Key points to remember
- Reports emerged this week that the government of El Salvador may be monitoring journalists using the “Pegasus” spyware.
- Members of the crypto community are now criticizing this and other abuses by the government and its chairman, Nayib Bukele.
- The Salvadoran government itself has denied any involvement, although many believe it is responsible based on the evidence.
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The Salvadoran government, led by pro-Bitcoin President Nayib Bukele, may be monitoring journalists based on recent reports. The news drew backlash from the crypto community.
Journalists were monitored via Pegasus
During an investigation in September 2021, the Citizen Lab at the University of Toronto discovered that 35 journalists and citizens (with 37 mobile devices) had been infected with the “Pegasus” spyware.
The spyware has been used against several Salvadoran media, including ChatClosed, The printing press, Disruptive Digital Magazine, The newspaper of the world, Today’s newspaper, and especially, Lighthouse.
Lighthouse said his staff accounted for 22 of the targeted staff and were “under constant surveillance” between June 2020 and November 2021. He also said 226 infections have been discovered and two-thirds of his staff have been affected .
Pegasus spyware is capable of monitoring users’ text messages, calls, passwords and locations. In 11 cases at Lighthouse, the targets were not simply monitored; information has been actively stolen or extracted.
The government is probably the culprit
The government of El Salvador is believed to be behind this activity. Lighthouse Founding director Carlos Dada says “everything indicates that the Salvadoran government is responsible.”
Citizen Lab, meanwhile, says there is “circumstantial evidence indicating a close connection to the Salvadoran government.”
This reasoning is based on the fact that Pegasus is created by the Israeli technology firm NSO Group. This group is believed to only sell the product to governments, and even then only when authorized to do so by the Israeli government. Pegasus is generally used by these governments for internal surveillance.
Combined with El Salvador blocking some of the above news organizations from press conferences and threatening them with legal violations, the Salvadoran government has demonstrated a willingness to use tough tactics against these groups.
For its part, the Salvadoran government has denied any role in the surveillance, saying it “is in no way related to Pegasus and is not a customer of the NSO Group”. Furthermore, he indicates 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.
Yet Pegasus is generally treated as malware, not only by rights watchdogs such as Amnesty International and Access Now, but also by affected companies such as Apple and WhatsApp.
News Draws Bitcoin Backlash
The news that El Salvador may be watching journalists has raised concerns in the crypto community, as the country has become well known for embracing Bitcoin by approving it as legal tender.
Additionally, President Bukele has often presented himself as a savvy member of the cryptocurrency community by “buying the dive” or buying cryptos at low prices. He also used Bitcoin for altruistic purposes such as building new schools and harnessed clean volcanic energy to power Bitcoin mining operations.
Now these benevolent actions can be overshadowed. David Z. Morris of Coindesk wrote that if this week’s accusations are true, “the Bukele administration can no longer be considered a trusted partner” to the Bitcoin community.
In short, the country’s surveillance policies run counter to the goals and values of the cryptocurrency community, which are to ensure privacy, security, and freedom from government interference.
Is the Crypto Community Part of the Problem?
Elsewhere, Bitcoin critics have blamed the crypto community itself for being part of the problem. Case Piancey, co-host of the Crypto Critics’ Corner podcast, noted the irony that Bitcoiners advocate transparency and freedom “but totally support[ing] a Central American dictator who plants bugs on journalists he doesn’t like.
Indeed, Bukele’s heavy-handed tactics, such as his armed occupation of Congress and his attempts to remove aging judges, were widely known when the country embraced cryptocurrency last year. Ethereum creator Vitalik Buterin also slammed Bukele and his supporters last year, calling the country’s adoption policy “reckless” and criticizing some Bitcoin maximalists for their outspoken support for Bukele.
Bukele’s online conduct has also raised eyebrows: last year he called his Twitter profile the world’s “coolest dictator” and currently presents himself as the “CEO of El Salvador” on that platform. With this week’s news, Access Now pointed out that Bukele has enabled the harassment of journalists online.
Yet these incidents have not diminished the positive responses to Bukele’s continued pursuit of Bitcoin. Whether this week’s accusations will be enough to tarnish his image in the eyes of the cryptocurrency community remains to be seen.
The Value of Bitcoin Investments Called into Question
The news comes days after others questioned whether El Salvador’s investment in Bitcoin would retain its monetary value.
Since September 2021, the country has bought 1,391 BTC, an amount that is currently worth $60.2 million. Bloomberg reported on January 12 that purchases from El Salvador were likely down 14% from their initial value of $71 million.
Moody’s also told Bloomberg that the country’s bitcoin holdings “add to [its] portfolio at risk” and are a questionable choice for a country that has experienced liquidity problems in its main economy.
Disclosure: At the time of writing this article, the author of this article owned BTC, ETH, and other cryptocurrencies.
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