Posts Tagged: Heartbleed

Aug 15

How Not to Start an Encryption Company

Probably the quickest way for a security company to prompt an overwhelmingly hostile response from the security research community is to claim that its products and services are “unbreakable” by hackers. The second-fastest way to achieve that outcome is to have that statement come from an encryption company CEO who served several years in federal prison for his role in running a $210 million Ponzi scheme. Here’s the story of a company that managed to accomplish both at the same time and is now trying to learn from (and survive) the experience.

unbreakabletothecoreThanks to some aggressive marketing, Irvine, Calif. based security firm Secure Channels Inc. (SCI) and its CEO Richard Blech have been in the news quite a bit lately — mainly Blech being quoted in major publications such as NBC NewsPolitico and USA Today  — talking about how his firm’s “unbreakable” encryption technology might have prevented some of the larger consumer data breaches that have come to light in recent months.

Blech’s company, founded in 2014 and with his money, has been challenging the security community to test its unbreakable claim in a cleverly unwinnable series of contests: At the Black Hat Security conference in Las Vegas last year, the company offered a new BMW to anyone who could unlock a digital file that was encrypted with its “patented” technology.

At the RSA Security Conference this year in San Francisco, SCI offered a $50,000 bounty to anyone who could prove the feat. When no one showed up to claim the prizes, SCI issued press releases crowing about a victory for its products.

Turns out, Blech knows a thing or two about complex, unwinnable games: He pleaded guilty in 2003 of civil and criminal fraud charges and sentenced to six years in U.S. federal prison for running an international Ponzi scheme.

Once upon a time, Blech was the CEO of Credit Bancorp. Ltd., an investment firm that induced its customers to deposit securities, cash, and other assets in trust by promising the impossible: a “custodial dividend” based on the profits of “risk-less” arbitrage. Little did the company’s investors know at the time, but CBL was running a classic Ponzi scheme: Taking cash and other assets from new investors to make payments to earlier ones, creating the impression of sizable returns, prosecutors said. Blech was sentenced to 72 months in prison and was released in 2007.



In April 2015, Lance James, a security researcher who has responded to challenges like the BMW and $50,000 prizes touted by SCI, began receiving taunting Tweets from Blech and Ross Harris, a particularly aggressive member of SCI’s sales team. That twitter thread (PDF) had started with WhiteHat Security CTO Jeremiah Grossman posting a picture of a $10,000 check that James was awarded from Telesign, a company that had put up the money after claiming that its StrongWebmail product was unhackable. Turns out, it wasn’t so strong; James and two other researchers found a flaw in the service and hacked the CEO’s email account. StrongWebmail never recovered from that marketing stunt.

James replied to Grossman that, coincidentally, he’d just received an email from SCI offering a BMW to anyone who could break the company’s crypto.

“When the crypto defeats you, we’ll give you a t-shirt, ‘Can’t touch this,’ you’ll wear it for a Tweet,” Blech teased James via Twitter on April 7, 2015. “Challenge accepted,” said James, owner of the security consultancy Unit 221b.  “Proprietary patented crypto is embarrassing in 2015. You should know better.”

As it happens, encrypting a file with your closed, proprietary encryption technology and then daring the experts to break it is not exactly the way you prove its strength or gain the confidence of the security community in general. Experts in encryption tend to subscribe to an idea known as Kerckhoff’s principle when deciding the relative strength and merits of any single cryptosystem: Put simply, a core tenet of Kerckhoff’s principle holds that “one ought to design systems under the assumption that the enemy will gain full familiarity with them.”

Translation: If you want people to take you seriously, put your encryption technology on full view of the security community (minus your private encryption keys), and let them see if they can break the system.

James said he let it go when SCI refused to talk seriously about sharing its cryptography solution, only to hear again this past weekend from SCI’s director of marketing Deirdre “Dee” Murphy on Twitter that his dismissal of their challenge proved he was “obsolete.” Murphy later deleted the tweets, but some of them are saved here.

Nate Cardozo, a staff attorney at the nonprofit digital rights group Electronic Frontier Foundation (EFF), said companies that make claims of unbreakable technologies very often are effectively selling snake oil unless they put their products up for peer review.

