December 2003 - cypherpunks-legacy

Re: Graphic encryption
by futplex＠pseudonym.com 17 Dec '03

17 Dec '03

Allow me to add some more partially informed speculation about unreleased source code to the pile: Bill Stewart writes: > The description of Privasoft's method on their web page sounded like* it > broke up a fax image into little squares and shuffled them around based on > some proprietary (hence presumably weak) algorithm, somewhat like feeding > them to a shredder or puzzle-box, then put them in a file you can ship > with regular fax software or decrypt yourself. If that's the case, > and if the squares are sufficiently big to have enough pixels for fax > software to compress decently, then it's weak no matter _how_ strong > the encryption algorithm that shuffles them is, because you can piece together > matching edges like a jigsaw puzzle, or like a bunch of Iranian students > with American Embassy shredded documents. :} [...] > * The software was on the web page; if I'd had spare disk space that day and > some slack time I could have downloaded the demo version and tried it, > but this is what the description sounded like it meant. The graphic encryption patents I found a couple of weeks ago (cited here then) describe a method that I don't believe would be susceptible to a "jigsaw" attack like this. The patented method specifies encrypting the image bitmap bit-by-bit (it suggests XORing with a (P)RNG stream). So the square granularity would fail your second criterion for the applicability of a jigsaw attack. However, I only have circumstantial evidence to suggest that the PrivaSoft software actually uses the patents I've seen. Perhaps PrivaSoft Inc. could comment on which patent(s) (if they have already issued) form the basis for the use of encryption in their product ? One last note: I would certainly have a hard time applying a jigsaw attack to the sample ciphertext image at http://www.privasoft.com/images.html (and enlarged at http://www.privasoft.com/scramima.html) Maybe it would be easier if the plaintext image consisted of a picture with more macroscopic structure. -Futplex <futplex(a)pseudonym.com>

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Int'l Money Laundering, Part the Second
by cman＠communities.com 17 Dec '03

