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iOS 10 uses a new password verification mechanism for iTunes backups that makes them easier to crack, according to testing performed by Elcomsoft, a company that specializes in software designed to access iPhone data.

Encrypted iTunes backups created on a Mac or PC are protected by a password that can potentially be brute forced by password cracking software. The backup method in iOS 10 "skips certain security checks," allowing Elcomsoft to try backup passwords "approximately 2500 times faster" compared to iOS 9 and earlier operating systems.

ios10-800x585.jpg

Obtaining the password for an iTunes backup provides access to all data on the phone, including that stored in Keychain, which holds all of a user's passwords and other sensitive information.
At this time, we have an early implementation featuring CPU-only recovery. The new security check is approximately 2,500 times weaker compared to the old one that was used in iOS 9 backups. At this time, we are getting these speeds:

iOS 9 (CPU): 2,400 passwords per second (Intel i5)
iOS 9 (GPU): 150,000 passwords per second (NVIDIA GTX 1080)
iOS 10 (CPU): 6,000,000 passwords per second (Intel i5)
In specific terms, security analyst Per Thorsheim of Peerlyst says Apple has switched from using a PBKDF2 hashing algorithm with 10,000 iterations to using a SHA256 algorithm with a single iteration, allowing for a significant speed increase when brute forcing a password.

ios10passwordcrackingelcomsoft.jpg
Image via Peerlyst

In a statement given to Forbes, Apple confirmed it is aware of the issue and is working on a fix.
"We're aware of an issue that affects the encryption strength for backups of devices on iOS 10 when backing up to iTunes on the Mac or PC. We are addressing this issue in an upcoming security update. This does not affect iCloud backups," a spokesperson said. "We recommend users ensure their Mac or PC are protected with strong passwords and can only be accessed by authorized users. Additional security is also available with FileVault whole disk encryption."
As Apple points out, this security oversight is limited to backups created on a Mac or PC and does not affect the security of iCloud backups. Most users likely do not need to worry about this issue as it requires access to the Mac or PC that was used to make the backup.

Apple has updates for iOS 10 and macOS Sierra in the works, and it's possible a fix will be included in the new versions of the software. iOS 10.1 and macOS Sierra 10.12.1 were seeded to developers and public beta testers earlier this week.

Article Link: iTunes Backup Passwords 'Much Easier' to Crack in iOS 10, Apple Working on Fix
 
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But this is NOT physical access to the iPhone. They are talking about decrypting the BACKUP data. This data is typically on e hard drive on a PC or Mac or maybe in Apple's iCloud
This is iTunes backups. Most don't use iTunes backups these days, even fewer would have had time to make one for iOS 10. While this doesn't demand physical access to an iPhone, it seems to me like it would demand physical access to a PC or Mac (and only a PC or Mac, not an iPhone or iPad).
 
I love Apple, but this sort of thing is so frustrating from a company that is trying to make privacy be such a huge part of its brand. Without security, privacy cannot exist. It doesn't have a huge effect on me, but it lowers my level of trust that Apple knows what it's doing.

As a developer, this is a pretty glaring flaw, so I can only assume (or hope, rather) it was a temporary implementation that accidentally got through to a release version. Whatever happened, it's bizarre.
 
If my iTunes backups are on a drive running FireVault, does the strength of iTunes' encryption matter?

Interesting software that ElcomSoft has on their website

ElcomSoft.com said:
Gain full access to information stored in FileVault 2 containers, iOS, Apple iCloud
...
extract binary authentication tokens from computers, hard drives and forensic disk images to download iCloud data without a password.
...
Support for iOS from 3.x to 10.x

https://www.elcomsoft.com/products.html
 
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Hopefully people are using an encrypted macOS or Windows disk with a secure password thereby preventing anyone from even getting into their system without first cracking that security.
 
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LOL! Yes it matters. They can't! And they are talking about containers btw., not full disk encryption. Don't believe everything they want you to just to make you buy their software. And have fun with my encrypted container and its 33 character password. Yes it can crack it with per brute force, but only in a few thousand years... maybe.
 

Did you not read the description of what is required?

Decrypt FileVault 2 Volumes

FileVault 2 is a whole-disk encryption scheme used in Apple’s Mac OS X. FileVault 2 protects the entire startup partition with secure 256-bit XTS-AES encryption.

If the user forgets their account password, or if the encrypted volume is moved to a different computer, a FileVault 2 can be unlocked with a special Recovery Key. If the user logs in with their Apple ID credentials, the Recovery Key can be saved into the user’s iCloud account. Should the user forget their password, the system can automatically use the Recovery Key to unlock the encrypted volume. It is important to note that Apple does not allow the end user to view or extract FileVault 2 recovery keys from iCloud.

Elcomsoft Phone Breaker can extract FileVault 2 recovery keys from the user’s iCloud account, and use these keys to decrypt encrypted disk images. Valid authentication credentials (Apple ID/password or iCloud authentication token) as well as volume identification information extracted from the FileVault-encrypted disk image are required.
 
Valid authentication credentials (Apple ID/password or iCloud authentication token) [...] are required.

Apple has already said, they hand iCloud login credentials out to any government and or the FBI even without a warrant.
 
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