A Canadian computer science professor has endorsed Computerworld’s research into security aspects of the Mondex electronic cash system.
David Jones, president of cyber-rights group Electronic Frontier Canada, says in an article that “Mondex International has already conceded that its electronic ‘cash’ isn’t really as private as it once claimed. Now critics are questioning whether their security is all it’s cracked up to be.
“If crooks managed to create counterfeit cybercash, and if Mondex failed to detect it quickly enough, the deposits backing up the electronic currency could be drained dry, leaving customers out of pocket — unable to redeem the ‘value’ on their cards. Do participating banks have any contingency plans for what Mondex calls its ‘meltdown scenario’?”
Jones supports his contention with quotes from Computerworld interviews with Cambridge University crypto-expert Ross Anderson and Mondex security chief John Beric, claiming that the winding down of activity limits outlined by Beric will lead to cardholders “being manipulated like puppets”.
“Perfectly honest people using Mondex cards can suddenly be left stranded, unable to use the value on their Mondex cards without returning to the bank to be scrutinised,” under the scheme Beric described to Computer-world, says Jones. He questions whether Canadian banks have a contingency plan for a Mondex economy, with several millions of dollars flowing through it, suffering a ‘meltdown’.”
“Mondex’s runaway success,” says Jones, “may remind some Canadian business analysts of the recent Bre-X fiasco, in which gold-mining stocks soared to ludicrous heights and then collapsed like a house of cards when it was revealed that claims of billion-dollar gold deposits were bogus.”
The full article is at: theconvergence.com/columns/djones/07121997/.