17 Dec '03

INTERNATIONAL ASPECTS The increasingly long arm of US law Those of you who have read my earlier exploration on the subject of jurisdiction (http://www.communities.com/paper/swamp.html) should be aware of a wide variety of ways that the US can "reach out and touch someone" they're not pleased with. Well, last week, I learned a few more. There are several ways in which the US is attempting to exert hegemony throughout the world wrt banking regulation: o Identification of "fiscally tolerant" nations and banking havens, and close regulatory examination of all transactions with these countries. o Pressure on major US trading partners and allies to pass and implement anti-money-laundering legislation and regulatory regimes. o Regulations on foreign banks with offices in the US, making compliance demands on world-wide operations. o Criminal prosecution of banks suspected of institutional involvement in money laundering, even if said bank has no offices or branches in the US. o Worldwide pre-trial substitute asset forfeiture of banks suspected of institutional involvement in money laundering, even if said bank has no offices or branches in the US. Pariah Nations in Banking ========================= As I touched on briefly in the previous section, transactions with well-known banking havens can automatically qualify as "suspicious." And in addition to some of the better known havens, a number of countries were pointed out at the conference as being "fiscally tolerant", including Malta, Uruguay, Japan, Ireland and Belgium; in another presentation the countries of Eastern Europe and the former Soviet Union were identified as "rapidly growing" sources of suspicious baning activity. Transactions with counterparties in such countries will be flagged by regulators for closer examination -- banks with large percentages of transactions with these countries will be expected to meet a higher standard in their attempt to identify "suspicious" behavior and will be under increasing pressure to investigate their customers' business practicies and motivation for all bank transactions. Some countries are clearly going to continue to tell the US to "get stuffed." However, if the US is successful in pressuring more and more countries to "tow the line", it will leave a shrinking pool of transactions subject to closer and closer examination. New Money Laundering Legislation ================================ Two presentations, one from Taiwan, the other from Thailand, focused on new or proposed legislation wrt money laundering in those countries. Based on my direct experience of living in the former, and my reseach into the latter, it's going to be a very, very long time before such legislation has a significant impact on either country. Chinese people (who are in the majority in Taiwan, and form an economically active minority in Thailand) are very cash- oriented; I vividly remember payday in Taiwan, with the boss sitting at a table piled with money, bundling up salaries for everyone. I'd come home at the end of each month with a giant wad of cash from my several different jobs. One could hardly imagine a better environment for money laundering than a society in which large quantities of cash change hands on a regular basis. After his talk, the Taiwanese speaker acknowledged the problems, but seemed hopeful that progress could be made. The speaker from Thailand, Nualnoi Treerat, a professor of Economics, discussed the proposed legislation primarily as an attempt to reduce the impact of organized crime on political life and society in Thailand; however, by her own estimations, the underground economy in Thailand represents 17-19% of the country's GDP (mostly drugs and prostitution.) Given the extensive corruption which she also detailed, it seems that such legislation will be a very small step indeed. Other speakers addressed the issue of cultural differences with respect to the use of cash and attitudes towards privacy, and it came up at lunch both days -- in many cultures, financial privacy is held in much higher regard than in the US, and people have a much stronger suspicion towards the government. Furthermore, there are many people who feel this way in the US. There is going to be an inevitable clash between atttempts to closely regulate and monitor money movements and people's fundamental desire for privacy. It's not clear that people of any culture can be sufficiently frightend by the bad guys to give up as much of their privacy as would be required for ultimate success in the War on Money Laundering. Despite the dim chances of success, it's clear that the US has been at least partially successful in coercing and coaxing other countries to adopt measures against money laundering, and to some extent there is local support for these measures. But these direct efforts pale by comparison to some other techniques... Foreign Bank Regulation ======================= In various pro-privacy publications I've read, there have been oblique warnings about doing business with foreign banks that maintain offices in the US. At this conference, I learned some very concrete reasons for this. It turns out that if a foreign bank wants to open a US office, they must demonstrate compliance with US money laundering laws throughout their _worldwide operations_. Furthermore, they're expected to have solid leadership for these policies from their home offices. This puts such banks in a serious bind. For instance, while Annunzio-Wylie absolves (or attempts to absolve) banks from civil liability for filing Suspicious Activity Reports and Criminal Referral Forms on their cusomters, this absolution does not extend to the home countries of these banks, where substantially different laws may obtain -- possibly explicitly forbidding this kind of reporting. There is almost a certain kind of logic to this kind of activity, but not content to extend our laws over the worldwide operations of banks with US offices, there are two ways in which US authorities are now attempting to extend US laws to banks _with no US offices_. Extraterritorial Reach ====================== The best paper presented at the conference, hands down, was "Surviving the Solution: The Extraterritorial Reach of the United States," by Kirk Munroe, a criminal defense attorney practicing in Miami. [I intend to find out if an online version of this paper can be made available.] To quote Mr. Munroe: The US money laundering law specifically provides for extraterritorial jurisdiction when (a) the conduct is by a US citizen anywhere in the world, or, if by a non-US citizen, the conduct occurs, at least in part, in the United States, and (b) the transactions, or a series of related transactions, exceeds $10,000. [18 USC $ 1956(f)] Some add'l background: banks involved in international business typically have a number of _correspondent accounts_ scattered around the world that are used for clearing wire transfers and other transactions. Since the BCCI scandal, the US government has increasingly gone after these accounts when a bank is suspected of facilitating money laundering. Furthermore, banks can have these correspondent accounts seized, even if they no longer contain "dirty" money, because they _facilitated_ a money laundering activity. When you combine these elements, you get a strategy that permits the US government to confiscate worldwide correspondent accounts of banks, even if they don't have a US presence. The first case Mr. Munroe cites is that of Banco de Occidente (Panama), one of his clients, that was alleged to have facilitated the laundering of the proceeds of drug transactions. The indictment included criminal charges against the banks and a criminal forfeiture charge. The government also filed a civil action for the forfeiture of $412 million allegedly laundered (although it had already passed completely through the bank.) The government then proceded to freeze not only the bank's US correspondent accounts, but also accounts in Germany, Switzerland and Canada, leading to the insolvency of the bank and its subsequent takeover by the Panamanian Banking Commission. [The Germans quickly unfroze the account after a civil action brought by the bank.] Quoting Munroe: After months of difficult and complicated negotiations which involved the banks' various interests in eight nations, a resolution was reached with the governments of the US, Canada, and Switzerland... [the bank] entered a guilty plea and agreed to forfeit, over a period of four years, $5 million to the US. The US, in turn, paid the Swiss and the Canadians $1 million each from the initial $2 million forfeiture payment. [Those of you who are still under any delusions about the "safety" of Swiss bank accounts, take careful note of this.] Mr. Munroe concludes that the only reason that the bank got off this "lightly" was because of substantial evidence that it was, by and large, a highly respectable institution and that this instance of laundering was an aberration. The next case cited by Mr. Munroe is that of Bank Leu. I quote from his paper: In sum, a Luxembourg bank with no office in the US was charged and convicted of money laundering in the US on the basis of clearing US dollar negotiable instruments drawn on a US bank but deposited by non-US citizens in Luxembourg. In other words, acceptance of US-dollar negotiable instruments by a bank anywhere in the world outside of the US renders the bank susceptible to US criminal jurisdiction in the money laundering field. The case boils down to this: Bank Leu wanted to expand its private banking business, and hired an officer to market accounts in South America. Two related accounts were opened, and over a one- year period $2.3 million in cashier's checks, all below $10K, were deposited in the two accounts. Although no guilty knowledge could be shown, this case was pursued and won on a theory of "willful blindness", that is, the bank "should have known" that the transactions had no valid business purpose and were inherently suspicious (came via Columbia, were sometimes more than 6 months old, all in small amounts, etc.). According to a LEA representative at the conference, there was a lot of joking in the backoffice at Bank Leu about the money being dirty, and clerks were repeatedly told "don't worry, it's ok" by bank officers. Certainly if this is true, it amounts to _extremely_ willful blindness, but this case still represents an amazingly long reach for US laws. [more to come... "Things bad people do with money"]

