When it rains, it pours. Following the fuss over the Storm worm impersonating Tor, today Wired and The Register are covering the story of a Dan Egerstad, who intercepted embassy email account passwords by setting up 5 Tor exit nodes, then published the results online. People have been sniffing passwords on Tor before, and one even published a live feed. However, the sensitivity of embassies as targets and initial mystery over how the passwords were snooped, helped drum up media interest.
That unencrypted traffic can be read by Tor exit nodes is an unavoidable fact – if the destination does not accept encrypted information then there is nothing Tor can do to change this. The download page has a big warning, recommending users adopt end-to-end encryption. In some cases this might not be possible, for example browsing sites which do not support SSL, but for downloading email, not using encryption with Tor is inexcusable.
Looking at who owns the IP addresses of the compromised email accounts, I can see that they are mainly commercial ISPs, generally in the country where the embassy is located, so probably set up by the individual embassy and not subject to any server-imposed security policies. Even so, it is questionable whether such accounts should be used for official business, and it is not hard to find providers which support encrypted access.
The exceptions are Uzbekistan, and Iran whose servers are controlled by the respective Ministry of Foreign Affairs, so I’m surprised that secure access is not mandated (even my university requires this). I did note that the passwords of the Uzbek accounts are very good, so might well be allocated centrally according to a reasonable password policy. In contrast, the Iranian passwords are simply the name of the embassy, so guessable not only for these accounts, but any other one too.
In general, if you are sending confidential information over the Internet unencrypted you are at risk, and Tor does not change this fact, but it does move those risks around. Depending on the nature of the secrets, this could be for better or for worse. Without Tor, data can be intercepted near the server, near the client and also in the core of the Internet; with Tor data is encrypted near the client, but can be seen by the exit node.
Users of unknown Internet cafés or of poorly secured wireless are at risk of interception near the client. Sometimes there is motivation to snoop traffic there but not at the exit node. For example, people may be curious what websites their flatmates browse, but it is not interesting to know that an anonymous person is browsing a controversial site. This is why, at conferences, I tunnel my web browsing via Cambridge. I know that without end-to-end encryption my data can be intercepted, but the sysadmins at Cambridge have far less incentive misbehave than some joker sitting behind me.
Tor has similar properties, but when used with unencrypted data the risks need to be carefully evaluated. When collecting email, be it over Tor, using wireless, or via any other untrustworthy media, end-to-end encryption is essential. The fact that embassies, who are supposed to be security conscious, do not appreciate this is disappointing to learn.
Although I am a member of the Tor project, the views expressed here are mine alone and not those of Tor.