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National Data Breach Law Advances
Trailrunner7 writes "Two separate bills that would require organizations to notify consumers when their personal information has been compromised have made their way out of committee in the Senate, a critical step toward the creation of a national data-breach notification bill. But the Data Breach Notification Act, S.139, exempts federal agencies and other organizations subject to the bill from disclosing a breach if the data involved in the breach was encrypted. This is a clause that has caused some controversy, as some experts say that simply encrypting data does not render it useless. Also, S.139 would grant an exemption for data that 'was rendered indecipherable through the use of best practices or methods, such as redaction, access controls, or other such mechanisms, that are widely accepted as an effective industry practice, or an effective industry standard.' That is a very broad exemption that could become a sticking point as the bill moves along. The terms 'access controls' and 'other such mechanisms' encompass a huge number of technologies."
Encryption is not a cure all for security needs. It is merely a tool, similar to locks on the door, guards with M16s, and CCTV cameras. Poorly implemented, it could mean little to a clued attacker, and businesses need to realize that the clued attackers are far more common that they think.
One example: Say someone uses the hardware encryption on a tape drive. Tape drives can have encryption set in multiple ways. It can be manually set for all tapes, or the backup application can manage keys and set the encryption pet tape. If an organization is slipshod about the way they use the encryption and use one key for all tapes, and have that key information written on the proverbial slip of paper on the monitor, then an attacker can grab the tapes, perhaps grab a tape drive or buy one, and decrypt the info to their hearts content. Compare this to an organization which uses more stringent backup procedures so that even if a tape is stolen by an insider, it won't be decodable.
Another example: BitLocker. If implemented right, BitLocker is solid against most known threats (avenues like rubber hoses and RAM scanning via IEEE1394 are different). However, if someone installs BitLocker and then disables all key protectors, to a competant attacker, the BitLocker protection is dealt with. Same with people using BitLocker on machines without TPMs using USB flash drives, and not making sure the flash drive is stored securely.
There are various implementions of encryption. ECB is a bad version (because an attacker can figure out what a block matches to). A good implementation might use multiple diffusers and an algorithm like XTS so an attacker can't compare sector 55 with sector 157 and determine if the contents are similar. So, even though a program might use AES, if salts and other crypto concepts are not used, it severely weakens security.
Finally, TrueCrypt. If someone thinks that TrueCrypt fixes all their security issues and doesn't concern themselves with attacks over the wire, an attacker can either slap a keylogger on a machine, or just read the volume decryption keys from memory, then at a later date grab the disks if there is too much data to fetch from remote. If TrueCrypt is used with proper protection against network attacks (firewall, etc.) then it provides excellent protection.
I am concerned that a law exempting breaches from being disclosed would only work in the blackhat's favor. In theory, someone could rot13 the data on the drive, or AES it with an all zero key to make the security that comes with encryption meaningless.