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Though the Library of Congress has ruled iPhone jailbreaks as "fair use," that doesn't mean Apple can't try to prevent it. While Apple has patched iOS 4.x to stymie jailbreaks on the iPhone 4, hackers have reportedly discovered a low-level boot ROM exploit which could allow these devices to be jailbroken. However, users hoping to use the code to jailbreak these devices are instead being tricked into downloading a trojan used to steal passwords from desktop computers.

A hacker named "pod2g," who works with a group that goes by the name Chronic Development Team, announced earlier this month that he found an exploit that could effectively jailbreak an iPhone 4 "forever." The exploit, referred to as "SHAtter," takes advantage of a flaw discovered in very low-level iPhone boot ROM code. Since it is unlikely that Apple could patch the boot ROM via software, devices with the flawed boot ROM code would be impervious to jailbreak patches in future iOS updates.

A purported tool using the exploit, greenpois0n, has been circulating recently, but security researcher Costin Raiu at Kapersey Labs says that all such tools are in fact trojans designed to trick users into giving up passwords. Additionally, fake jailbreaking websites have popped up, claiming to offer jailbreaks for any iOS device running any iOS version for up to $40 a pop.

Raiu warned that there are no current jailbreaks for iOS 4.0.2 or later on the iPhone 4, though the iPhone Dev Team has released a new beta of redsn0w which can jailbreak iOS 4.1 running on an iPhone 3G or second-gen iPod touch. These older devices are still susceptible to the pwnage2 DFU exploit used on these devices when running older versions of iOS. However, using the new beta may disable carrier unlocks (using the ultrasn0w tool) "forever."

ARS Technica has the details HERE!