“They don’t disclose their settings or what modes their ciphers are running in,” Cardozo said. “They have a patent which is laughably vague about what it’s actually doing, and yet their chief marketing officer insults security researchers on Twitter saying, ‘If our stuff is so insecure, just break it.'”

Cardozo was quick to add that although there is no indication whatsoever that Secure Channels Inc. is engaging in any kind of fraud, they are engaged in “wildly irresponsible marketing.”

“And that’s not good for anyone,” he said. “In the cryptography community, the way you prove your system is secure is you put it up to peer review, you get third party audits, you publish specifications, etc. Apple’s not open-source and they do all of that. You can download the security white paper and see everything that iMessage is doing. The same is true for WhatsApp and PGP. When we see companies like Secure Channel treating crypto like a black box, that raises red flags. Any company making such claims deserves scrutiny, but because we can’t scrutinize the actual cryptography they’re using, we have to scrutinize the company itself.”


I couldn’t believe that any security company — let alone a firm that was trying to break into the encryption industry (a business that requires precision perhaps beyond any other, no less) — could make so many basic errors and miscalculations, so I started digging deeper into SCI and its origins. At the same time I requested and was granted an interview with Blech and his team. Continue reading →

Mar 15

OpenSSL Patch to Plug Severe Security Holes

The world is about to get another reminder about just how much of the Internet runs on technology maintained by a handful of coders working on a shoestring budget. OpenSSL — the software used by thousands of companies to encrypt online communications — is set to get a security makeover this week: The OpenSSL project said it plans to release new versions of its code to fix a number of security weaknesses, including some classified as “high” severity.

iheartOpenSSL is deployed at countless organizations, including at Web giants like Facebook, Google and Yahoo — as well as broadly across U.S. federal government networks. As its name suggests, OpenSSL implements Secure Sockets Layer (SSL) encryption (also known as “transport layer security” or TLS) for Web sites and associated networks, ensuring that the data cannot be read by untrusted parties.

The patch is likely to set off a mad scramble by security teams at organizations that rely on OpenSSL. That’s because security updates — particularly those added to open-source software like OpenSSL that anyone can view — give cybercriminals a road map toward finding out where the fixed vulnerabilities lie and insight into how to exploit those flaws.

Indeed, while the OpenSSL project plans to issue the updates on Thursday, Mar. 19, the organization isn’t pre-releasing any details about the fixes. Steve Marquess, a founding partner at the OpenSSL Software Foundation, said that information will only be shared in advance with the major operating system vendors.

“We’d like to let everyone know so they can be prepared and so forth, but we have been slowly driven to a pretty brutal policy of no [advance] disclosure,” Marquess said. “One of our main revenue sources is support contracts, and we don’t even give them advance notice.”

Advance notice helps not only defenders, but attackers as well. Last year, ne’er-do-wells pounced on Heartbleed, the nickname given to an extremely critical flaw in OpenSSL that allowed anyone to extract passwords, cookies and other sensitive data from servers that were running vulnerable versions of OpenSSL. This Heartbleed disclosure timeline explains a great deal about how that process unfolded in a less-than-ideal manner. Continue reading →

Nov 14

Microsoft Releases Emergency Security Update

Microsoft today deviated from its regular pattern of releasing security updates on the second Tuesday of each month, pushing out an emergency patch to plug a security hole in all supported versions of Windows. The company urged Windows users to install the update as quickly as possible, noting that miscreants already are exploiting the weaknesses to launch targeted attacks.

brokenwindowsThe update (MS14-068) addresses a bug in a Windows component called Microsoft Windows Kerberos KDC, which handles authenticating Windows PCs on a local network. It is somewhat less of a problem for Windows home users (it is only rated critical for server versions of Windows) but it poses a serious threat to organizations. According to security vendor Shavlik, the flaw allows an attacker to elevate domain user account privileges to those of the domain administrator account.

“The attacker could forge a Kerberos Ticket and send that to the Kerberos KDC which claims the user is a domain administrator,” writes Chris Goettl, product manager with Shavlik. “From there the attacker can impersonate any domain accounts, add themselves to any group, install programs, view\change\delete date, or create any new accounts they wish.  This could allow the attacker to then compromise any computer in the domain, including domain controllers.  If there is a silver lining in this one it is in the fact that the attacker must have a valid domain user account to exploit the vulnerability, but once they have done so, they have the keys to the kingdom.”