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Re: Crypto's Role in Evil?
by mkj＠october.ducktown.org 17 Dec '03

17 Dec '03

> > We mustn't forget that, until very recently, strong, widespread > > privacy has been humanity's "default" condition. > > Not much privacy in village or tribal life. Even neighborhoods of > earlier cities weren't very private. Neighbors always knew your business. I now realize that my first response to this point was stupid. I was focused exclusively on what one might call "transient" privacy -- the ability to wander out of general earshot for the occassional private conversation. I now see that there is another kind of privacy, which one might call "steady-state" privacy -- that is, the ability to live large portions of one's life out of the light of public scrutiny. In traditional small village or tribal life, transient privacy is rarely threatened, but steady-state privacy may be nonexistent. This is an important point which I didn't get the first time around, and I apologize for giving it short shrift. The various GAK strategies, on the other hand, represent a nearly opposite strategy, preserving (at least in theory) general steady-state privacy (thereby perhaps satisfying the letter, if not the spirit, of most human rights law) while making it impossible to reliably ensure the privacy of any specific thing (Bentham's concealed random observer model for cost-efficient control of a population). These two types of privacy, of course, are not truly distinct, but are ends of a continuous spectrum. Yet they raise different challenges. This is all very interesting; it seems to imply the possibility of some sort of analytic system. But it's late and I'm not particularly brilliant, so I'll end here. --- mkj

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Re: truth in advertising: Netscape 1.1 on security
by patrick＠Verity.COM 17 Dec '03

17 Dec '03

> From: Travis Corcoran <tjic(a)OpenMarket.com> > > I ran 'strings' on the binary, and only got one "about.*security" reference. > > entering it as an URL > > about:security > > yields the ironically humorous (when you consider all of the security bugs): > > Whatchew talkin' 'bout, Willis? > On my PC the even funnier, Yeah, whatever... results for the same URL. Patrick _______________________________________________________________________ / These opinions are mine, and not Verity's (except by coincidence;). \ | (\ | | Patrick J. Horgan Verity Inc. \\ Have | | patrick(a)verity.com 1550 Plymouth Street \\ _ Sword | | Phone : (415)960-7600 Mountain View \\/ Will | | FAX : (415)960-7750 California 94303 _/\\ Travel | \___________________________________________________________\)__________/

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Re: Basic Flaws in Internet Security and Commerce
by patrick＠Verity.COM 17 Dec '03

