Karsten Nohl, founder of Security Research Labs in Berlin, told the New York Times on Sunday that he has discovered a flaw in the encryption technology used in some SIM cards. This vulnerability could allow hackers to eavesdrop on the device owner while in a call, make purchases through mobile payment systems, and possibly even impersonate the device owner.
Around 750 million devices could be vulnerable to attacks thanks to this flaw. According to the paper, the newly discovered encryption hole allows the attacker to obtain the SIM card's 56-digit key. Nohl said that he was able to acquire a key by sending the target device an SMS using a false signature for the device's wireless carrier.
Typically, both the device and wireless carrier verify their identities by comparing digital signatures. If a device recognizes a false signature, it will end transmission. Nohl said that 75 percent of the messages he sent to cellphones recognized the fake signature and immediately ended transmission. However, the other 25 percent broke off communication as well, but they also sent error messages back to Nohl that included their own encrypted digital signatures. That was enough information for Nohl to derive the SIM card's encryption key.
Thus with the correct key in hand, Nohl proceeded to send a virus to the SIM card using a text message. This virus allowed him to perform the hacks as previously stated: eavesdropping, making purchases and so on. He was able to gain access to the device in just two minutes using a PC.