websites — many relied on it to encrypt traffic between their servers and customers — and the very stealthy nature of its exploit, security experts worried that cyber criminals either had, or could, capture usernames, passwords,\ and even encryption keys used by site servers.

The OpenSSL project issued a patch for the bug on April 7, setting off a rush to patch the software on servers and in some client operating systems.

The vast majority of vulnerable servers had been patched as of April 17, Sucuri said in a blog postthat day.

While all of the top 1,000 sites ranked by Alexa were immune to the exploit by then, as Sucuri went down the list and scanned smaller sites, it found an increasing number still vulnerable. Of the top 10,000, 0.53% were vulnerable, as were 1.5% of the top 100,000 and 2% of the top 1 million.

Other scans found similar percentages of websites open to attack: On Friday, San Diego-based Websense said about 1.6% of the top 50,000 sites as ranked by Alexa remained vulnerable.

Since it’s conceivable that some sites’ encryption keys have been compromised, security experts urged website owners to obtain new SSL certificates and keys, and advised users to be wary of browsing to sites that had not done so.

Sucuri’s scan did not examine sites to see whether they had been reissued new certificates, but Cid said that another swing through the Web, perhaps this week, would. “I bet the results will be much much worse on that one,” Cid said.

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Heartbleed Hits Oracle

Oracle issued a comprehensive list of its software that may or may not be impacted by the OpenSSL (secure sockets layer) vulnerability known as Heartbleed, while warning that no fixes are yet available for some likely affected products.

The list includes well over 100 products that appear to be in the clear, either because they never used the version of OpenSSL reported to be vulnerable to Heartbleed, or because they don’t use OpenSSL at all.

However, Oracle is still investigating whether another roughly 20 products, including MySQL Connector/C++, Oracle SOA Suite and Nimbula Director, are vulnerable.

Oracle determined that seven products are vulnerable and is offering fixes. These include Communications Operation Monitor, MySQL Enterprise Monitor, MySQL Enterprise Server 5.6, Oracle Communications Session Monitor, Oracle Linux 6, Oracle Mobile Security Suite and some Solaris 11.2 implementations.

Another 14 products are likely to be vulnerable, but Oracle doesn’t have fixes for them yet, according to the post. These include BlueKai, Java ME and MySQL Workbench.

Users of Oracle’s growing family of cloud services may also be able to breath easy. “It appears that both externally and internally (private) accessible applications hosted in Oracle Cloud Data Centers are currently not at risk from this vulnerability,” although Oracle continues to investigate, according to the post.

Heartbleed, which was revealed by researchers last week, can allow attackers who exploit it to steal information on systems thought to be protected by OpenSSL encryption. A fix for the vulnerable version of OpenSSL has been released and vendors and IT organizations are scrambling to patch their products and systems.

Observers consider Heartbleed one of the most serious Internet security vulnerabilities in recent times.

Meanwhile, this week Oracle also shipped 104 patches as part of its regular quarterly release.

The patch batch includes security fixes for Oracle database 11g and 12c, Fusion Middleware 11g and 12c, Fusion Applications, WebLogic Server and dozens of other products. Some 37 patches target Java SE alone.

A detailed rundown of the vulnerabilities’ relative severity has been posted to an official Oracle blog.

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Lavaboom Offers To Encrypt

A new webmail service named Lavaboom promises to provide easy-to-use email encryption without ever learning its users’ private encryption keys or message contents.

Lavaboom, based in Germany and founded by Felix MA1/4ller-Irion, is named after Lavabit, the now defunct encrypted email provider believed to have been used by former NSA contractor Edward Snowden. Lavabit decided to shut down its operations in August in response to a U.S. government request for its SSL private key that would have allowed the government to decrypt all user emails.

Lavaboom designed its system for end-to-end encryption, meaning that only users will be in possession of the secret keys needed to decrypt the messages they receive from others. The service will only act as a carrier for already encrypted emails.

Lavaboom calls this feature “zero-knowledge privacy” and implemented it in a way that allows emails to be encrypted and decrypted locally using JavaScript code inside users’ browsers instead of its own servers.

