Making markets for uninsured risk: Protection Gap Entities (PGEs) as risk-processing organizations in society

Book synopsis: This volume provides a comprehensive, up-to-date overview of the latest management and organizational research related to risk, crisis, and emergency management. It is the first volume to present these separate, but related, disciplines together. Combined with a distinctly social and organizational science approach to the topics (as opposed to engineering or financial economics), the research presented here strengthens the intellectual foundations of the discipline while contributing to the development of the field. The Routledge Companion to Risk, Crisis and Emergency Management promises to be a definitive treatise of the discipline today, with contributions from several key academics from around the world. It will prove a valuable reference for students, researchers, and practitioners seeking a broad, integrative view of risk and crisis management

Constructing risk objects and their controllability in the insurance industry

This study examines the interrelationship between the social construction of a risk object and the associated means of controlling it within organizations. Drawing on data from 35 insurance organizations, we develop a framework that theorizes how organizations construct risk objects along different dimensions of proximity/distance and tangibility/abstraction, which shapes and is shaped by how they construct their ability to control those risk objects as a matter of protection or capital efficiency. We show that organizations vary in these constructions of risk, developing three categories of Risk Protector, Risk Optimizer and Risk Jugglers. We explain this variation and offer an expanded conceptualization of the construction of the risk object and its controllability through three explanatory organizational features of centralizing, modelling and diversifying. Our findings are drawn together into a conceptual framework that illuminates two pathways that organizations follow in constructing and controlling risk: coherent pathways (with consistent either/or choices) or composite pathways (individual both/and approaches). In doing so, we theoretically extend the notion of the risk object within organizational studies and provide a platform for additional studies into this important but nascent area of organizational research

Double Public Key Signing Function Oracle Attack on EdDSA Software Implementations

EdDSA is a standardised elliptic curve digital signature scheme introduced to overcome some of the issues prevalent in the more established ECDSA standard. Due to the EdDSA standard specifying that the EdDSA signature be deterministic, if the signing function were to be used as a public key signing oracle for the attacker, the unforgeability notion of security of the scheme can be broken. This paper describes an attack against some of the most popular EdDSA implementations, which results in an adversary recovering the private key used during signing. With this recovered secret key, an adversary can sign arbitrary messages that would be seen as valid by the EdDSA verification function. A list of libraries with vulnerable APIs at the time of publication is provided. Furthermore, this paper provides two suggestions for securing EdDSA signing APIs against this vulnerability while it additionally discusses failed attempts to solve the issue

Generalized Proof of Liabilities

Proof of liabilities (PoL) allows a prover to prove his/her liabilities to a group of verifiers. This is a cryptographic primitive once used only for proving financial solvency but is also applicable to domains outside finance, including transparent and private donations, new algorithms for disapproval voting and publicly verifiable official reports such as COVID-19 daily cases. These applications share a common nature in incentives: it\u27s not in the prover\u27s interest to increase his/her total liabilities. We generalize PoL for these applications by attempting for the first time to standardize the goals it should achieve from security, privacy and efficiency perspectives. We also propose DAPOL+, a concrete PoL scheme extending the state-of-the-art DAPOL protocol but providing provable security and privacy, with benchmark results demonstrating its practicality. In addition, we explore techniques to provide additional features that might be desired in different applications of PoL and measure the asymptotic probability of failure

Base64 Malleability in Practice

Base64 encoding has been a popular method to encode binary data into printable ASCII characters. It is commonly used in several serialization protocols, web, and logging applications, while it is oftentimes the preferred method for human-readable database fields. However, while convenient and with a better compression rate than hex-encoding, the large number of base64 variants in related standards and proposed padding-mode optionality have been proven problematic in terms of security and cross-platform compatibility. This paper addresses a potential attack vector in the base64 decoding phase, where multiple different encodings can successfully decode into the same data, effectively breaking string uniqueness guarantees. The latter might result to log mismatches, denial of service attacks and duplicated database entries, among the others. Apart from documenting why canonicity can be broken by a malleable encoder, we also present an unexpected result, where most of today\u27s base64 decoder libraries are not 100% compatible in their default settings. Some surprising results include the non-compatible behavior of major Rust base64 crates and between popular Javascript and NodeJS base64 implementations. Finally, we propose ways and test vectors for mitigating these issues until a more permanent solution is widely adopted

