Edward Snowden has released classified US NSA documents that reveal the agency was keeping tabs on users of Bitcoin and Liberty Reserve. The activity seems to go back to as far as 2013 according to the leaked reports. These documents suggest that the United States’ National Security Agency (NSA) was, spying on bitcoin users worldwide. The report had surfaced back in March 2013 and contains code names, numbers, and blacked-out lines.
“SSG11 Analysts have found value in the MONKEYROCKET access to help track down senders and receivers of Bitcoins (a decentralized digital currency system, wherein the units are known as Bitcoins or BTC.) (SNM)”
More importantly, the NSA has collected personal information such as some Bitcoin users’ internet activity, password and username information and MAC address as outlined in a memo from March 29, 2013.
While one of the main and fundamental functionalities of the blockchain is to serve as decentralized, distributed public ledger, these principles seem to have given the NSA an impetus to discover as much as possible. The agency was authorised to monitor communications by harvesting internet data transferred along fiber optic cables.
And while Bitcoin seems to have been the priority target of the NSA, Liberty Reserve didn’t go unnoticed either. Even though it was officially headquartered in Costa Rica, the website was charged with running a “laundering” scheme worth $6 billion, resulting in 20-year incarceration conviction for its founder from Ukraine. It happened just 2 months after the dates cited in the March 2013 NSA report leaked by Snowden.
Since the initial Mr. Snowden revelations of the Agency’s widespread data gathering streams and programs, enthusiasts have long suspected something of the sort was happening in crypto. Document sentences filled with snippets such as “help track down senders and receivers of Bitcoins” will only fuel more speculation.
And while the dates might be a simple coincidence, the leaked documents suggest that the government is trying to tighten its grips on the overall blockchain movement. Yet, the cryptocurrency community seems incentivized actions of the kind to further distance themselves from currently existing centralized financial systems.
The NSA documents confirm the ease at which the Agency could identify users in particular, the report detailed:
“hinting that NSA may have been using its Xkeyscore searching system, where the Bitcoin information and wide range of other NSA data was cataloged, to enhance its information on Bitcoin users. An NSA reference document indicated that the data source provided ‘user data such as billing information and Internet Protocol addresses.’ With this sort of information in hand, putting a name to a given Bitcoin user would be easy,”
Xkeyscore (XKS) came into popular consciousness through Mr. Snowden’s first revelations. XKS was used by the NSA globally, collecting internet data daily, and shared with most English-speaking, industrialized nations. Its source code was publically analyzed in Germany during Summer of 2014.
More disturbing still, is the assumption the NSA played a role in the prosecution of Ross Ulbricht, now serving double life without the possibility of parole and awaiting a possible Supreme Court reprieve. Mr. Ulbricht argued the Federal Bureau of Investigation’s recounting of their case left serious holes. If it could be proved the NSA, used unethical, illegal means to obtain evidence, then the entire prosecution against him would be compromised.