Silent Circle, Lavabit End Secure Email Services Due To Surveillance Concerns

The fallout from the controversy regarding the NSA's electronic surveillance programs has caused a firm providing encrypted email services to shutter its doors.

Silent Circle, which offers encryption services designed to shield everything from text messages to phone calls, says the decision to end its Silent Mail service reflects concerns regarding increased surveillance targeting users. With the move, it joins a company called Lavabit that suspended its operations last week, as well, due to concerns about government surveillance on the Internet.

The moves by the companies are the result of the ongoing ripples from the wave of controversy surrounding recent disclosures about NSA programs -- ripples that some predict could affect the secure messaging market in different ways.

"The thing to note about Silent Circle is that they are a niche cloud provider," says Paige Leidig, senior vice president at CipherCloud. "While they chose to shut down, the larger cloud provider titans, including likes Google and Microsoft, have a history of transparency reports that indicate they do not blindly comply with information requests. They also have the resources to mount a legal challenge which may not be an option for much smaller companies."

In a statement, Silent Circle chief technology officer Jon Callas said that Silent Mail was introduced because email was "fundamentally broken from a privacy perspective."

Silent Circle continues to offer other services that encrypt text messages and VoIP communications. The company says it does not log any metadata associated with these services and does not have the ability to decipher the content of calls and messages.

"With further thought -- and before we were served with any demands compounding this issue -- we decided it is in our users’ best interests to focus purely on peer-to-peer encrypted phone, text and videoconferencing services because the less information we have on how subscribers use our services, the better it is for everyone," Callas says.

"This is an unfortunate example of the chilling effect the current surveillance environment is having on innovative communications companies," he added. "While the majority of our government, commercial and consumer subscribers primarily use the unaffected apps that run on our peer-to-peer encrypted architecture -- like Silent Phone and Silent Text -- we apologize for any inconvenience this decision caused."

In a blog post, Lavabit owner Ladar Levison lamented being unable to share the exact circumstances that prompted his decision, but wrote that the decision was made after considerable "soul searching."

"This experience has taught me one very important lesson: without congressional action or a strong judicial precedent, I would _strongly_ recommend against anyone trusting their private data to a company with physical ties to the United States," he wrote.

Elsewhere in the industry, offered mixed predictions about how the mood of Web users and organizations will impact both the security market and trust on the Internet.

"The industry is full of visionaries and entrepreneurs who find inspiration in the marketplace to make the next generation of tools that businesses and consumers desire," Leidig said. "Judging from the significant jump in our prospect inquiries, many companies using cloud applications were rattled by the extent of the surveillance programs."

Steven Sprague, CEO of Wave Systems, says that instead of dropping services, a new market may open for protecting private communications on semi-public networks by using key servers located in different countries. This will ensure that government access to keys is dependent on the sovereign control of the country where the key server is, he explains.

"The challenge will be to establish the rules and notifications around these keys," he says. "I would also suggest that the challenge is to separate the messages and the keys requiring the companies to cooperate with the government access. Access is important for law enforcement, but voyeurism is not a good plan."

"It is time to focus on enhancing private communications," he continues. "The difference is: Where are the keys? If there is a central key service in the Netherlands, then content protected with those keys can only be viewed if access is granted from the Netherlands."

It is important that there is separation between content and keys so a single enterprise does not have the ability to read communications without the customer's knowledge, says Sprague.

Trust has already been lost to marketing on the Web, he adds.

"Everyone knows that Google and Apple are reading everything. [But] there is an opportunity for companies to promote protected content," he says.

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