The whistleblower claims that the National Security Agency (NSA) is keeping a close watch on bitcoin transactions and has the ability to be able to locate senders and receivers of Bitcoin throughout the world.
NSA Monitoring Bitcoin Transactions
The NSA did this by creating a system that allowed the agency to harvest, analyze, and process raw data on global internet traffic. This was done by disguising the code as a piece of popular anonymizing software. This information comes from Snowden documents that date as far back to Mach 2013.
The documents show that the NSA was interested in monitoring several different cryptocurrencies but their main interest has continued to be Bitcoin. The tracking of the cryptocurrency was done by a secret Internet surveillance program code-named OAKSTAR. This project was carried out by several secret corporate partnerships that allowed the agency to monitor communications and get data directly from fiber optic connections.
RT
MONKEYROCKET, a VPN-like service was at the heart of this monitoring. When individuals used the program, instead of hiding their data, the program tapped network equipment. This allowed the NSA to obtain data from several countries and track thousands of users. NSA documents reveal that MONKEYROCKET was released as an anonymization service in 2012 and by 2014 it had over 16,000 users, with most of them coming from Iran and China.
NSA Targets Terrorists And Money Launderers
The main strategy with MONKEYROCKET was to attract users who were engaged in terrorism and those who wanted anonymity. A result of the program's monitoring was that it managed to gather quite a bit of data on Bitcoin users. This included passwords and a user's browser history. The program even managed to harvest MAC address of the devices these users had. Combining all this information would allow the NSA to identify specific Bitcoin wallets and their owners.
Around March 2013, the report had an update on MONKEYROCKET specifically targeting Bitcoin and Liberty Reserve. The latter was a digital currency similar to Bitcoin but its main focus was in the use of illegal activities. The company was based out of Costa Rica and its founder Arthur Budovsky ended up getting a 20-year conviction for connection to a $6 billion money laundering scheme.
Several months after Liberty Reserve ended, Ross Ulbricht, the man behind the Silk Road was arrested by US federal agents. A lot of the transactions on Silk Road were done in Bitcoin and Ulbricht insists that all of the evidence that pointed to him was gathered by NSA and violated the Fourth Amendment – which means that the evidence should be deemed inadmissible in court.