How Not to Start an Encryption Company
Summary: Secure Channels Inc., an Irvine, Calif. encryption firm founded in 2014, marketed its technology as "unbreakable" and offered a BMW at Black Hat and a $50,000 bounty at RSA to anyone who could break it, then issued press releases when no one claimed the prizes. Its CEO Richard Blech had pleaded guilty in 2003 to civil and criminal fraud charges and was sentenced to 72 months in federal prison for running an international Ponzi scheme at Credit Bancorp Ltd. that prosecutors said took assets from new investors to pay earlier ones.
What's compelling: The company licenses its patented encryption from a separate Swiss firm, Secure Channels SA, whose CEO said he was "totally dismayed" at the marketing hype, and Blech conceded that named government and corporate "clients" were not actually using the product. EFF staff attorney Nate Cardozo called the claims "wildly irresponsible marketing" and said that because the cryptography itself can't be scrutinized, "we have to scrutinize the company itself."
Read the original at Krebs on Security ↗
- Topics
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