Cryptoloop is vulnerable to watermarking attacks,[2] making it possible to determine presence of watermarked data on the encrypted filesystem: This attack exploits weakness in IV computation and knowledge of how file systems place files on disk.
This attack works with file systems that have soft block size of 1024 or greater.
This attack makes it possible to detect presence of specially crafted watermarked files.
Watermarked files contain special bit patterns that can be detected without decryption.
[3]Newer versions of cryptoloop's successor, dm-crypt, are less vulnerable to this type of attack if used correctly.