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As of the Xbox Live update yesterday, there are no challenges for signing on to Xbox Live. This seems a little bit unbelievable, since it would be a huge mistake on Microsoft's side. But with all the consoles currently signing onto the network to run unsigned code, it is very true.
Anyone with an unbanned KeyVault (KV) and a Reset Glitch Hack (RGH) or JTAG console can go online to the Xbox Live network. This has happened multiple times in the past and it means a lot of stress to specific studios and publishers. The first ones that come to mind would be Infinity Ward, Treyarch and Activision as they have been battling an ongoing war with people modifying their consoles for 4 years now.
Speaking of Treyarch, it has also come to our attention that the security for Black-Ops II is currently not working correctly. Unsure if it is a human error or something a bit deeper than that, it would probably be wise for them to sort it out as soon as possible.
Update: Now confirmed patched.
Once you sign off you won't be able to reconnect.
~ Source