Putin Offers 3.9 Million Rubles To Crack Privacy Protection Software: Why That Won't Be Enough

While the US and Europe may be all agog about their still debatable rights personal data and information, there are places in the world where the debate is over - and the state has won. Or claims it has.

Russia, to absolutely no one's surprise, is one of those places. President Vladimir Putin has signed legislation mandating that Google, Facebook and other western tech companies store their Russian data on Russian-domiciled servers.

And as Russians become more concerned about their own government's approach to speech and privacy, more of them are using protection software in an attempt to disguise their online activity. The Russian government does not look kindly on attempts to evade its oversight. In addition to its own clandestine efforts to penetrate those packages, it is offering financial incentives to help it do so.

However, there are two problems with this initiative: one is that Russian hackers themselves are among the most active users and, two, the amount of money they are making by doing so is calculated to be in the billions not millions. It's a big world and somebody's gotta make a buck hacking it. JL

Ilya Khrennikov reports in Bloomberg:

The Tor Project, funded in part by the U.S. government, had revenue last year of $3.53 million. Researchers said Russian hackers made $4.5 billion in 2011. This could get expensive.
From time to time, Edward Snowden's face pops up on video-chat monitors stationed at technology conferences. Broadcasting from Russia where he's taken asylum, the former U.S. National Security Agency contractor frequently evangelizes for use of the Internet anonymity tool Tor.
Snowden's affinity for Tor, an acronym for "the onion router," is not shared by the government ruling his adopted country. Russia's Interior Ministry is offering a contract worth 3.9 million rubles ($110,000) "to study the possibility of obtaining technical information on users and users' equipment of Tor anonymous network," according to an announcement posted last week on the government's website for state purchases.
The free software, engineered by the nonprofit Tor Project, sends each user's traffic across various nodes around the globe, encrypting it at every layer and making it extremely difficult to track. Tor is popular among hackers, criminals and political dissidents worldwide, and Russians have been especially receptive to Snowden's calls. The number of Tor users in the country tripled over the last 12 months to more than 150,000, according to data from the Tor Project.
The proliferation of Tor in Russia has been stoked partially by the revelations around U.S. government surveillance. But it's also taken off due to a rising fear of the Kremlin.
President Vladimir Putin has tightened his grip on the Internet over the last year. He signed a law requiring Google, Facebook and other Internet companies to store data on Russian users within the country. The government began blocking online content it deems to be "extremist," including posts from Ukrainian groups on social networks. It also requires bloggers to register with the communications watchdog and face prison for controversial posts.Does the Putin government really believe it can find a way to hack Tor? The system is used by arms dealers, international cyber-espionage rings and the very computer-security experts Putin would need to accomplish the task. It's popular primarily because it's so secure.
Still, if anyone can crack Tor, it'd be the Russians. Hackers there have threatened to break into the power grid and successfully infiltrated the Nasdaq. U.S. officials fear that Russian hackers may respond to recent sanctions with further cyber-attacks.
But Putin may need to pony up more than $110,000 to have a shot. The Tor Project, funded in part by the U.S. government, had revenue last year of $3.53 million. Researchers said Russian hackers made $4.5 billion in 2011. This could get expensive.