Governance & Risk Management , Incident & Breach Response , Managed Detection & Response (MDR)

Questioning Gemalto's Reaction to Hack

Company's One-Week Investigation Downplays the Impact
Questioning Gemalto's Reaction to Hack

SIM card manufacturer Gemalto, one week after launching an investigation into a reported U.S. and U.K. intelligence agency espionage operation launched against it, is downplaying the impact of the intrusion (see Report: Spies Stole SIM Encryption Keys). While confirming that it was hacked, Gemalto reports that its segmented internal networks - where sensitive encryption keys are stored - weren't breached.

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The report from Gemalto, which is the world's largest manufacturer of SIM cards, concludes: "We do not plan to communicate further on this matter, unless a significant development occurs."

But many information security experts question Gemalto's assertions, released so soon after the company first learned of the espionage operation that allegedly began five years ago. "We are unable to assess whether Gemalto's claims are accurate since there is little available information about the compromise at the company," threat intelligence firm iSight Partners says in a research note. "Additionally, there is a strong possibility that not even Gemalto knows the extent of the compromise, given the extreme sophistication of the actors involved."

Gemalto launched its investigation on Feb. 18 after investigatory news site The Intercept published a report that American and British intelligence agencies hacked into its systems in 2010 and 2011 and stole encryption keys that would theoretically allow them to decrypt millions or billions of intercepted calls, around the world, in real time. That report - which temporarily triggered a steep decline in Gemalto's stock price - was based on information leaked by former U.S. National Security Agency contractor Edward Snowden, which included documents that referenced Gemalto. One leaked slide reported that the NSA and its British counterpart, Government Communications Headquarters, "successfully implanted several machines and believe we have their entire network."

After a seven-day investigation, Gemalto on Feb. 25 issued its statement saying that it observed "two particularly sophisticated intrusions which could be related to the operation." But the statement also notes: "The attacks against Gemalto only breached its office networks and could not have resulted in a massive theft of SIM encryption keys," which are stored on segmented, internal networks that are not connected to its office networks.

Gemalto also downplayed any risk that would have been posed by the theft of the SIM card encryption keys by saying that many network operators have put additional security processes in place to protect against well-known flaws in the 2G standard that was then in place. Many networks have also upgraded to the newer 3G or 4G standards that have appeared in recent years, which offer increasing levels of security.

Gemalto's Conclusions: Valid?

Information security and privacy experts question the information Gemalto used to reach its conclusions, not least because the company's SIM cards - it manufacturers 2 billion of them per year - are used by 450 wireless network providers around the world.

"I'd be interested to know how they conducted an incident analysis so many years after the event - it's difficult enough with current logs and associated data," says Europol cybersecurity adviser Alan Woodward, who's a visiting professor at the department of computing at England's University of Surrey.

"Gemalto learned about this five-year-old hack by GCHQ when The Intercept called them up for a comment last week. That doesn't sound like they're on top of things, and it certainly suggests they don't have the in-house capability to detect and thwart sophisticated state-sponsored attacks," Christopher Soghoian, the chief technologist at the American Civil Liberties Union, tells The Intercept, noting that Gemalto remains "a high-profile target for intelligence agencies."

Furthermore, it's possible that the two attacks cited by Gemalto were not - in fact - launched by the NSA or GCHQ, and that their intrusions have yet to be found. That's why Christopher Paidhrin, security administration manager in the information security technology division at PeaceHealth, a U.S. healthcare system in the Pacific Northwest, argues for Gemalto hiring a third-party investigations firm to review its own investigation, as well as its security programs and monitoring capabilities. "Good reputational practices would require an external 're'-assessment following this level of compromise, as well as questioning the integrity of Gelmato's security program," he says.

But Gemalto, which is a publicly traded company, has a vested interest in downplaying any fallout from the alleged attack, as Edward Snowden noted in a wide-ranging Feb. 23 interview on the Reddit website. "When the NSA and GCHQ compromised the security of potentially billions of phones - 3G/4G encryption relies on the shared secret resident on the SIM - they not only screwed the manufacturer, they screwed all of us, because the only way to address the security compromise is to recall and replace every SIM sold by Gemalto," he said.

