The Swiss company Crypto produced manipulated encryption devices for decades. The CIA and the BND, Germany’s intelligence agency, were able to use them to spy on half the world. This spy thriller was first exposed in February 2020 and a few weeks ago, an official report was released.
By Dominik Landwehr
On May 13, 1952, a Swede called Boris Hagelin founded Crypto AG. The first headquarters were in the founder’s chalet in the central Swiss town of Zug. The secretary worked in the living-room while the technicians assembled the machines in the garage. But Crypto was not what we would today call a start-up: Hagelin had arrived in Switzerland four years earlier well equipped for success; he had expertise, connections and above all, a well-established company in Sweden, A.B. Crypoteknik.
Hagelin devices and the US
Before the Second World War, Hagelin had developed an encryption machine that was about the size of a lunch box and therefore particularly suitable for use in the field: the M-209. The United States bought it and produced about 140,000 under licence. The Americans were able to consult closely with the inventor – after Norway and Denmark were occupied by the Nazis, Hagelin decided to emigrate to the US in 1940. There he worked closely with the cryptologist William F. Friedman, one of the founders of the Signal Intelligence Service, the precursor of the NSA. The two men became close friends and Friedman visited Hagelin after the war in Switzerland. In 1944, Hagelin returned to Sweden and in 1948, he emigrated to Switzerland.
One reason for this was Switzerland’s stance in the Cold War: Sweden, like Switzerland, was a neutral country, but it defined its neutrality more rigidly. Sweden restricted exports of encryption devices after the war beca ..