NSA Targeted Bitcoiners, According to Snowden

Everyone’s favorite NSA leak is back with more information about unethical data collection at the NSA. More documents from 2013 suggest that the agency was actively seeking bitcoiners around the world, with a focus on fighting terrorism and organized crime.

Bitcoin troubled the NSA

Edward Snowden has released a new batch of redacted documents, suggesting that the NSA was/is attempting to track Bitcoin users. Snowden released the records to The Intercept, which is an online news outlet founded by Glenn Greenwald. You may remember that Greenwald was the Guardian journalist who first published Snowden’s surveillance leaks in 2013. The Intercept reported that this latest set of information harkens back to 2013, as well.

At that time, Congress received a letter from the Department of Homeland Security Acting Assistant Secretary for Legislative Affairs Brian De Vallance (say that title three times fast).

That letter expressed concerns about Bitcoin and blockchain-based technologies, specifically in reference to the anonymous and untraceable nature of these assets. The understandable worry was, of course, the use of Bitcoin in criminal activities, and De Vallance called for an aggressive stance on Bitcoin use by organized crime.

The documents uncovered by Snowden claim to be aimed at fighting terrorism and contain details on Bitcoiners in many countries worldwide. This information, of course, would have been collected without a warrant, meaning that there could be severe implications for early crypto related prosecutions. Convicts like Ross Ulbricht of Silk Road could have grounds to overturn their rulings.

Patrick Toomey, of the ACLU, explained how this information might help people like Ulbricht, and why the government should stop doing things like this in general. He points out that defendants are guaranteed the right to know where the indicting evidence came from, that this right is the necessary groundwork for due process. If the government is covering up its sources and creating false information trails, this is a severe problem for the American justice system, in general.

Bitcoin SHOULD trouble the NSA

Media has focussed on the innovation of blockchain and its potential uses in a mostly positive light, in recent years. Readers and reporters seem to have forgotten the initial purpose of Bitcoin, which was to replace centralized fiat cash, thereby defunding governments.

The NSA would have good reason to be wary of Bitcoiners, and it appears that they were keyed into the threat that Bitcoin could have to the overall governmental ability to function.

Since Snowden first released his 2013 documents, insiders in the cryptocurrency world have almost expected documentation like this to a surface. It would only make sense that if the NSA were spying on consumer internet usage, they would too be looking at identifying and tracking Bitcoiners.

The latest batch of released data is dotted with allusions to tracking down the senders and receivers of Bitcoin. The papers show that the NSA had leveraged its data harvesting and analyzing abilities alongside efforts to exploit software designed to trick bitcoiners into giving themselves away.

In addition to information about the transfers, the NSA was also gaining information about MAC addresses. Identifying MAC addresses helped the NSA to identify unique hardware involved in bitcoin transactions because the MAC address is tied to hardware in the same way a social security number is tied to an American citizen: for life. The focus is overwhelmingly on Bitcoin, as opposed to other crypto assets.

Taking the information harvest a step further, the NSA was also working on something called OAKSTAR, which was uncovered by Snowden in his initial leak. The Asian sister project to OAKSTAR is something called MONEYROCKET.

Both of these projects comprise of corporate partnerships that enabled the NSA to monitor communications on fiber optic cables. In short, there were secret deals with companies to watch their internet networks and the like. MONEYROCKET was also used as a bait and switch for people seeking anonymity.

It seemed likely that the NSA developed a portion of that project to behave like a VPN, but instead of masking user identity, the information went straight to the NSA. Of course, the information funnel would have been marketed as a fully functional and safe VPN, which highlights the fundamental issue with VPNs. Users have to place their trust in the owner of the VPN server because they can track and record what users do.

Being troubled doesn’t excuse bad ethics

The information we have about what the NSA has been doing, thanks to Mr. Snowden, allows us to make all sorts of assumptions about the sources of information that the government has.

Unethical and illegal data collection is seriously troubling, especially when tied to an agency whose sole purpose is to protect the citizens of the United States. Issues like these undermine the trust in the American government and allow for cases like Ross Ulbricht’s to have the potential to be thrown out.

Leaks like these also serve to strengthen American belief in a secret Deep State that controls everything, which as many as ¾ of Americans at least believe is likely. Anything close to a conspiracy feeds conspiracy theorists. It seems that the NSA has some serious answering to do, as well as some damage control if it wants to regain the trust of its countrymen.

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