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Leaked documents reportedly show the CIA secretly bought an encryption company and used it to spy on clients — while turning a profit

12:39 13 February 2020 Author :  

•          The CIA secretly bought a Swiss company that sold encrypted devices and rigged them to spy on clients, according to confidential documents published by The Washington Post and ZDF Tuesday.

•          The company, Crypto AG, sold gadgets and software to spies, diplomats, military officials, and private companies for decades.

•          CIA agents secretly listened in on all communications that used the company's devices, and the CIA's leaked report called it "the intelligence coup of the century."

•          Crypto AG was dissolved in 2018, and the two companies that bought its assets deny any involvement with the CIA.

In leaked documents, newly published by The Washington Post and ZDF, the CIA describes how it pulled off "the intelligence coup of the century:" for decades, a company that sold encryption devices to more than 120 countries was secretly owned and operated by the CIA itself.

The company, Crypto AG, was acquired by the CIA at the height of the Cold War. Through a classified partnership with West Germany's spy agency, the CIA designed Crypto AG's encryption devices in a way that let the agency easily decrypt and read all messages sent by the company's clients.

Some details of Crypto AG's coordination with US intelligence agencies had been previously reported — a 1995 investigation by The Baltimore Sun revealed that the National Security Agency reached an agreement with Crypto AG executives to secretly rig encryption devices. However, the newly-published CIA report unveils the full extent of the US' operation of Crypto AG.

For decades, Crypto AG was the leading provider of encryption services. It boasted hundreds of clients ranging from the Vatican to Iran, generating millions of dollars in profits. The CIA maintained control over the company until at least 2008, when the agency's confidential report obtained by The Post was drafted.

Crypto AG was liquidated in 2018, and its assets were purchased by two other companies: CyOne Security and Crypto International. Both have denied any current connection to the CIA, and Crypto International chairman Andreas Linde told The Post that he "feels betrayed" by the revelation.

"Crypto International and Crypto AG are two completely separate companies without any relationship," a spokesperson for Crypto International said in a statement to Business Insider. "Crypto International is a Swedish owned company that in 2018 acquired the brand name and other assets from Crypto AG ... We have no connections to the CIA or the BND and we never had."

A representative for CyOne Security did not immediately respond to Business Insider's requests for comment.

In a statement to Business Insider, CIA press secretary Timothy Barrett declined to confirm or deny the report, saying the agency is "aware of press reporting about an alleged U.S. government program and do not have any guidance."

Crypto AG began selling encryption devices in 1940, marketing a mechanical device that was powered by a crank. The CIA reportedly purchased the company with a handshake deal in 1951, which was renewed with a secretive "licensing agreement" in 1960.

In the decades that followed, the CIA oversaw technical advances in Crypto AG's devices, shifting to electronic devices. The company reportedly contracted with Siemens and Motorola to modernize its gadgets.

The CIA's surveillance continued through the 1990s and 2000s, even as Crypto AG's revenue began to dwindle. It was ultimately dissolved in 2018 and sold for between $50 million and $70 million, according to anonymous current and former officials quoted by The Post.

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