The goal of this implementation is to protect against upstream interception of email traffic as it travels over the Internet and to prevent Lavaboom to produce plain text emails or encryption keys if the government requests them. While this would protect against some passive data collection efforts by intelligence agencies like the NSA, it probably won’t protect against other attack techniques and exploits that such agencies have at their disposal to obtain data from computers and browsers after it was decrypted.

Security researchers have yet to weigh in on the strength of Lavaboom’s implementation. The service said on its website that it considers making parts of the code open source and that it has a small budget for security audits if any researchers are interested.

Those interested in trying out the service can request to be included in its beta testing period, scheduled to start in about two weeks.

Free Lavaboom accounts will come with 250MB of storage space and will use two-way authentication based on the public-private keypair and a password. A premium subscription will cost a!8 (around US$11) per month and will provide users with 1GB of storage space and a three-factor authentication option.

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Virtru Goes Office 365

Virtru has added Microsoft’s Office 365 and Outlook Desktop services to its growing list of compatible email platforms available on its encryption product.

The company, headquartered in Washington, D.C. and launched in January, is targeting people using major email providers who want stronger privacy controls for more secure communication.

The service is designed to be easy to use for end users who may not have the technical gumption to set up PGP (Pretty Good Privacy), a standard for signing and encrypting content.

Virtru is compatible with most major webmail providers, including Google’s Gmail, Yahoo’s Mail and Microsoft’s Outlook webmail, which replaced Hotmail.

Emails sent using Virtru through those services would look like gibberish, providing a greater degree of privacy. Law enforcement or other entities would not be able to read the content unless they could obtain the key.

Virtru uses a browser extension to encrypt email on a person’s computer or mobile device. The content is decrypted after recipients receive a key, which is distributed by Virtru’s centralized key management server.

Although Virtru handles key management, the company is working on a product that would allow that task to be managed on-site for users, as some administrators would be uncomfortable with another entity managing their keys.

Virtru has said it put aside funds to contest government orders such as a National Security Letter or law enforcement request that are not based on a standard of probable cause.

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Did Sears Suffer A Data Breach?

Sears Holdings Corp acknowledged it has launched an investigation to determine whether it was the victim of a security breach, following Target Corp’s revelation at the end of last year that it had suffered an unprecedented cyber attack.

“There have been rumors and reports throughout the retail industry of security incidents at various retailers and we are actively reviewing our systems to determine if we have been a victim of a breach,” Sears spokesman Howard Riefs said in a statement on Friday.

“We have found no information based on our review of our systems to date indicating a breach,” he added.

He did not say when the operator of Sears department stores and Kmart discount stores had begun the investigation or provide other information about the probe.

Sears Holdings Corp operates nearly 2,500 retail stores in the United States and Canada.

Bloomberg News reported on Friday that the U.S. Secret Service was investigating a possible secret breach at Sears, citing a person familiar with the investigation. The report did not identify that source by name.

The Bloomberg report said that its source did not disclose details about the scope or timing of the suspected breach.

A spokesman for the U.S. Secret Service declined comment when Reuters asked if the agency was investigating a possible breach at Sears.

The Secret Service is leading the U.S. government’s investigation into last year’s attack on Target, which the company has said led to the theft of some 40 million payment card numbers as well as another 70 million pieces of personal data.

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Was Dropbox Really Hacked?

Dropbox suffered a major outage over the weekend.

In one of the more bizarre recent incidents, after the service went down on Friday evening a group of hackers claimed to have infiltrated the service and compromised its servers.

However, on the Dropbox blog, Dropbox VP of engineering Ardita Ardwarl told users that hackers were not to blame.

Ardwari said, “On Friday evening we began a routine server upgrade. Unfortunately, a bug installed this upgrade on several active servers, which brought down the entire service. Your files were always safe, and despite some reports, no hacking or DDOS attack was involved.”

The fault occurred when a bug in an upgrade script caused an operating system upgrade to be triggered on several live machines, rendering them inoperative. Although the fault was rectified in three hours, the knock-on effects led to problems that lasted through the weekend for some users.

Dropbox has assured users that there are no further problems and that all users should now be back online. It said that at no point were files in danger, adding that the affected machines didn’t host any user data. In other words, the “hackers” weren’t hackers at all, but attention seeking trolls.

Dropbox claims to have over 200 million users, many of which it has acquired through strategic partnerships with device manufacturers offering free storage with purchases.

