Crypto AG was a Swiss company specialising in communications and information security founded by Boris Hagelin in 1952.
[2] The company had about 230 employees, had offices in Abidjan, Abu Dhabi, Buenos Aires, Kuala Lumpur, Muscat, Selsdon and Steinhausen, and did business throughout the world.
[5][6][7] Crypto AG sold equipment to more than 120 countries, including India, Pakistan, Iran, and multiple Latin American nations.
Although neither the Soviet Union nor People's Republic of China were customers of Crypto AG, several of their friendly countries had the company's equipment.
[1][8][9] On 11 February 2020, The Washington Post, ZDF and SRF revealed that Crypto AG was secretly owned by the CIA in a highly classified partnership with West German intelligence, and the spy agencies could easily break the codes used to send encrypted messages.
[5] The official reason was that it was transferred as a result of a planned Swedish government nationalization of militarily important technology contractors.
Machines:[18] According to declassified (but partly redacted) US government documents released in 2015, in 1955 (just after encryption was added to the US Munitions List on November 17, 1954) Crypto AG's founder Boris Hagelin and William Friedman entered into an unwritten agreement concerning the C-52 encryption machines that compromised the security of some of the purchasers.
Providing such information would have allowed the intelligence agencies to reduce the time needed to crack the encryption of messages produced by such machines from impossibly long to a feasible length.
Further evidence suggesting that the Crypto AG machines were compromised was revealed after the assassination of former Iranian Prime Minister Shapour Bakhtiar in 1991.
Buehler was interrogated for nine months but, being completely unaware of any flaw in the machines, was released in January 1993 after Crypto AG posted bail of $1m to Iran.
Swiss media and the German magazine Der Spiegel took up his case in 1994, interviewing former employees and concluding that Crypto's machines had in fact repeatedly been rigged.
Le Temps has argued that Crypto AG had been actively working with the British, US and West German secret services since 1956, going as far as to rig instruction manuals for the machines on the orders of the NSA.
[31][32] The export controls preventing Swedish authorities from obtaining equipment from Crypto International was reportedly a reason behind Sweden's decision.