Jeremy Scahill and Josh Begley, The Great SIM Heist: How Spies Stole the Keys to the Encryption Castle. The Intercept, 19 February 2015. “American and British spies hacked into the internal computer network of the largest manufacturer of SIM cards in the world, stealing encryption keys used to protect the privacy of cellphone communications across the globe, according to top-secret documents provided to The Intercept by National Security Agency whistleblower Edward Snowden. The hack was perpetrated by a joint unit consisting of operatives from the NSA and its British counterpart Government Communications Headquarters, or GCHQ. The breach, detailed in a secret 2010 GCHQ document, gave the surveillance agencies the potential to secretly monitor a large portion of the world’s cellular communications, including both voice and data.”
The company targeted by the intelligence agencies, Gemalto, is a multinational firm incorporated in the Netherlands that makes the chips used in mobile phones and next-generation credit cards. Among its clients are AT&T, T-Mobile, Verizon, Sprint and some 450 wireless network providers around the world. The company operates in 85 countries and has more than 40 manufacturing facilities. One of its three global headquarters is in Austin, Texas and it has a large factory in Pennsylvania.
In all, Gemalto produces some 2 billion SIM cards a year. Its motto is “Security to be Free.”
With these stolen encryption keys, intelligence agencies can monitor mobile communications without seeking or receiving approval from telecom companies and foreign governments. Possessing the keys also sidesteps the need to get a warrant or a wiretap, while leaving no trace on the wireless provider’s network that the communications were intercepted. Bulk key theft additionally enables the intelligence agencies to unlock any previously encrypted communications they had already intercepted, but did not yet have the ability to decrypt.
As part of the covert operations against Gemalto, spies from GCHQ — with support from the NSA — mined the private communications of unwitting engineers and other company employees in multiple countries.
Gemalto was totally oblivious to the penetration of its systems — and the spying on its employees….
Leading privacy advocates and security experts say that the theft of encryption keys from major wireless network providers is tantamount to a thief obtaining the master ring of a building superintendent who holds the keys to every apartment. “Once you have the keys, decrypting traffic is trivial,” says Christopher Soghoian, the principal technologist for the American Civil Liberties Union. “The news of this key theft will send a shock wave through the security community.”…
The Mobile Handset Exploitation Team (MHET), whose existence has never before been disclosed, was formed in April 2010 to target vulnerabilities in cellphones. One of its main missions was to covertly penetrate computer networks of corporations that manufacture SIM cards, as well as those of wireless network providers. The team included operatives from both GCHQ and the NSA….
SIM cards were not invented to protect individual communications — they were designed to do something much simpler: ensure proper billing and prevent fraud, which was pervasive in the early days of cellphones. Soghoian compares the use of encryption keys on SIM cards to the way Social Security numbers are used today. “Social security numbers were designed in the 1930s to track your contributions to your government pension,” he says. “Today they are used as a quasi national identity number, which was never their intended purpose.”…
In effect, GCHQ clandestinely cyberstalked Gemalto employees, scouring their emails in an effort to find people who may have had access to the company’s core networks and Ki-[encryption key] generating systems….
To get bulk access to encryption keys, all the NSA or GCHQ needed to do was intercept emails or file transfers as they were sent over the Internet — something both agencies already do millions of times per day….
The GCHQ documents only contain statistics for three months of encryption key theft in 2010. During this period, millions of keys were harvested. The documents stated explicitly that GCHQ had already created a constantly evolving automated process for bulk harvesting of keys. They describe active operations targeting Gemalto’s personalization centers across the globe, as well as other major SIM card manufacturers and the private communications of their employees….
On January 17, 2014, President Barack Obama gave a major address on the NSA spying scandal. “The bottom line is that people around the world, regardless of their nationality, should know that the United States is not spying on ordinary people who don’t threaten our national security and that we take their privacy concerns into account in our policies and procedures,” he said.
The monitoring of the lawful communications of employees of major international corporations shows that such statements by Obama, other U.S. officials and British leaders — that they only intercept and monitor the communications of known or suspected criminals or terrorists — were untrue. “The NSA and GCHQ view the private communications of people who work for these companies as fair game,” says the ACLU’s Soghoian. “These people were specifically hunted and targeted by intelligence agencies, not because they did anything wrong, but because they could be used as a means to an end.”…
There are two basic types of electronic or digital surveillance: passive and active. All intelligence agencies engage in extensive passive surveillance, which means they collect bulk data by intercepting communications sent over fiber-optic cables, radio waves or wireless devices.
Intelligence agencies place high-power antennas, known as “spy nests,” on the top of their countries’ embassies and consulates, which are capable of vacuuming up data sent to or from mobile phones in the surrounding area. The joint NSA/CIA Special Collection Service is the lead entity that installs and mans these nests for the United States. An embassy situated near a parliament or government agency could easily intercept the phone calls and data transfers of the mobile phones used by foreign government officials. The U.S. embassy in Berlin, for instance, is located a stone’s throw from the Bundestag. But if the wireless carriers are using stronger encryption, which is built into modern 3G, 4G and LTE networks, then intercepted calls and other data would be more difficult to crack, particularly in bulk. If the intelligence agency wants to actually listen to or read what is being transmitted, they would need to decrypt the encrypted data.
Active surveillance is another option. This would require government agencies to “jam” a 3G or 4G network, forcing nearby phones onto 2G. Once forced down to the less secure 2G technology, the phone can be tricked into connecting to a fake cell tower operated by an intelligence agency. This method of surveillance, though effective, is risky, as it leaves a digital trace that counter-surveillance experts from foreign governments could detect.
Stealing the Kis solves all of these problems. This way, intelligence agencies can safely engage in passive, bulk surveillance without having to decrypt data and without leaving any trace whatsoever.
“Key theft enables the bulk, low-risk surveillance of encrypted communications,” the ACLU’s Soghoian says. “Agencies can collect all the communications and then look through them later. With the keys, they can decrypt whatever they want, whenever they want. It’s like a time machine, enabling the surveillance of communications that occurred before someone was even a target….
The only effective way for individuals to protect themselves from Ki theft-enabled surveillance is to use secure communications software, rather than relying on SIM card-based security. Secure software includes email and other apps that use Transport Layer Security (TLS), the mechanism underlying the secure HTTPS web protocol. The email clients included with Android phones and iPhones support TLS, as do large email providers like Yahoo and Google.
Apps like TextSecure and Silent Text are secure alternatives to SMS messages, while Signal, RedPhone and Silent Phone encrypt voice communications. Governments still may be able to intercept communications, but reading or listening to them would require hacking a specific handset, obtaining internal data from an email provider, or installing a bug in a room to record the conversations.
“We need to stop assuming that the phone companies will provide us with a secure method of making calls or exchanging text messages,” says Soghoian.