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The company is looking forward to an initial public offering (IPO) on the stock market, so the timing of such a major outage could not be worse. Dropbox, which includes Bono and The Edge from U2 amongst its investors, has recently enhanced its business offering to appeal to enterprise clients, and such a loss of uptime could affect its ability to attract customers.

NSA Developing System To Crack Encryption

The U.S. National Security Agency is working to develop a computer that could ultimately break most encryption programs, whether they are used to protect other nations’ spying programs or consumers’ bank accounts, according to a report by the Washington Post.

The report, which the newspaper said was based on documents leaked by former NSA contractor Edward Snowden, comes amid continuing controversy over the spy agency’s program to collect the phone records Internet communications of private citizens.

In its report, The Washington Post said that the NSA is trying to develop a so-called “quantum computer” that could be used to break encryption codes used to cloak sensitive information.

Such a computer, which would be able to perform several calculations at once instead of in a single stream, could take years to develop, the newspaper said. In addition to being able to break through the cloaks meant to protect private data, such a computer would have implications for such fields as medicine, the newspaper reported.

The research is part of a $79.7 million research program called “Penetrating Hard Targets,” the newspaper said. Other, non-governmental researchers are also trying to develop quantum computers, and it is not clear whether the NSA program lags the private efforts or is ahead of them.

Snowden, living in Russia with temporary asylum, last year leaked documents he collected while working for the NSA. The United States has charged him with espionage, and more charges could follow.

His disclosures have sparked a debate over how much leeway to give the U.S. government in gathering information to protect Americans from terrorism, and have prompted numerous lawsuits.

Last week, a federal judge ruled that the NSA’s collection of phone call records is lawful, while another judge earlier in December questioned the program’s constitutionality. The issue is now more likely to move before the U.S. Supreme Court.

On Thursday, the editorial board of the New York Times said that the U.S. government should grant Snowden clemency or a plea bargain, given the public value of revelations over the National Security Agency’s vast spying programs.

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Cryptolocker Infects 250K Systems

DELL’s security research team has revealed that a new form of ransomware, dubbed “Cryptolocker” has managed to infect up to 250,000 devices, stealing almost a million dollars in Bitcoins.

“Based on the presented evidence, researchers estimate that 200,000 to 250,000 systems were infected globally in the first 100 days of the CryptoLocker threat,” Dell announced in a Secureworks post.

The firm worked out that if the Cryptolocker ransomware threat actors had sold its 1,216 total Bitcoins (BTC) that they collected from September this year, immediately upon receiving them, they would have earned nearly $380,000.

“If they elected to hold these ransoms, they would be worth nearly $980,000 as of this publication based on the current weighted price of $804/BTC,” Dell said.

Cryptolocker is unique when compared against your average ransomware. Instead of using a custom cryptographic implementation like many other malware families, Cryptolocker uses third-party certified cryptography offered by Microsoft’s CryptoAPI.

“By using a sound implementation and following best practices, the malware authors have created a robust program that is difficult to circumvent,” Dell said.

Conventionally, ransomware prevents victims from using their computers normally and uses social engineering to convince them that failing to follow the malware authors’ instructions will lead to real-world consequences. These consequences, such as owing a fine or facing arrest and prosecution, are presented as being the result of a fabricated indiscretion such as pirating music or downloading illegal pornography.

“Victims of traditional forms of ransomware could ignore the demands and use security software to unlock the system and remove the offending malware,” Dell explained. “Cryptolocker changes this dynamic by aggressively encrypting files on the victim’s system and returning control of the files to the victim only after the ransom is paid.”

Dell said that the earliest samples of Cryptolocker appear to have been released on 5 September this year. However, details about its initial distribution phase are unclear.

“It appears the samples were downloaded from a compromised website located in the United States, either by a version of Cryptolocker that has not been analysed as of this publication, or by a custom downloader created by the same authors,” Dell added.

Dell seems to think that early versions of Cryptolocker were distributed through spam emails targeting business professionals as opposed to home internet users, with the lure often being a ‘consumer complaint’ against the email recipient or their organisation.

Attached to these emails would be a ZIP archive with a random alphabetical filename containing 13 to 17 characters, containing a single executable with the same filename as the ZIP archive but with an EXE extension, so keep your eye out for emails that fit this description.

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