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They say what goes around comes around, and there's perhaps nowhere that rings more true than in the world of government surveillance. Such was the case on Monday morning when Hacking Team, the Italian company known for selling electronic intrusion tools to police and federal agencies around the world, awoke to find that it had been hacked itself—big time—apparently exposing its complete client list, email spools, invoices, contracts, source code, and more. Those documents show that not only has the company been selling hacking tools to a long list of foreign governments with dubious human rights records, but it’s also establishing a nice customer base right here in the good old US of A. The cache, which sources told Motherboard is legitimate, contains more than 400 gigabytes of files, many of which confirm previous reports that the company has been selling industrial-grade surveillance software to authoritarian governments. Hacking Team is known in the surveillance world for its flagship hacking suite, Remote Control System (RCS) or Galileo, which allows its government and law enforcement clients to secretly install “implants” on remote machines that can steal private emails, record Skype calls, and even monitor targets through their computer's webcam. Hacking Team in North America

According to leaked contracts, invoices and an up-to-date list of customer subscriptions, Hacking Team’s clients—which the company has consistently refused to name—also include Kazakhstan, Azerbaijan, Oman, Saudi Arabia, Uzbekistan, Bahrain, Ethiopia, Nigeria, Sudan and many others. The list of names matches the findings of Citizen Lab, a research lab at the University of Toronto's Munk School of Global Affairs that previously found traces of Hacking Team on the computers of journalists and activists around the world. Last year, the Lab's researchers mapped out the worldwide collection infrastructure used by Hacking Team's customers to covertly transport stolen data, unveiling a massive network comprised of servers based in 21 countries. Reporters Without Borders later named the company one of the “Enemies of the Internet” in its annual report on government surveillance and censorship.

we’ve only scratched the surface of this massive leak, and it’s unclear how Hacking Team will recover from having its secrets spilling across the internet for all to see. In the meantime, the company is asking all customers to stop using its spyware—and likely preparing for the worst.

Europe’s highest court on Tuesday struck down an international agreement that allowed companies to move digital information like people’s web search histories and social media updates between the European Union and the United States. The decision left the international operations of companies like Google and Facebook in a sort of legal limbo even as their services continued working as usual.The ruling, by the European Court of Justice, said the so-called safe harbor agreement was flawed because it allowed American government authorities to gain routine access to Europeans’ online information. The court said leaks from Edward J. Snowden, the former contractor for the National Security Agency, made it clear that American intelligence agencies had almost unfettered access to the data, infringing on Europeans’ rights to privacy. The court said data protection regulators in each of the European Union’s 28 countries should have oversight over how companies collect and use online information of their countries’ citizens. European countries have widely varying stances towards privacy.

Data protection advocates hailed the ruling. Industry executives and trade groups, though, said the decision left a huge amount of uncertainty for big companies, many of which rely on the easy flow of data for lucrative businesses like online advertising. They called on the European Commission to complete a new safe harbor agreement with the United States, a deal that has been negotiated for more than two years and could limit the fallout from the court’s decision.

Some European officials and many of the big technology companies, including Facebook and Microsoft, tried to play down the impact of the ruling. The companies kept their services running, saying that other agreements with the European Union should provide an adequate legal foundation.But those other agreements are now expected to be examined and questioned by some of Europe’s national privacy watchdogs. The potential inquiries could make it hard for companies to transfer Europeans’ information overseas under the current data arrangements. And the ruling appeared to leave smaller companies with fewer legal resources vulnerable to potential privacy violations.

The National Security Agency and its British counterpart, Government Communications Headquarters, have worked to subvert anti-virus and other security software in order to track users and infiltrate networks, according to documents from NSA whistleblower Edward Snowden. The spy agencies have reverse engineered software products, sometimes under questionable legal authority, and monitored web and email traffic in order to discreetly thwart anti-virus software and obtain intelligence from companies about security software and users of such software. One security software maker repeatedly singled out in the documents is Moscow-based Kaspersky Lab, which has a holding registered in the U.K., claims more than 270,000 corporate clients, and says it protects more than 400 million people with its products. British spies aimed to thwart Kaspersky software in part through a technique known as software reverse engineering, or SRE, according to a top-secret warrant renewal request. The NSA has also studied Kaspersky Lab’s software for weaknesses, obtaining sensitive customer information by monitoring communications between the software and Kaspersky servers, according to a draft top-secret report. The U.S. spy agency also appears to have examined emails inbound to security software companies flagging new viruses and vulnerabilities.

