Zoom Admits Some Calls Were ‘Mistakenly’ Routed Through China

Popular video-conferencing company Zoom Video Communications (ZM) admitted that it had “mistakenly” allowed calls to flow through China, adding to a number of mis-steps raising doubt on the security of the platform.

Zoom said in a statement on Friday that certain meetings held by its non-Chinese users may have been “allowed to connect to systems in China, where they should not have been able to connect”.

“In February, Zoom rapidly added capacity to our Chinese region to handle a massive increase in demand,” said Zoom CEO Eric S. Yuan. “In our haste, we mistakenly added our two Chinese datacenters to a lengthy whitelist of backup bridges, potentially enabling non-Chinese clients to connect to them.”

The Silicon Valley-based company said it had since fixed the issue, explaining that the mistake occurred only “under extremely limited circumstances” and that government users were not affected.

The video-conferencing platform has been coping with increased traffic, as millions of users flocked to use its technology to host business and social meetings and during the lockdown affecting many countries around the world. Zoom has gone from an average of 10 million daily users to 200 million in a period of three months

The user boom has helped Zoom shares to more than double this year. Still Wall Street analysts have a cautious stance assigning a Moderate Buy consensus rating on the videoconferencing platform. Out of 19 analysts tracked by TipRanks in the last 3 months, 6 rate Zoom a Buy, 12 say Hold, while Goldman Sachs’ Heather Bellini is calling Sell. The $112.33 average price target  implies a 12% potential downside from current levels. (See Zoom stock analysis on TipRanks).

Zoom’s statement was triggered by research from Citizen Lab, which found that in some cases, the company’s encryption keys had significant weaknesses.

“During multiple test calls in North America, we observed keys for encrypting and decrypting meetings transmitted to servers in Beijing, China,” the report said warning that the app should not be used by users sharing sensitive and confidential information.

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