Read this post from IntelFusion. It makes a very strong case for why I worry about any privacy system run by operators you can't really trust, investigate, and verify. In this case it is an investigation of Glype servers. They can be configured to do significant logging, and the author has been able to remotely retrieve the logs from many of the Glype servers. The results show many users from within sensitive US Government organizations and would provide the ability for an attacker to gather all kinds of useful intelligence to find soft targets to exploit. On the personal privacy side, it is an easy way for attackers to intercept usernames, passwords, travel plans, personal information and more for use in, identity theft, burglary, and hacking among other things.
Rogue Nodes Turn Tor Anonymizer Into Eavesdropper's Paradise In a follow up to this post I wrote a few weeks ago, we now understand how the 1000 government email accounts were compromised. It turns out that he did it using TOR.
I have said for a long time that I am amazed that any one operates TOR servers other than government people and criminal/terrorist people. As the operator of a TOR server, you have access to the clear text of the data flowing through your server when you are the exit node (about 1/3 of the traffic typically). While the TOR documentation is clear about this vulnerability, it really understates it, and does not address what you should do about communicating with public services that do not provide an option to do end to end encryption of the information.
As a user of TOR, you are trusting the operators of the servers not to monitor your information. Dan Egerstad's attack was simply to violate that trust. He actively monitored all of the traffic through his 5 TOR servers. He ran multiple servers to increase the amount of data he could collect. He identified the government accounts by searching the captured data for simple strings that would indicate the message was an email being sent or received in the clear, then further searching for key words that would indicate is was government or military related.
Many other TOR servers could currently be searching for financial, medical, trade secret, or other information.
With any privacy service, you need to trust the operators of that service. The theory was that you would not need to trust the operators of the TOR network. The reality is that, in real world use, you do have to trust them, but you typically know very little about them. There is almost no hurdle to establishing a new TOR server. Just about anyone with access to a server can set it up as a TOR server. You must assume that many of those people will not have your best interests at heart.
My personal approach is to work with people with a long track-record of trustworthy behavior. Anonymizer has been providing services for almost 12 years. I personally have been operating privacy services since 1992. In that time I have protected millions of people and billions of web pages and emails. Our track record for integrity is long and unblemished. I think that is the kind of basis one should use for deciding who to trust.