Swiss investigate claims of U.S. and German espionage at encryption firm
Nilay Syam
Crypto AG sold code-making technology to 120 countries from the end of World War Two to the beginning of this century. (Credit: VCG)

Crypto AG sold code-making technology to 120 countries from the end of World War Two to the beginning of this century. (Credit: VCG)

Switzerland is investigating claims that U.S. and German spies took control of a Swiss encryption firm in order to access top-secret dispatches of other nations.

The company, Crypto AG, which sold code-making technology to 120 countries from the end of World War Two to the beginning of this century – including India, Iran, Pakistan and several Latin American nations – allowed the U.S. Central Intelligence Agency (CIA) and the German BND spy service to decode messages sent using the company's equipment, according to the Washington Post newspaper, German television broadcaster ZDF and Swiss state media SRF.

The reports cited operation "Thesaurus" – the name was later changed to "Rubicon" – which gleaned communications of foreign governments from the crypto machines, thereby constituting roughly 40 percent of sensitive information that was processed by U.S. codebreakers for intelligence.

The profits the company raked in went to the CIA and BND. They even hired staff, designed the technology and took care of sales.  

"It was the intelligence coup of the century," the Washington Post  wrote. "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."

A document attributed to the CIA history of operation, revealed that U.S. spies and their West German counterparts overcame cultural barriers and divergent interests "again and again, to fashion the most profitable intelligence venture of the Cold War."

Post-reunification, the Germans exited the venture with the CIA buying it for $17 million.

Crypto AG was liquidated in 2018 in a transaction the Washington Post said seemed designed to cover for a U.S. exit. It led to the establishment of two successor companies: Crypto International and CyOne Security AG.

Crypto AG was liquidated in 2018 in a transaction, a report said, seemed designed to cover for a U.S. exit. (Credit: AP)

Crypto AG was liquidated in 2018 in a transaction, a report said, seemed designed to cover for a U.S. exit. (Credit: AP)

Crypto International, called the news reports "very distressing."

"We have no connections to the CIA or the BND and we never had," it said in a statement on the company website. "We are currently assessing the situation and will be commenting once we have a full picture."

CyOne Security said it was an independent entity, supplying security solutions to the Swiss public sector and had no links to espionage.

The Swiss Defense Ministry announced the government had appointed a former supreme court judge in January "to investigate and clarify the facts of the matter."

Judge Niklaus Oberholzer is expected to table his report by the end of June, following which a full briefing will be given to the cabinet.

"The events under discussion date back to 1945 and are difficult to reconstruct and interpret in the present-day context," it added in a statement.

Meanwhile, Switzerland's economy minister, Guy Parmelin, has suspended the general export licenses of Crypto International and CyOne Security until "the situation and open questions have been clarified," his office told Reuters in an email.

The CIA and BND are yet to issue comments.

Source(s): Reuters ,AFP