On Tuesday, The Intercept reported that Edward Snowden furnished documents which demonstrate that the National Security Agency (NSA) has kept a careful eye on digital currencies, including bitcoin, through codenamed projects like OAKSTAR and MONKEYROCKET.
Journalist Sam Biddle explained that the documents show that the NSA "worked urgently to target Bitcoin users around the world — and wielded at least one mysterious source of information to 'help track down senders and receivers of Bitcoins.'"
He added that "The data source appears to have leveraged NSA's ability to harvest and analyze raw, global internet traffic while also exploiting an unnamed software program that purported to offer anonymity to users, according to other documents."
The NSA's program isn't a run-of-the-mill blockchain explorer either. While ETHNews has previously reported on government contracts with Chainalysis, this effort appears to go much further.
Biddle assessed, "The tracking may also have involved gathering intimate details of these users' computers. The NSA collected some Bitcoin users' password information, internet activity, and a type of unique device identification number known as a MAC [media access control] address, a March 29, 2013 NSA memo suggested."
The same document, he said, includes discussion from analysts about "tracking internet users' internet addresses, network ports, and timestamps to identify 'BITCOIN Targets.'"
The latest Snowden revelations raise questions about the Fourth Amendment – which includes the due process clause – as well as issues of privacy and surveillance. Of course, SHA-256, a cryptographic hash function used in parts of the bitcoin network, is part of SHA-2 (Secure Hash Algorithm 2), which was designed by none other than the NSA.