The Swiss firm Crypto AG made millions of dollars selling encryption equipment to more than 120 countries from the 1950s through to 2018.
It sold equipment to many governments including Iran, Latin America, India and Pakistan.
The customers didn’t know that Crypto AG was secretly owned by the CIA and West German intelligence. These spy agencies ensured the equipment and software was designed so they could crack the encryption.
This secret of the Cold War, is exposed in a classified, comprehensive CIA history of the operation obtained by The Washington Post and ZDF, a German public broadcaster, in a joint reporting project.
The report states that it was the intelligence coup of the century. “Foreign governments were paying good money to the U.S. and West Germany for the privilege of having their most secret communications read by at least two (and possibly as many as five or six) foreign countries.”
From 1970 on, the CIA and its code-breaking ally, the National Security Agency, controlled nearly every aspect of Crypto’s operations —designing its technology to include flaws in the algorithms.
They monitored Iran’s mullahs during the 1979 hostage crisis, fed intelligence about Argentina’s military to Britain during the Falklands War, tracked the assassination campaigns of South American dictators and caught Libyan officials congratulating themselves on the 1986 bombing of a Berlin disco.
The German spy agency, the BND, came to believe the risk of exposure was too great and left the operation in the early 1990s. But the CIA bought the Germans’ stake and kept going, wringing Crypto for all its espionage worth until 2018, when the agency sold off the company’s assets.
The company’s importance to the global security market had fallen by then, squeezed by the spread of online encryption technology.
At times, including in the 1980s, Crypto accounted for roughly 40 percent of the diplomatic cables and other transmissions by foreign governments that cryptanalysts at the NSA decoded and mined for intelligence.
Crypto’s products are still in use in more than a dozen countries around the world, but the company was broken up in 2018, liquidated by shareholders whose identities have been permanently shielded by the laws of Liechtenstein.
Crypto AG brand and international business was sold to Crypto International and the remainder was a management buyout and became Crypto Security.
Both companies insist that they have no ongoing connection to any intelligence service,
The Swiss government announced that it was launching an investigation of Crypto AG’s ties to the CIA and BND and they also revoked Crypto International’s export license.
Do the CIA deserve congratulations for such a daring and successful means of intercepting secret messages sent by governments unfriendly to the West or they deserve condemnation for such deceit at an international level?
You decide.
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The National Cyber Security Centre (NCSC) is part of the United Kingdom Government and provides advice and support for the public and private sector in how to avoid computer security threats. It became operational in October 2016, and its parent organisation is GCHQ.