The patch is one of two that Microsoft had expected to release on Patch Tuesday earlier this month, but unexpectedly pulled at the last moment.  “This is pretty severe and definitely explains why Microsoft only delayed the release and did not pull it from the November Patch Tuesday release all together,” Goettl said. Continue reading →

Oct 14

Bugzilla Zero-Day Exposes Zero-Day Bugs

A previously unknown security flaw in Bugzilla — a popular online bug-tracking tool used by Mozilla and many of the open source Linux distributions — allows anyone to view detailed reports about unfixed vulnerabilities in a broad swath of software. Bugzilla is expected today to issue a fix for this very serious weakness, which potentially exposes a veritable gold mine of vulnerabilities that would be highly prized by cyber criminals and nation-state actors.

The Bugzilla mascot.

The Bugzilla mascot.

Multiple software projects use Bugzilla to keep track of bugs and flaws that are reported by users. The Bugzilla platform allows anyone to create an account that can be used to report glitches or security issues in those projects. But as it turns out, that same reporting mechanism can be abused to reveal sensitive information about as-yet unfixed security holes in software packages that rely on Bugzilla.

A developer or security researcher who wants to report a flaw in Mozilla Firefox, for example, can sign up for an account at Mozilla’s Bugzilla platform. Bugzilla responds automatically by sending a validation email to the address specified in the signup request. But recently, researchers at security firm Check Point Software Technologies discovered that it was possible to create Bugzilla user accounts that bypass that validation process.

“Our exploit allows us to bypass that and register using any email we want, even if we don’t have access to it, because there is no validation that you actually control that domain,” said Shahar Tal, vulnerability research team leader for Check Point. “Because of the way permissions work on Bugzilla, we can get administrative privileges by simply registering using an address from one of the domains of the Bugzilla installation owner. For example, we registered as, and suddenly we could see every private bug under Firefox and everything else under Mozilla.”

Continue reading →

Apr 14

‘Heartbleed’ Bug Exposes Passwords, Web Site Encryption Keys

Researchers have uncovered an extremely critical vulnerability in recent versions of OpenSSL, a technology that allows millions of Web sites to encrypt communications with visitors. Complicating matters further is the release of a simple exploit that can be used to steal usernames and passwords from vulnerable sites, as well as private keys that sites use to encrypt and decrypt sensitive data.




“The Heartbleed bug allows anyone on the Internet to read the memory of the systems protected by the vulnerable versions of the OpenSSL software. This compromises the secret keys used to identify the service providers and to encrypt the traffic, the names and passwords of the users and the actual content. This allows attackers to eavesdrop communications, steal data directly from the services and users and to impersonate services and users.”

An advisory from Carnegie Mellon University’s CERT notes that the vulnerability is present in sites powered by OpenSSL versions 1.0.1 through 1.0.1f. According to Netcraft, a company that monitors the technology used by various Web sites, more than a half million sites are currently vulnerable. As of this morning, that included, and — ironically — the Web site of This list at Github appears to be a relatively recent test for the presence of this vulnerability in the top 1,000 sites as indexed by Web-ranking firm Alexa.

An easy-to-use exploit that is being widely traded online allows an attacker to retrieve private memory of an application that uses the vulnerable OpenSSL “libssl” library in chunks of 64kb at a time. As CERT notes, an attacker can repeatedly leverage the vulnerability to retrieve as many 64k chunks of memory as are necessary to retrieve the intended secrets.

Jamie Blasco, director of AlienVault Labs, said this bug has “epic repercussions” because not only does it expose passwords and cryptographic keys, but in order to ensure that attackers won’t be able to use any data that does get compromised by this flaw, affected providers have to replace the private keys and certificates after patching the vulnerable OpenSSL service for each of the services that are using the OpenSSL library [full disclosure: AlienVault is an advertiser on this blog].

It is likely that a great many Internet users will be asked to change their passwords this week (I hope). Meantime, companies and organizations running vulnerable versions should upgrade to the latest iteration of OpenSSL – OpenSSL 1.0.1g — as quickly as possible.

Update, 2:26 p.m.: It appears that this Github page allows visitors to test whether a site is vulnerable to this bug (hat tip to Sandro Süffert). For more on what you can do you to protect yourself from this vulnerability, see this post.