Encryption Archives | Digital Watch Observatory

California challenges federal approach with new AI rules

The government of California is advancing a more interventionist approach to AI governance, signalling a divergence from federal deregulatory preferences.

An executive order signed by Gavin Newsom mandates the development of comprehensive AI policies within 4 months, prioritising public safety and protecting fundamental rights.

The proposed framework requires companies seeking state contracts to demonstrate safeguards against harmful outputs, including the prevention of child exploitation material and violent content.

It also calls for measures addressing algorithmic bias and unlawful discrimination, alongside increased transparency through mechanisms such as watermarking AI-generated media.

Federal guidance has discouraged state-level intervention, framing such efforts as obstacles to technological leadership.

The evolving policy landscape reflects growing concern over the societal impact of AI systems, including risks to employment, content integrity and civil liberties.

An initiative by California that may therefore serve as a testing ground for future regulatory models, shaping broader debates on balancing innovation with accountability in digital governance.

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Healthcare data breach raises concerns over cloud security

A cybersecurity incident involving CareCloud has exposed vulnerabilities in the protection of sensitive medical information, following unauthorised access to patient records stored within its systems.

A breach was detected on 16 March, allowing attackers to access electronic health records for several hours, which raised concerns about potential data exposure.

The company has stated that the intrusion was contained on the same day, with systems restored and an external investigation launched.

However, uncertainty remains about whether any data were extracted and the scale of the potential impact, particularly given the company’s role in supporting tens of thousands of healthcare providers and millions of patients.

Such an incident reflects broader structural risks within digital healthcare infrastructures, where centralised storage of highly sensitive data increases the potential impact of cyberattacks.

Cloud environments, including services provided by Amazon Web Services, are increasingly integral to such systems, amplifying both efficiency and exposure.

The breach follows a pattern of escalating cyber threats targeting healthcare data, driven by its high value in criminal markets.

As investigations continue, the case underscores the need for stronger data protection measures, enhanced monitoring systems and more robust regulatory oversight to safeguard patient information.

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EU boosts fact-checking with €5 million disinformation resilience plan

The European Commission has committed €5 million to strengthen independent fact-checking networks, reinforcing efforts to counter disinformation across Europe. The initiative seeks to expand verification capacity in all EU languages while improving coordination among key stakeholders.

The programme introduces a comprehensive support system for fact-checkers, covering legal assistance, cybersecurity protection and psychological support.

It also establishes a centralised European repository of verified information, designed to enhance transparency and improve access to reliable content across the EU.

Led by the European Fact-Checking Standards Network, the project builds on existing frameworks such as the European Digital Media Observatory. The initiative forms part of the EU’s broader strategy to strengthen information integrity and safeguard democratic processes.

By reinforcing independent verification ecosystems, the programme reflects a policy-driven effort to address disinformation threats while supporting a more resilient and trustworthy digital environment across Europe.

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New quantum threat could weaken cryptocurrency encryption systems

A new warning from Google says advances in quantum computing could weaken widely used cryptographic systems protecting cryptocurrencies and digital infrastructure. A new whitepaper suggests future quantum machines may need fewer resources than previously estimated to break elliptic curve cryptography.

The research focuses on the elliptic curve discrete logarithm problem, which underpins much of today’s blockchain security. Findings suggest quantum algorithms like Shor’s could run with fewer qubits and gates, increasing concerns about cryptographic resilience.

To address the risk, the paper recommends a transition to post-quantum cryptography, which is designed to resist quantum attacks. It also outlines short-term blockchain measures, including avoiding reuse of vulnerable wallet addresses and preparing digital asset migration strategies.

Google also introduced a responsible disclosure approach using zero-knowledge proofs to communicate vulnerabilities without exposing exploitable details.

The company says this balances transparency and security, supporting coordinated efforts across crypto and research communities to prepare for quantum threats.

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Italy fines major bank over data protection failures

The Italian Data Protection Authority has imposed a €31.8 million fine on Intesa Sanpaolo following serious shortcomings in its handling of personal data.

The case stems from unauthorised access by an employee to thousands of customer accounts, raising concerns about internal oversight and data protection safeguards.

Investigations revealed that monitoring systems failed to detect repeated unjustified access to sensitive financial information over an extended period. The breach also involved high-risk individuals, highlighting weaknesses in risk-based controls instead of robust, targeted protection measures.

Authorities in Italy identified violations of core data protection principles, including integrity, confidentiality and accountability. Additional concerns arose from delays in notifying both regulators and affected individuals, limiting the ability to respond effectively to the incident.

The case of Intesa Sanpaolo underscores increasing regulatory scrutiny of data governance practices in the financial sector. Strengthening internal controls and ensuring timely breach reporting remain essential for maintaining trust and compliance in data-driven banking environments.

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EU investigates cyber attack targeting Commission websites

The European Commission has confirmed a cyber-attack targeting its cloud infrastructure hosting the Europa.eu services, with authorities acting swiftly to contain the incident and prevent disruption to public access.

The attack was identified on 24 March, prompting immediate mitigation measures to secure systems and maintain service continuity.

