Crypto phones are mobile telephones that provide security against eavesdropping and electronic surveillance.
The interception of telecommunications has become a major industry. Most of the world's intelligence agencies and many private organisations intercept telephone communications to obtain military, economic and political information. The price of simple mobile phone surveillance devices has become so low that many individuals can afford to use them. Advances in technology have made it difficult to determine who is intercepting and recording private communications.
Crypto phones can protect calls from interception by using algorithms to encrypt the signals. The phones have a cryptographic chip that handles encryption and decryption. Two algorithms are programmed into the chip: A key-exchange algorithm for the key agreement protocol and a symmetric-key algorithm for voice encryption.
Crypto phone Wikipedia
For the system to work, both users must have crypto phones logged into crypto mode. As with other phones, the signal is encrypted by GSM but it is also encrypted by the cryptographic chip. When the IMSI-catcher performs a man-in-the-middle attack and disables the GSM encryption, the crypto phone encryption remains intact. Therefore, while the signal is still being intercepted, it can no longer be decoded and fake SMS messages can't be sent as the IMSI-catcher does not have the correct code.
At the beginning of the call, both users get the same session key by using the hash function. Then the session key becomes a confirm code. The confirm code could be 3 letters or 4 numbers, depending on the phone's manufacturer. In the crypto mode, the user reads the confirm code over the encrypted line to his communication partner and verifies the confirm code his partner reads back. If there is a discrepancy in the confirm code, a man-in-the-middle attack has been detected.
The "session code" that has been established is used only for that specific call. At termination, all the parameters are wiped from memory, and there is no way to reconstruct the code. Intercepted and stored encrypted material can be kept for later analysis, but there is no way to break the code except, possibly, by the time consuming trial-and-error method.