Ever wondered if your mouse keyboard or other USB peripherals could transmit sensitive data. Yes this is possible with what is called "Hardware Trojan". Hardware Trojans are compromised hardware devices which can send data to a remote thief. Until now Hardware Trojan was considered as modified electronic circuitry like if it has been fabricated in the factory to do so but, a recent finding by engineers at the Royal Military College of Canada in Kingston, Ontario suggests that a flaw in the USB could be used to sack into data from the hard disk.
The USB's plug and play functionality allows any device being plugged in to report its identity correctly. If the swapped device belongs to the same manufacturer and model the computer will not even notice a change in the device. Any USB device like a keyboard or a mouses could be swapped to a hacked one without the user knowing it. The engineers at Royal Military college successful designed a USB keyboard that successfully transmitted binary data from the Hard Drive via led flashing which could be encoded using Morse Code and by encoding data as a subtle warbling output from the sound card.