Preliminary findings indicate that some data may have been accessed from affected websites, although the full scope of the incident remains under investigation.

The Commission has begun notifying the relevant EU entities that may be affected, while continuing efforts to assess the extent of the breach and strengthen safeguards.

Officials confirmed that internal systems were not affected, limiting the overall impact of the attack.

Monitoring efforts remain ongoing, with additional security measures being implemented to protect data and infrastructure, rather than relying solely on existing defences. The Commission has also committed to analysing the incident to improve its cybersecurity capabilities.

The attack comes amid growing cyber and hybrid threats targeting European institutions and critical services.

Existing frameworks, including the NIS2 Directive and the Cyber Solidarity Act, aim to strengthen resilience and coordination across member states, supporting a more unified response to large-scale cyber incidents across the EU.

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Google sets 2029 deadline for post-quantum cryptography migration

A transition to post-quantum cryptography by 2029 is being led by Google, aiming to secure digital systems against future quantum computing threats instead of relying on existing encryption standards.

The move reflects growing concern that advances in quantum hardware and algorithms could eventually undermine current cryptographic protections, particularly through attacks that store encrypted data today for decryption in the future.

Quantum computers are expected to challenge widely used encryption and digital signature systems, prompting the need for early transition strategies.

Google has updated its threat model to prioritise authentication services, recognising that digital signatures pose a critical vulnerability if not addressed before the arrival of quantum machines capable of cryptanalysis.

The company is encouraging broader industry action to accelerate migration efforts and reduce long-term security risks.

As part of its strategy, Google is integrating post-quantum cryptography into its products and services.

Android 17 will include quantum-resistant digital signature protection aligned with standards developed by the US’s National Institute of Standards and Technology. At the same time, support has already been introduced in Google Chrome and cloud platforms.

These measures aim to bring advanced security technologies directly to users instead of limiting them to experimental environments.

By setting a clear timeline, Google aims to instil urgency and direction across the wider technology sector.

The transition to post-quantum cryptography is expected to become a critical step in maintaining online security, ensuring that digital infrastructure remains resilient as quantum computing capabilities continue to evolve.

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EU privacy bodies back cybersecurity overhaul

The European Data Protection Board and the European Data Protection Supervisor have backed proposals to strengthen the EU cybersecurity law while safeguarding personal data. Their joint opinion addresses reforms to the Cybersecurity Act and updates to the NIS2 Directive.

Regulators support plans to reinforce the mandate of the European Union Agency for Cybersecurity and expand cybersecurity certification across digital supply chains. Clearer coordination between ENISA and privacy authorities is seen as essential for consistent oversight.

Advice also calls for limits on the processing of personal data and for prior consultation on technical rules affecting privacy. Certification schemes should align with the GDPR and help organisations demonstrate compliance.

Additional recommendations include broader cybersecurity skills training and a single EU entry point for personal data breach notifications. Proposed changes would also classify digital identity wallet providers as essential entities under the EU security rules.

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Canada’s watchdog highlights surge in AI impersonation scams

A growing wave of AI-driven scams is prompting warnings from Competition Bureau Canada, as fraudsters increasingly impersonate government officials through deepfake technology and fake websites.

Authorities report a steady rise in complaints linked to deceptive schemes designed to exploit public trust.

Scammers are using synthetic media to mimic well-known political figures, including senior government officials, to extract personal information and spread misleading narratives.

Such tactics demonstrate how AI tools are being weaponised for social engineering rather than for legitimate communication.

The trend reflects a broader shift in digital fraud, where increasingly sophisticated techniques blur the line between authentic and fabricated content. As synthetic identities become more convincing, individuals find it harder to verify the legitimacy of online interactions and official communications.

In response, authorities in Canada are intensifying awareness efforts during Fraud Prevention Month, offering expert guidance on identifying and avoiding scams.

The development underscores the urgent need for stronger safeguards and public education to counter evolving AI-enabled threats.

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IWF report reveals a rapid growth of synthetic child abuse material online

A surge in AI-generated child sexual abuse material has raised urgent concerns across Europe, with the Internet Watch Foundation reporting record levels of harmful content online.

Findings of the IWF report indicate that AI is accelerating both the scale and severity of abuse, transforming how offenders create and distribute illicit material.

Data from 2025 reveals a sharp increase in AI-generated imagery and video, with over 8,000 cases identified and a dramatic rise in highly severe content.

Synthetic videos have grown at an unprecedented rate, reflecting how emerging tools are being used to produce increasingly realistic and extreme scenarios rather than traditional formats.

Analysis of offender behaviour highlights a disturbing trend toward automation and accessibility.

Discussions on dark web forums suggest that future agentic AI systems may enable the creation of fully produced abusive content with minimal technical skill. The integration of audio and image manipulation further deepens risks, particularly where real children’s likenesses are involved.

Calls for regulatory action are intensifying as policymakers in the EU debate reforms to the Child Sexual Abuse Directive.

Advocacy groups emphasise the need for comprehensive criminalisation, alongside stronger safety-by-design requirements, arguing that technological innovation must not outpace child protection frameworks.

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