When using Firefox Sync, you need a password (to login to your account) and an encryption key. Mozilla claims that it does not know your encryption key and that all data is encrypted before being send to Mozilla's servers.
However, when adding a new device, all you have to do is provide a key of 12 characters generated by the new device and enter that into a device that is already set up:
Once that has been done, your account name, password and encryption key are magically copied to your new device. How does this work, if Mozilla is never allowed to know your encryption key?