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http://arstechnica.com/gaming/news/2011/01/sony-releases-new-ps3-firmware-hackers-shrug-and-crack-it.ars
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The PS3 uses its SPEs to load AES-256 encrypted and signed data (metldr, lv1, lv2) in protected memory space on protected hardware. Unfortunately for them, they have not been generating their encrypted keys correctly (they did not use a random key for part of the AES key generation) and because of that their encryption was not secure and was broken. With that geo grabbed the Sony Master signing key, which is included in hardware and encrypted on every PS3 and are therefore able to decrypt or create any software on the PS3 on any of its hardware levels.
The only way to fix this is to replace every PS3, every game and every downloadable game with a new master key and fix the security of their protected memory usage.
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