Magic Lantern lights up the Cyber Knight

According to an MSNBC article, the U.S. Federal Bureau of Investigation is developing software capable of inserting a computer virus onto a suspect’s machine that could obtain encryption keys. The software, known as “Magic Lantern“, enables agents to read data that has been scrambled by suspected criminals. Currently, the FBI’s best snooping technology is the controversial Carnivore program that, among other things, grabs all manner of e-mails whizzing around the Internet. While such a broad net may catch many fish, the suspects clever enough to encrypt their files still manage to wriggle through.

Magic Lantern, one of a series of enhancements currently being developed for the FBI’s Carnivore project under the umbrella project name of Cyber Knight, is a different approach. It works by installing keylogging software on an individual suspect’s machine. For those not yet in the know, keyloggers are capable of capturing keystrokes typed on a computer. By tracking exactly what a suspect types, critical encryption key information can be gathered, and then transmitted back to the FBI. The virus can be sent to the suspect via e-mail or by physically installing it on a suspect’s computer.

All of this raises several issues. First, should the FBI be in the business of writing code cracking viruses. Second, what damage can we expect when through error or the actions of a disgruntled employee (yes, the FBI does have them) the Magic Lantern gets out. Third, the whole concept is probably an expensive moot point because any decent firewall program will stop the Lantern from sending its data back out.

My guess is that a suspect savvy enough to use file encryption is also savvy enough to use a firewall. Or is the Lantern also a firewall cracker? If that’s the case, it is a very dangerous piece of software the corporate espionage and financial data thieves will be very eager to get hold of.