17 Dec '03

Paul said: > A fine piece of work. The ideas expressed in this paper should scare > the hell out of everyone who uses NFS for any serious applications, > which for a fact includes most banks and all investment banks and > brokage houses. In this particular area I KNOW what is at risk. > Again, I congratulate the authors on a first-class effort. I agree, it's a good job of publicizing these holes, but (not to take anything away from these guys, I'm sure they know this), these are not newly found holes. These attacks on NFS have been known and exploited for years and are well known within the security community. What if all NFS traffic was encrypted via a shared key distributed via Diffie-Hellman? Know that would REALLY be secure NFS;) (I know, I know, DH doesn't do secure authentication, so how does Alice know that she didn't just agree to a secret with our Mr Bucket Brigade Mallet!) Patrick _______________________________________________________________________ / These opinions are mine, and not Verity's (except by coincidence;). \ | (\ | | Patrick J. Horgan Verity Inc. \\ Have | | patrick(a)verity.com 1550 Plymouth Street \\ _ Sword | | Phone : (415)960-7600 Mountain View \\/ Will | | FAX : (415)960-7750 California 94303 _/\\ Travel | \___________________________________________________________\)__________/

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SUPERWIPE pgp a / uuencode
by gjeffers＠socketis.net 17 Dec '03

17 Dec '03

Dear Cypherpunks, I used "PGP - A" to armor SUPERWIPE 1.04R for the first 10 C'punks to request it. I assumed that all the users would be PGP 'enabled. In case anyone of you weren't, please make another request for SUPERWIPE & specify that it be sent with UUENCODE armor & I will resend it with the UUENCODE armor. Yours Truly, Gary Jeffers

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Re: How to hold a key signing party?
by jpb＠miamisci.org 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- At 5:59 PM 10/10/95, you wrote: >Joe Block writes: > > What I have in mind is to have everyone who is planning on attending send > > me their key and its fingerprint.... > > > > This seems like a lot of work, which I don't mind, but if there is a more > > efficient method, I'd like to know about it. > >Doesn't make any difference to me, you nefarious agent of the Great >Man In The Middle you. > > > >[ You got to get up *pretty early in the morning* to put one over on >*me* like that. ] Each person at the party would confirm what their key signature was so the other attendees could check their handout. They then take the handout that they have personally checked the key signatures on home with them so that when they recieve the keys from yours truly they can compare the fingerprint they get with the fingerprint the owner claimed for the key, which they checked against the handout when they were at the party, yes? -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQEVAwUBMHtiEWGnwFiC3O2NAQFo5ggArfaPrtROH9QmB0luwrliH92fEguQAekd EsY46cEt1tGP3wXzvbVf6ArzZf/cs60Rsj71ufGVmPytF88VNfo/av0LhCGtNKAh imTTcWaFvMsSnpEm3qAUAWSJK5WVVlkW7wV0ZEt8YVrX7QZCaXqq2rKzCPwSh3Ga VToHUDBbRESgEOkS1FxKluZiXa1Ym5P4Nwepno72TXvn/V2flc7iItV0WpLbaL4p abNwCP/haFViMeg8QbmMXP5+hojFnptK/v7Wc/D7XlRFB6CezAY/duHBwPsNueWI t4zegApZulk/nJ9da319etZ8OPMWIy0Li7cHlfvwd4/7kbsDmJoLJg== =1qlc -----END PGP SIGNATURE-----

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Re: Man in the Middle Revisited (but not for the last time)
by tcmay＠got.net 17 Dec '03

17 Dec '03

I suspect I'm not the only one getting weary of going around and around on this issue, so I'll confine my response to just one point: At 3:37 AM 10/11/95, Bryce wrote: >> Who any of these entities "really" are is irrelevant to me. (I don't even >> know if Hal Finney, who I met once a few years ago, is the "real" Hal >> Finney, nor do I really care.) > > >Well and good, Tim, but you *do* care if the entity calling itself "Hal >Finney" is being surrounded by the Man in the Channel ("Mitch") and all >of your communications with that entity are under Mitch's control. For >example, you may choose to enter a contract with the entity calling >itself "Hal Finney", and provide some sort of consulting service to it >in exchange for 10,000 cyberbucks. If Mitch is actually in control >then he could easily steal both the output of your consultation *and* >Hal's 10,000 cyberbucks and leave the two of you hating each other. Nope. au contraire, negatory. I *do not* care if the entity calling itself "Hal Finney" is being surrounded by an MITM. Only "Hal Finney the Key" can read messages I encrypt to the public key I got from him long ago, so if the "Hal + MITM" can do so, they are effectively one and the same. (Not really, in some other senses, but far beyond anything simple crypto can handle.) --Tim May Views here are not the views of my Internet Service Provider or Government. ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay(a)got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^756839 | black markets, collapse of governments. "National borders are just speed bumps on the information superhighway."