The efforts to compromise security software were of particular importance because such software is relied upon to defend against an array of digital threats and is typically more trusted by the operating system than other applications, running with elevated privileges that allow more vectors for surveillance and attack. Spy agencies seem to be engaged in a digital game of cat and mouse with anti-virus software companies; the U.S. and U.K. have aggressively probed for weaknesses in software deployed by the companies, which have themselves exposed sophisticated state-sponsored malware.

The requested warrant, provided under Section 5 of the U.K.’s 1994 Intelligence Services Act, must be renewed by a government minister every six months. The document published today is a renewal request for a warrant valid from July 7, 2008 until January 7, 2009. The request seeks authorization for GCHQ activities that “involve modifying commercially available software to enable interception, decryption and other related tasks, or ‘reverse engineering’ software.”

AMERICAN AND BRITISH spies hacked into the internal computer network of the largest manufacturer of SIM cards in the world, stealing encryption keys used to protect the privacy of cellphone communications across the globe, according to top-secret documents provided to The Intercept by National Security Agency whistleblower Edward Snowden. The hack was perpetrated by a joint unit consisting of operatives from the NSA and its British counterpart Government Communications Headquarters, or GCHQ. The breach, detailed in a secret 2010 GCHQ document, gave the surveillance agencies the potential to secretly monitor a large portion of the world’s cellular communications, including both voice and data. The company targeted by the intelligence agencies, Gemalto, is a multinational firm incorporated in the Netherlands that makes the chips used in mobile phones and next-generation credit cards. Among its clients are AT&T, T-Mobile, Verizon, Sprint and some 450 wireless network providers around the world. The company operates in 85 countries and has more than 40 manufacturing facilities. One of its three global headquarters is in Austin, Texas and it has a large factory in Pennsylvania. In all, Gemalto produces some 2 billion SIM cards a year. Its motto is “Security to be Free.”

With these stolen encryption keys, intelligence agencies can monitor mobile communications without seeking or receiving approval from telecom companies and foreign governments. Possessing the keys also sidesteps the need to get a warrant or a wiretap, while leaving no trace on the wireless provider’s network that the communications were intercepted. Bulk key theft additionally enables the intelligence agencies to unlock any previously encrypted communications they had already intercepted, but did not yet have the ability to decrypt.

Leading privacy advocates and security experts say that the theft of encryption keys from major wireless network providers is tantamount to a thief obtaining the master ring of a building superintendent who holds the keys to every apartment. “Once you have the keys, decrypting traffic is trivial,” says Christopher Soghoian, the principal technologist for the American Civil Liberties Union. “The news of this key theft will send a shock wave through the security community.”

“Is this related to what we talked about before?” Bencsáth said, referring to a previous discussion they’d had about testing new services the company planned to offer customers. “No, something else,” Bartos said. “Can you come now? It’s important. But don’t tell anyone where you’re going.” Bencsáth wolfed down the rest of his lunch and told his colleagues in the lab that he had a “red alert” and had to go. “Don’t ask,” he said as he ran out the door. A while later, he was at Bartos’ office, where a triage team had been assembled to address the problem they wanted to discuss. “We think we’ve been hacked,” Bartos said.

They found a suspicious file on a developer’s machine that had been created late at night when no one was working. The file was encrypted and compressed so they had no idea what was inside, but they suspected it was data the attackers had copied from the machine and planned to retrieve later. A search of the company’s network found a few more machines that had been infected as well. The triage team felt confident they had contained the attack but wanted Bencsáth’s help determining how the intruders had broken in and what they were after. The company had all the right protections in place—firewalls, antivirus, intrusion-detection and -prevention systems—and still the attackers got in.

Bencsáth was a teacher, not a malware hunter, and had never done such forensic work before. At the CrySyS Lab, where he was one of four advisers working with a handful of grad students, he did academic research for the European Union and occasional hands-on consulting work for other clients, but the latter was mostly run-of-the-mill cleanup work—mopping up and restoring systems after random virus infections. He’d never investigated a targeted hack before, let alone one that was still live, and was thrilled to have the chance. The only catch was, he couldn’t tell anyone what he was doing. Bartos’ company depended on the trust of customers, and if word got out that the company had been hacked, they could lose clients. The triage team had taken mirror images of the infected hard drives, so they and Bencsáth spent the rest of the afternoon poring over the copies in search of anything suspicious. By the end of the day, they’d found what they were looking for—an “infostealer” string of code that was designed to record passwords and other keystrokes on infected machines, as well as steal documents and take screenshots. It also catalogued any devices or systems that were connected to the machines so the attackers could build a blueprint of the company’s network architecture. The malware didn’t immediately siphon the stolen data from infected machines but instead stored it in a temporary file, like the one the triage team had found. The file grew fatter each time the infostealer sucked up data, until at some point the attackers would reach out to the machine to retrieve it from a server in India that served as a command-and-control node for the malware.