This is something you definitely don’t want to hear about, especially when this is an industry where people allocate large percentages of their incomes.  This large-scale online trading site was never mentioned by name (which can be a good and bad thing), but the idea that it wasn’t even using SSL for authenticated logins would make anyone nervous.  There’s nothing like knowing that an eavesdropper can sniff packets off of a site that holds a lot of your money…

The conventional wisdom that banking organisations are more diligent with security was skewered in a presentation at the RSA conference this week.

Security consultancy Comsec outlined how they discovered that an online stock trading website they were asked to test was riddled with security holes. A rush job meant that basic security measures, such as the use of a secure login, were absent from the multimillion dollar system.

Comsec consultant Yuval Birman was called in to conduct a penetration test on the unnamed high-value trading exchange by an Israeli Bank. After capturing authentication packages sent when logging into the site he quickly established that it wasn’t using SSL for logins - the packets were too small. Cracking the “authentication method” was child’s play.

An offset of 10 was added to the hexadecimal value of login names. “When we reported our initial findings back to the bank and the exchange they were worried that transactions were happening across an open socket with no SSL encryption,” Birman explained. “But what was far worse was that it would be possible to log-on as one user and implement high-value transactions as another user. The authentication, and not the encryption flaws, were the more important.”

The system had no strong authorisation. But when developers brought two-factor authentication technology into the system they goofed again. They took an example of how to read the serial number of a token, which doesn’t have anything to do with the random-sequence number generated by the token as the basis of a security application. Those who defined the project, rather than coders, are more to blame for the debacle, according to Birman.[more]

Tags: Hackers