Leaked National Bank memo confirms pilot version of Mondex broken

The National Bank of New Zealand has effectively claimed ownership of a leaked memo which implies that the pilot version of the Mondex smartcard has been cracked - by threatening legal action against the Canadian researcher who placed it on the Web. National claims the memo, which notes successful attacks on the Hitachi 3101 chip and casts doubt on Mondex's risk management 'does not necessarily represent our views today'. Cambridge researcher Ross Anderson says its 'negative evaluation' of Mondex security is 'completely damning'.

The National Bank of New Zealand has effectively claimed ownership of a leaked memo which implies that the pilot version of the Mondex smartcard has been cracked — by threatening legal action against the Canadian researcher who placed it on the Web.

The memo refers to discussions with staff of the Commonwealth Bank of Australia — and to successful “microprobing attacks” on the Hitachi 3101 chip by the Dutch security consultancy TNO.

The attacks now appear to be those referred to by TNO spokesman Ernst Bovenlander at this year’s Eurocrypt conference. Bovenlander showed electron micrographs of a smartcard chip on which a fused link had been created. While intact, he said, the link put the chip into test mode and dumped the card’s contents into a serial port.

Bovenlander said undergraduates at Delft University routinely break smartcard chips, using microprobe workstations, as part of their assessed course work. The next-generation Mondex chip, the 3109, is made with a 0.8-micron process.

Encryption researchers also suspect a similar attack reported at an RSA Data Security conference by Tom Rowley of National Semiconductor also involved Mondex.

Simon Dixie, National’s manager, strategic advisory, and the author of the letter to David Jones, president of Canada’s Electronic Frontier cyber-rights group — threatening formal action (on copyright grounds) against Jones if the memo was not removed from the Internet described it as "a confidential letter between ourselves and Jones and his company, covering a confidential matter."

He declined to comment on the security issues raised in his bank's memo.

"If you're asking me why we're concerned about the publication of the document, the answer is that it's dated June 1996 and it does not necessarily reflect our views today. It's a document that's more than 12 months old and we've been working as part of the Mondex consortium taking various issues forward."

Cambridge University researcher Ross Anderson - who has frequently been at loggerheads with Mondex over security issues, said he had attended the Eurocypt conference and it was "quite plausible" that Bovenlander had been talking about the Mondex chip.

"The problem for Mondex is not just that their maladroit handling of the security question," said Anderson in an email message to a crytptography mailing list. "It's that their product has arrived at the wrong time. We have learned so many new chip hacking tricks over the last year, and so many bright fresh people have started looking at the problem, that all bets are now off. Work is continuing both at Cambridge and elsewhere. So even a positive product evaluation from 1996 would no longer mean much; a negative one is completely damning.

"The field should stabilise in a few years, by which time we will understand what can, and what can't, be achieved using tamper resistance mechanisms. Until then, they seem a pretty poor foundation for a payment system," said Anderson.

A copy of the National Bank memo has recently appeared at http://www.jya.com/mondex-hack.htm , along with the bank's letter to Jones.

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