Crypto International blames Swiss government for imminent demise

Crypto International says its devices bear no resemblance to the controversial encryption machines made by Crypto AG (pictured). Keystone / Ennio Leanza

A company whose name has been associated with a spying scandal blames the Swiss government for shedding more than 80 staff.

Crypto International says it has been unfairly tainted by its predecessor, Crypto AG, which stands accused of allowing the CIA backdoor access to its encryption devices.

Crypto International took over Crypto AG’s brand and many staff in 2018, only for revelations to emerge this year that Crypto AG’s former products were seriously compromised. The ensuing uproar resulted in a government inquiry and a criminal probe by federal prosecutors.

The Swiss authorities face calls from politicians to uncover whether previous ministers knew of the involvement of foreign intelligence services. This political dimension, along with a separate criminal investigation, has effectively imperilled Swiss jobs. 

Earlier this month, Crypto International said it would have to lay off 83 of its 85 staff. It now looks probable that the company will withdraw from Switzerland altogether. Its Swedish owners, Andreas and Emma Linde, accuse the Swiss government of driving the firm into the ground with its actions.

This is because the governing Federal Council refuses to consider awarding the company export licenses whilst it is under criminal investigation. This process could last many months or years, effectively ending the firm’s hopes for survival in Switzerland. It will instead, retreat to its Swedish branch.

“All our efforts to convince the Swiss authorities that our company never had anything to do with the former Crypto AG were in vain,” the couple told the Neue Zürcher Zeitung newspaper.

They say that their new technology bears no resemblance to the controversial Crypto AG hardware that allegedly allowed the German, British and US intelligence agencies to spy on other countries.

The encryption devices are designed to secure critical infrastructure, such as telecommunications and energy, from cyber attack. Despite the recent negative headlines, Crypto International says foreign governments, including some within the European Union, continued to place orders.

Switzerland has even ordered encryption devices, which had first been thoroughly vetted by military experts, the Lindes claim. But the export ban means the company cannot complete foreign orders.

Crypto International acquired the Crypto AG brand in 2018 despite allegations by the BBC three years earlier that the company had collaborated with US intelligence agencies in the 1950s. Further revelations appeared in February that alleged a wider abuse of the encryption devices that lasted decades.