Proof of Assets in the Diem Blockchain

A great challenge for distributed payment systems is their compliance with regulations, such as anti-money laundering, insolvency legislation, countering the financing of terrorism and sanctions laws. After Bitcoin\u27s MtGox scandal, one of the most needed auditing functionalities for financial solvency and tax reporting purposes is to prove ownership of blockchain reserves, a process known as Proof of Assets (PoA). This work formalizes the PoA requirements in account-based blockchains, focusing on the unique hierarchical account structure of the Diem blockchain, formerly known as Libra. In particular, we take into account some unique features of the Diem infrastructure to consider different PoA modes by exploring time-stamping edge cases, cold wallets, locked assets, spending ability delegation and account pruning, among the others. We also propose practical optimizations to the byte-size of PoA in the presence of light clients who cannot run a full node, including skipping Validator updates, while still maintaining the 66.7% Byzantine fault tolerance (BFT) guarantee

Taming the many EdDSAs

This paper analyses security of concrete instantiations of EdDSA by identifying exploitable inconsistencies between standardization recommendations and Ed25519 implementations. We mainly focus on current ambiguity regarding signature verification equations, binding and malleability guarantees, and incompatibilities between randomized batch and single verification. We give a formulation of Ed25519 signature scheme that achieves the highest level of security, explaining how each step of the algorithm links with the formal security properties. We develop optimizations to allow for more efficient secure implementations. Finally, we designed a set of edge-case test-vectors and run them by some of the most popular Ed25519 libraries. The results allowed to understand the security level of those implementations and showed that most libraries do not comply with the latest standardization recommendations. The methodology allows to test compatibility of different Ed25519 implementations which is of practical importance for consensus-driven applications

SoK: Blockchain Light Clients

Blockchain systems, as append-only ledgers, are typically associated with linearly growing participation costs. Therefore, for a blockchain client to interact with the system (query or submit a transaction), it can either pay these costs by downloading, storing and verifying the blockchain history, or forfeit blockchain security guarantees and place its trust on third party intermediary servers. With this problem becoming apparent from early works in the blockchain space, the concept of a light client has been proposed, where a resource-constrained client such as a browser or mobile device can participate in the system by querying and/or submitting transactions without holding the full blockchain but while still inheriting the blockchain\u27s security guarantees. A plethora of blockchain systems with different light client frameworks and implementations have been proposed, each with different functionalities, assumptions and efficiencies. In this work we provide a systematization of such light client designs. We unify the space by providing a set of definitions on their properties in terms of provided functionality, efficiency and security, and provide future research directions based on our findings

Broken Proofs of Solvency in Blockchain Custodial Wallets and Exchanges

Since the Mt. Gox Bitcoin exchange collapse in 2014, a number of custodial cryptocurrency wallets offer a form of financial solvency proofs to bolster their users\u27 confidence. We identified that despite recent academic works that highlight potential security and privacy vulnerabilities in popular auditability protocols, a number of high-profile exchanges implement these proofs incorrectly, thus defeating their initial purpose. In this paper we provide an overview of \textit{broken} liability proof systems used in production today and suggest fixes, in the hope of closing the gap between theory and practice. Surprisingly, many of these exploitable attacks are due to a) weak cryptographic operations, for instance SHA1 hashing or hash-output truncation to 8 bytes, b) lack of data binding, such as wrong Merkle tree inputs and misuse of public bulletin boards, and c) lack of user-ID uniqueness guarantees

SoK: Auditability and Accountability in Distributed Payment Systems

Enforcement of policy regulations and availability of auditing mechanisms are crucial building blocks for the adoption of distributed payment systems. This paper reviews a number of existing proposals for distributed payment systems that offer some form of auditability for regulators. We identify two major distinct lines of work: payment systems that are not privacy-preserving such as Bitcoin, where regulation functionalities are typically tailored for organizations controlling many accounts, and privacy-preserving payment systems where regulation functionalities are typically targeted to user level. We provide a systematization methodology over several axes of characteristics and performance, while highlighting insights and research gaps that we have identified, such as lack of dispute-resolution solutions between the regulator and the entity under audit, and the incompatibility of ledger pruning or off-chain protocols with regulatory requirements. Based on our findings, we propose a number of exciting future research directions