Fast Investigation

Many experts also say the speed with which Gemalto concluded its investigation is a red flag.

"A week is a very short time to conduct any detailed investigations into an alleged attack. If we examine any other major breaches, e.g. Target, Sony Pictures Entertainment, Staples, etc., the full details and extent were not known for a number of months after the investigations started," says Dublin-based information security consultant Brian Honan, who leads Ireland's computer emergency response team.

"I hope that after these initial findings that Gemalto will continue to investigate this breach in more detail to assure themselves and their customers that there is no impact from the breach. I would also hope that other manufacturers will take heed of this attack against Gemalto and proactively investigate their own networks for signs of any potential breaches."

Five Years Later

What's also striking about the alleged hack of Gemalto by the NSA and GCHQ is how much time has elapsed - and what else those agencies might now be doing. "Of course the attacks outlined in The Intercept point to techniques and tactics allegedly employed by the NSA and GCHQ up until 2010," says Honan, who's also a cybersecurity adviser to Europol. "I have no doubt that as with every other aspect of technology, their methods and tactics have also evolved since 2010."

Furthermore, NSA techniques that are more than a decade old, and which are only now coming to light - such as malware that can re-flash hard drive firmware - still look incredibly sophisticated and stealthy. "With the other stories we've seen emerge about the state of the art 10 years ago in cyber espionage, do we really think that if some technique was used to 'bug' their network more than five years ago, they would know what to look for, using today's methods?" Woodward asks.

Hackers Targeted Key Transfer

In this case, Gemalto launched its investigation after Snowden-leaked documents reported that GCHQ launched "trial" attacks against multiple network providers in 2010 - which were successful against mobile network operators in Afghanistan, Iceland, India, Iran, Serbia, Tajikistan and Yemen, although they failed to work against Pakistani network providers - followed by GCHQ in 2011 targeting Gemalto directly via a program codenamed DAPINO GAMMA.

According to leaked documents, the program's goal was "to get in to core data repositories" at Gemalto's global headquarters in France, while also attempting to intercept the communications of key employees located at the company's factories in Poland where encryption keys get burned onto SIM cards. According to a top-secret document, GCHQ "developed a methodology for intercepting these keys as they are transferred between various network operators and SIM card providers."

Gemalto's report seems to confirm those facts. "The operation aimed to intercept the encryption keys as they were exchanged between mobile operators and their suppliers globally," it says. But it argues that it had techniques in place to protect against such attacks. "By 2010, Gemalto had already widely deployed a secure transfer system with its customers and only rare exceptions to this scheme could have led to theft." It adds that even if such a theft occurred, "the intelligence services would only be able to spy on communications on second generation 2G mobile networks," and that devices using 3G and 4G networks would be immune to attacks that used stolen encryption keys, thanks to their being based on better crypto standards.

Gemalto also says that it has recommended "proprietary algorithms, which are still used as an extra level of security by major network operators," for anyone still operating a 2G network, which would further mitigate related attacks. But it also admits that not all operators are using these enhanced security options.

PeaceHealth's Paidhrin, however, questions whether the mobile network operators in all of the countries reportedly being targeted were using the enhanced security - or just those in Pakistan. He adds a further critique: "To state that the interceptions would have been of 'limited use' because security standards for 2G SIMs were 'a known weakness' and that 'most 2G SIMs in service at that time in these countries were prepaid cards which have a very short life cycle, typically between 3 and 6 months,' does not address or limit the significance of the interception of the SIM keys."

The use of 2G networks remains widespread. "Many mobile users in developing countries are still on 2G networks, which would mean that a large number of individuals would still be susceptible to communications intercept," iSight Partners says.

About the Author

Mathew J. Schwartz

Mathew J. Schwartz

Executive Editor, DataBreachToday & Europe, ISMG

Schwartz is an award-winning journalist with two decades of experience in magazines, newspapers and electronic media. He has covered the information security and privacy sector throughout his career. Before joining Information Security Media Group in 2014, where he now serves as the executive editor, DataBreachToday and for European news coverage, Schwartz was the information security beat reporter for InformationWeek and a frequent contributor to DarkReading, among other publications. He lives in Scotland.

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