The Crypto AG scandal, a stain on Switzerland's image
The revelations of the complicity of the Zug-based company with the American and German intelligence services until the 1990s risk calling into question the attractiveness of the country for foreign companies. Cryptocurrency players claim to have nothing to do with this company.
"A serious scandal", according to the former Ticino prosecutor and investigator of the Council of Europe Dick Marty. The Crypto AG scandal could long tarnish the image of security and trust that Switzerland wishes to convey. Especially since the Zug-based firm which supplied fake technologies to the CIA and German intelligence between 1970 and 1993 has a sister company, InfoGuard, whose products are used by the largest Swiss banks. What is undermining Switzerland's attractiveness to technology companies?
What image damage for Switzerland?
To begin with, what image are we talking about, asks Steven Meyer, director of the cybersecurity company ZENData. “The image of security associated with Switzerland contains a strong emotional dimension and I am not sure that it is really deserved. The image of our country was already considerably tarnished when the data of American customers of Swiss banks were transmitted to the American authorities, starting in 2008.”
Nevertheless, continues the Geneva specialist, “in the cybersecurity industry, Switzerland is perceived as a place with ethics, principles, a climate of trust. But it is precisely these aspects that have been affected by the Crypto AG scandal.” A case that cybersecurity players had heard about in 2008, but not with the level of detail provided by the
revelations of this week – during which the Swiss Cyber Security Days were held in Fribourg.
Still in relation to the image, the Crypto AG scandal could contaminate the cryptocurrency sector, because of the phonetic proximity. “The ecosystem created in Switzerland around the blockchain has nothing to do with Crypto AG, whose actions took place long before the arrival of the blockchain. We believe that the impact on the reputation of Switzerland will be limited,” replies Jérôme Bailly, from the Crypto Valley Association.
Will technology companies leave Switzerland, or hesitate to set up there?
The Crypto Valley Association has received “no sign of concern or request for information from foreign companies planning to set up in Zug or elsewhere in Switzerland”, continues Jérôme Bailly.
A company has made a mistake, that does not mean that the evil is endemic, continues Steven Meyer, of ZENData, who nevertheless draws a comparison with the Panama Papers affair, these revelations about the dubious practices of a law firm: “ Only Mossack Fonseca was implicated in the Panama Papers, but following the scandal, many other law firms and banks left Panama.
What implications for the future?
The extent of the Crypto AG affair will depend above all on the reaction of the authorities and the measures that will be taken for the future, estimates Rufo Guerreschi, executive director of the Trustless Computing Association, a structure that wants to create a new form of certification in matters of cybersecurity.
"Instead of trying to minimize this affair, the authorities should make it an opportunity to set up new standards for computer security, and make it a competitive advantage for the country", details the entrepreneur who has worked for the incubator. Fusion in Geneva, whose start-up Trustless.ai manufactures a hyper-secure communication device. The Swiss Digital Initiative, launched from Geneva last September, is pushing for initiatives in this direction for the web.
Otherwise, Switzerland will not be able to remain a country renowned for its security, concludes our interlocutor. The country would thus remain associated with the image of Crypto AG. A country like the others, in a way.