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Re: PC disk wipe software
by nobody＠REPLAY.COM 17 Dec '03

17 Dec '03

Responding to msg by bdavis(a)dg.thepoint.net (Brian Davis) on Tue, 10 Oct 10:47 AM >FYI the Justice Department requires degaussing a hard >drive before it can be declared surplus ... ----- The Washington Post, Oct 9, 1995. E-Mail That Comes Back And Bites. Even Deleted Messages Can Be Recovered for Court [excerpts] Computer sleuth John Jessen dredges computer files for electronic embarrassments that their authors thought were long gone. "Deleted" e-mail messages can pile up like little time bombs until someone such as Jessen arrives, carrying a court order and a stack of blank memory cartridges. "Can you really delete e-mail? Sure," Jessen said. "Does it happen as a common practice? No." Jessen is the founder of Electronic Evidence Discovery Inc., a Seattle company that since 1987 has been going after computer evidence in civil lawsuits. The nation's 25 million to 40 million users of e-mail are growing more comfortable with the medium. And more attorneys are recognizing e-mail's potential as a source of unguarded information about the companies they're suing. "People are very candid talking around the coffee machine." attorney Michael Patrick of Palo Alto, Calif., said. "They seem to behave the same way on the computer system. "They think they're speaking confidentially, so they're off the cuff," he said. "They're very often insulting. What they don't realize is it's all being recorded, and often those recordings are stored for a very long time. When you send a message, you lose control over where it goes." Many workers think their e-mail is private. It's not. Federal law allows employers to monitor employees' e-mail, and even if they don't, e-mail is fair game in lawsuits. When someone sues a company, the rules of discovery demand that the company produce all relevant business records. "The fact that they live in a computer rather than a file cabinet doesn't make any difference to the court," said Joan Feldman at Computer Forensics, another Seattle firm that specializes in this work. Often files retrieved include e-mail thought to have been erased long ago. It survives because the diligent computer system manager makes backup tapes of everything on the system every night, then stores those tapes for years. And so the files persist and multiply, aided by technological advances that continually add more storage capacity, more automatic backups and more redundancies to safeguard data from accidental erasure. "The computer is like a file cabinet tbat can open its own drawer, put a file on the copy machine and then slip the copy into another cabinet," Jessen said. "Sometimes I think it's alive." Jessen and Feldman augment their high-tech detective work by advising companies how to become less vulnerable to computer snoops like themselves: They recommend regular purges of old data, and they offer tips for avoiding e-mail blunders in the first place. Rule No. 1: Don't put anything on e-mail that you wouldn't want a jury to see. -----

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PKP Lawsuit progress report
by rschlafly＠attmail.com 17 Dec '03

17 Dec '03

I have a lawsuit against Public Key Partners and RSA Data Security. (Schlafly v. PKP & RSA, Case C-94-20512 SW PVT.) (1) PKP has been ordered dissolved by an arbiter. The MIT patent returns to RSA Data Security, and the Stanford patents go under the control of Cylink. I am happy to report that my lawsuit contributed to this outcome. (2) I will soon be deposing: Whit Diffie Ralph Merkle Martin Hellman Ron Rivest I will be asking all the obvious questions. My purpose is to break their patents. Does anyone have anything special for me to ask? If so, please send me your ideas. (3) There will be a hearing on the patent validity (and a couple of annoying technical legal issues) at 10:00 am, Dec. 6, 1995, in the court of Judge Spencer Williams, Federal Bldg, 280 S. First St, San Jose CA 95113. The US court clerk is at 408-291-7783. It is open to the public. Roger Schlafly rschlafly(a)attmail.com

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