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No one thought it could be done but the Chinese have proven skeptics wrong. A team of Chinese engineers said they have hacked the Skype protocol, and they are planning to release a third-party Skype client before end August 2006. To make their point, they've managed to send the VoIP guru Charlie Paglee, the IP address of his PC, information that's always encrypted during a conventional Skype call.

In the meantime, Skype has dismissed the claim and said this does not comprehend Skype's cryptographic security or integrity. We shall see what other developments come up after this.

The Chinese have Hacked the Skype Protocol source