The NSA are actively monitoring the bitcoin blockchain, in order to more closely track and identify unlawful use of the cryptocurrency, according to documents leaked this week.
Part of the latest Edward Snowden-leaked paper, the revelations were first published this week in media outlet The Intercept, and identified the wholesale tracking and data capture campaign currently being conducted by the US National Security Agency.
The paper dates back to 2013, suggesting the tracking has already been ongoing for some time, and includes stated objectives from the NSA regarding their ‘mission’ and objectives.
Dubbed ‘Project Oakstar’, the document spelled out how the NSA intends to use the data it collects from the blockchain, which will be primarily targeted towards those engaging in criminal activity through cryptocurrencies like bitcoin.
“[An NSA agent] is hoping to use the access for their mission of looking at organized crime and cyber targets that utilize online e-currency services to move and launder money. These illicit finance networks provide user access to international monetary systems while providing a high degree of anonymity.”
But surprisingly, the report suggests that the NSA have gone beyond simply gathering transactional information from the blockchain – data that is publicly available, but disguised in a pseudo anonymous structure.
According to the report, Project Oakstar also allows the NSA to collect system-specific information on those targeted via the blockchain, by gaining access to the target’s computer. Data available for capture includes IP addresses, billing address details and even passwords, all of which are cross-referenced with blockchain data.
The report does suggest the scope of the techniques are limited, and only applied in targeted cases. Nevertheless, the disclosures have raised some concerns over privacy in the blockchain community, reigniting discussion around one of the most widely debated issues in cryptocurrency.
Many of those bullish on bitcoin view the privacy elements of the blockchain as an essential component of the technology’s attraction. While bitcoin remains the leading cryptocurrency, other tokens have been created that are more focused on privacy, and claim to be completely untraceable – unlike bitcoin, which could theoretically provide enough information to verify user identities.
With the NSA on the case, the rationale behind those pushing for greater privacy today looks more pressing than ever.