Key learning points
- Reports surfaced this week that the government of El Salvador may be monitoring journalists using the spyware ‘Pegasus’.
- Members of the Crypto community are now criticizing this and other abuses by the government and its President, Nayib Bukele.
- The El Salvadoran government has itself denied any involvement, although many believe it is responsible based on the evidence.
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The government of El Salvador, led by pro-Bitcoin president Nayib Bukele, may be keeping tabs on journalists based on recent reports. The news has received backlash from the crypto community.
Journalists were viewed via Pegasus
During an investigation in September 2021, the Citizen Lab at the University of Toronto found that 35 journalists and citizens (with 37 mobile devices) were infected with the spyware ‘Pegasus’.
The spyware was used against several news channels in El Salvador, including: CatClosed, the printing press, Disruptive digital magazine, The World Newspaper, Today’s Diary, And especially, The lighthouse.
The lighthouse said its staff made up 22 of the targeted staff and that it was “under constant surveillance” between June 2020 and November 2021. It also said 226 infections were discovered and two-thirds of the staff were affected.
The Pegasus spyware can monitor text messages, calls, passwords and user locations. In 11 cases at The lighthouse, targets were not just checked; information has been actively stolen or extracted.
The government is the likely culprit
The government of El Salvador is said to be behind this activity. The lighthouse founder Carlos Dada says that “everything points to the Salvadoran government being responsible.”
Citizen Lab, meanwhile, says there is “circumstantial evidence pointing to a strong ties to the government of El Salvador”.
This reasoning is based on the fact that Pegasus was created by the Israeli technology company NSO Group. It is believed that this group only sells the product to governments, and even then only with permission from the Israeli government. Pegasus is generally used by those governments for internal oversight.
Combined with the fact that El Salvador has blocked some of the aforementioned news organizations from press conferences and threatened them with legal violations, the El Salvadoran government has shown a willingness to take tough tactics against these groups.
For its part, the government of El Salvador has denied any role in the surveillance, stating that it is “in no way related to Pegasus and not a customer of the NSO group”. It goes on to say that government officials themselves have been targeted.
NSO, meanwhile, has long claimed to be legit. It says it only sells software to “verified and legitimate intelligence agencies” and that its software is used to prevent criminal activity and terrorism.
Still, Pegasus is generally treated as malware, not only by rights watchdogs like Amnesty International and Access Now, but also by affected companies like Apple and WhatsApp.
News Attracts Bitcoin Backlash
The news that El Salvador has been eyeing journalists has raised concerns in the crypto community as the country has become known for embracing Bitcoin by adopting it as legal tender.
In addition, President Bukele has often presented himself as a savvy member of the cryptocurrency community by “buying the dip” or buying crypto at low prices. He has also used Bitcoin for altruistic purposes, such as building new schools and has harnessed clean volcanic energy to power Bitcoin mining activities.
Now those benevolent actions can be overshadowed. Coindesk’s David Z. Morris wrote that if this week’s allegations are true, “the Bukele administration can no longer be considered a trusted partner” to the Bitcoin community.
In short, the country’s surveillance policies go against the goals and values of the cryptocurrency community, which seeks to provide privacy, security, and freedom from government intervention.
Is the crypto community part of the problem?
Elsewhere, Bitcoin critics have accused the crypto community itself of being part of the problem. Case Piancey, co-host of the podcast Crypto Critics’ Corner, noted the irony in Bitcoiners advocating for transparency and freedom “but fully supporting[ing] a Central American dictator who plants bugs on journalists he doesn’t like.”
Indeed, Bukele’s forceful tactics — such as his armed occupation of Congress and his efforts to fire aging judges — have been widely known since the country adopted cryptocurrency last year. Ethereum creator Vitalik Buterin was also critical of Bukele and its supporters last year, calling the country’s adoption policies “reckless” and criticizing certain Bitcoin maximalists for their uncritical support of Bukele.
Bukele’s online behavior has also raised eyebrows: last year he dubiously labeled his Twitter profile the world’s “coolest dictator” and currently profiles himself as “CEO of El Salvador” on that platform. With this week’s news, Access Now emphasized that Bukele has enabled the online harassment of journalists.
Still, these incidents have not diminished the positive response to Bukele’s ongoing pursuit of Bitcoin. It remains to be seen whether this week’s allegations will be enough to tarnish his image in the eyes of the cryptocurrency community.
Value of Bitcoin Investments Questioned
The news comes days after others questioned whether El Salvador’s investment in Bitcoin will retain its monetary value.
As of September 2021, the country has purchased 1,391 BTC, an amount currently worth $60.2 million. Bloomberg reported on Jan. 12 that purchases in El Salvador are likely to be down 14% from their original value of $71 million.
Moody’s also told Bloomberg that the country’s Bitcoin holdings are “adding to” [its] risk portfolio” and are a questionable choice for a country that has struggled with liquidity in its main economy.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.
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