This is the Cato Daily Podcast for Monday, February 23rd, 2015.

I'm Caleb Brown.

The NSA and British Intelligence teamed up to steal the keys to the Sim card that's very likely in your phone right now.

It means that encryption that normally prevents snooping may have been compromised.

Julian Sanchez, a senior fellow at the Cato Institute, talks about the problems this kind of espionage has on markets,

security, and the rule of law.

So I think a lot of us had thought that the major revelations from the Edward Snowden

archive were basically done, but then a blockbuster story at the

intercept showed that there were a few surprises left.

A major Dutch company called Jamalto that produces secure products like Sim cards

for hundreds of mobile carriers around the world was according to slides in there hacked in a joint operation by GQ, the government communication headquarters, that's through the British counterpart of NSA and

NSA and together they essentially targeted dozens of this Dutch companies employees

around the world, read their Facebook messages and emails to gather

information and then used that information to hack into Jamalto's networks in order to find a way

to steal the encryption keys that would let them read the traffic between carriers and cell phones.

So Jamalto basically ships these SIM cards to companies like AT&T and Sprint and Verizon

around the world and these are end up in phones and this is

supposed to be how you prevent people from listening in on your calls so it's

it's not like a walkie-talkie where anyone with an antenna can just listen in on a conversation,

but rather the encryption keys that are held inside the Sim card in your phone with a counterpart

held by the telephone carrier encrypt that traffic so you can't

just vacuum it up and listen to all the cell phone conversations in your

...