Wow, is this an embarrassing bug:
Yubico is recalling a line of security keys used by the U.S. government due to a firmware flaw. The company issued a security advisory today that warned of an issue in YubiKey FIPS Series devices with firmware versions 4.4.2 and 4.4.4 that reduced the randomness of the cryptographic keys it generates. The security keys are used by thousands of federal employees on a daily basis, letting them securely log-on to their devices by issuing one-time passwords.
The problem in question occurs after the security key powers up. According to Yubico, a bug keeps “some predictable content” inside the device’s data buffer that could impact the randomness of the keys generated. Security keys with ECDSA signatures are in particular danger. A total of 80 of the 256 bits generated by the key remain static, meaning an attacker who gains access to several signatures could recreate the private key.
Boing Boing post.
EDITED TO ADD (6/12): From Microsoft TechNet Security Guidance blog (in 2014): “Why We’re Not Recommending ‘FIPS Mode’ Anymore.“