Subject: [dispatch] Link to Threat Level article on failing of hop-by-hop encryption in financial networks

From: Dean Willis <[email-masked]>
Date: Wed, 15 Apr 2009 13:45:12 -0500

See:

http://blog.wired.com/27bstroke6/2009/04/pins.html

The most relevant text:

> Sartin says the latter attacks involve a device called a hardware  
> security module (HSM), a security appliance that sits on bank  
> networks and on switches through which PIN numbers pass on their way  
> from an ATM or retail cash register to the card issuer. The module  
> is a tamper-resistant device that provides a secure environment for  
> certain functions, such as encryption and decryption, to occur.
>
> According to the payment-card industry, or PCI, standards for credit  
> card transaction security, PIN numbers are supposed to be encrypted  
> in transit, which should theoretically protect them if someone  
> intercepts the data. The problem, however, is that a PIN must pass  
> through multiple HSMs across multiple bank networks en route to the  
> customer's bank. These HSMs are configured and managed differently,  
> some by contractors not directly related to the bank. At every  
> switching point, the PIN must be decrypted, then re-encrypted with  
> the proper key for the next leg in its journey, which is itself  
> encrypted under a master key that is generally stored in the module  
> or in the module's application programming interface, or API.
>
> "Essentially, the thief tricks the HSM into providing the encryption  
> key," says Sartin. "This is possible due to poor configuration of  
> the HSM or vulnerabilities created from having bloated functions on  
> the device."

I suspect there should be strong lessons here for those of us inclined  
to trust intermediary nodes to engage in cryptographic operations that  
might expose our sensitive bits.

SBCs that decrypt/re-encrypt or un-sign/re-sign data are not defensive  
systems. Rather, they are needless points of vulnerability that can be  
excluded from the threat model by proper protocol design.

--
Dean