Snowden Leak Reveals: Government Spooks Watch Bitcoin Users

The U.S. National Security Agency reportedly has been monitoring Bitcoin users since 2013 on a global scale — with an express imperative to identify supposedly anonymous users and monitor their online cryptocurrency related activities.

The NSA is an intelligence agency responsible for clandestinely monitoring, collecting and processing communications for the U.S. military.

Classified data obtained and distributed by NSA leaker Edward Snowden alleges that the agency has used unmasking tactics to reveal the identities of Bitcoin blockchain users, reported the Intercept, an intelligence news site.

The creation of Bitcoins is publicly recorded and viewable on a blockchain ledger. The identities of Bitcoin miners are anonymous, identified only via alpha-numeric codes.

The NSA uses an advanced computer program called OAKSTAR to monitor Bitcoin user’s online activities, the Intercept reported.

Another program, called MONKEYROCKET, is employed to specifically isolate and track down Bitcoin users who initiate digital currency transactions.

Snowden’s leaked data suggests that the MONKEYROCKET program was used to try to identity anyone who sent or received digital currency online.

The classified data revealed by Snowden is heavily redacted, though publicly available information may corroborate the Intercept’s explosive report.

Along with the NSA, the Department of Homeland Security (DHS) also was alarmingly concerned in 2013 by the rising popularity of cryptocurrencies and their potential to enable criminal activity online.

Brian de Vallance, then the acting assistant secretary for legislative affairs for the DHS, wrote a November 2013 letter to Congress that said, “with the advent of virtual currencies and the ease with which financial transactions can be exploited by criminal organizations, DHS has recognized the need for an aggressive posture toward this evolving trend.”

Privacy conscious

Cryptocurrencies can be created by anyone with a computer and are not regulated by any government or financial regulatory authority. Sending them online is virtually untraceable.

Anonymity means they can easily be used for criminal enterprise, money laundering and the financing of terrorist acts, critics argue. This particular concern may be the impetus behind the NSA’s efforts.

The NSA’s alleged activities, however, pose a threat to online cryptocurrency transaction privacy. For instance, the warrantless collection of Bitcoin user data could be used for prosecution of any crime.

Emin Gun Sirer, associate professor and co-director of the Initiative for Cryptocurrencies and Contracts at Cornell University, believes that Bitcoin users are “privacy conscious” when it comes to financial transactions and “will switch to privacy-oriented coins.”

Referencing Bitcoin’s mandate for privacy, Sirer said, “when the adversary model involves the NSA, the pseudonymity disappears. You should really lower your expectations of privacy on this network.”

Investing 101: Do Bonds Belong in Your Portfolio?

Portfolio diversification is a strategy that helps investors manage risk. Investors often choose to diversify among industries for stocks, for instance. But they also consider diversification within different assets types.

Should You Use Extra Cash to Invest or Pay Off Debt?

Deciding between repaying debt repaying versus investing may seem impossible. Everyone’s financial situation is different and only you know from an emotional standpoint what might work best. Start with your

6 Healthy Morning Rituals That Make the Most of Your Day

Whether you are a “morning person” or not, how much thought do you give to the start of your day? Do you realize that by adopting a few simple morning

How to Read and Understand an Options Quote

When you begin trading options you'll spend part of your research scanning for the right options to buy. When you find a list of options, then you'll need to learn

Test Your Financial Advisor’s Loyalty with These Simple Questions

You have a financial advisor in order to make certain you have budgeted your money correctly, have planned for future financial needs, and, in some cases, to turn some of

Sell Puts the Smart Way: Get Out Before Expiration Nears

Selling put options can be a great way to help increase the value of your portfolio without taking on too much risk. At its core, a put sale allows investors

refinancing

4 Pros and 1 Con of Refinancing Your Home

Two years ago the 30-year fixed mortgage rate was 4.6%. Today it is 2.9%. If your mortgage is in the high threes, you should consider refinancing. Refinancing would lower your

Easy Finance Tip: How to Calculate Your Net Worth

To calculate your net worth, just subtract your liabilities (what you owe) from your assets (what you own). While the equation is simple, it's important to get a snapshot of

Just a Few Bad Market Years Can Slam Your Retirement: How to Cut Your Risk

I believe one very underappreciated risk for investors preparing for retirement is the concept of “sequence of returns.” Sequence of return risk is the danger that the timing of withdrawals

Tai Chi Can Benefits for Those with Chronic Diseases

The Chinese martial art of tai chi can be beneficial to people suffering with chronic illnesses, according to research in the British Journal of Sports Medicine (2015), conducted by Dr.

Two Measures of Options Volatility That Matter

Most people often have a notion of what volatility means. They understand, at least conceptually, that it has to do with data of situations that vary over time. Weather is

3 Financial Habits to Adopt Before You Retire

Nobody wants to work until the day they die. We all want to get to a point where we can simply sit down, relax, and enjoy life.  Consider adopting these