Crypto International AG →
Crypto AG was a manufacturer of
and communications equipment, based in Steinhausen (Switzerland),
with a world-wide customer base and offices in several countries.
It was established in 1952 by Russian-born Swede
who gradually moved the activities of his Swedish company
AB Cryptoteknik to Switzerland after restrictive laws had been proposed
in Sweden. As a tribute to its founder, the company logo
was based on his name. Crypto AG
was liquidated on 31 October 2019 after its activities had been taken over
by Crypto International AG.
➤ Crypto AG (Hagelin) cipher machines
As Switzerland is a neutral country, Crypto AG could do business througout
the entire world, with virtually no restrictions.
The company's ownership has always been a mystery,
supposedly even to the management .
In the past, the company has often been
accused of providing
backdoors to make their devices readable for foreign
Crypto AG has always denied this.
It has meanwhile become clear that from 1951 to 1960 a
Gentleman's Agreement (GA)
existed between Boris Hagelin
and the US
National Security Agency (NSA),
and that from 1960 to 1970, Crypto AG had a
with the American
Central Intelligence Agency (CIA)
But the most striking discovery was that, in 1970,
Crypto AG had secretly been purchased by the German BND
and the American CIA, in a project known
as Operation THESAURUS
— later renamed RUBICON.
In 1994, the CIA became the sole owner, and in 2019 the company was
dissolved, after the product range and some personnel
had been taken over by
Crypto International AG
The history of Crypto AG starts around 1922, when Russian-born Swede
Boris Hagelin was asked by the Swedish Nobel family to become a financial
controller at Arvid Gerhard Damm's company AB Cryptograph in Stockholm.
The Nobel family had put a significant sum of money into Damm's business and
wanted the son of a friend, Boris Hagelin, to look after their
By 1925, Hagelin had become the acting director of the company, whilst
AG Damm was persuing business in France.
In the meantime, Hagelin had developed
a cipher machine that was based on Damm's erlier design of the
B-18. He improved the design by adding his (now) famous pin-wheels,
and offered it to the Swedish Army.
After AG Damm died in 1927, AB Cryptograph was liquidated in 1932 and
replaced by AB Cryptoteknik, Hagelin's first own company. In 1935, he
developed the C-35
at the request of the French Army — the first of the C-machines.
The C-35 was followed by the
the machine that would change his life. At the outbreak of WWII,
he took the machine to the US, where an improved version became known as
By the end of the war,
over 140,000 units had been built in America, and Hagelin was a
After the war, when Sweden was about to introduce several restrictive laws,
Hagelin decided to move to neutral Switzerland, where he settled down in
Zug under the name Crypto AG.
After a brief cooperation with
Dr. Edgar Gretener involving
online cipher machines, he decided to go his own way, and developed
the TC-52. Over the course
of the following years, the business was gradually moved from Stockholm
(Sweden) to Zug (Switzerland), where it is still located today.
➤ More about Boris Hagelin
➤ Read Hagelin's personal biography (English)
➤ Original manuscript of the biography (German)
Over the years, Crypto AG has regularly been accused of selling
rigged equipment or, in more popular terminology: equipment with a
that makes some of the devices readable for
certain Intelligence agencies (such as the NSA). As Crypto AG
was based in (neutral) Switzerland, they were able to supply equipment
to most countries in the world with virtually no restrictions.
Despite Hagelin's worldwide success and the lack of evidence of
rigged machines, the rumours were persistant, not least because of
the increased suspicion from people within the company. Some of
them reached out to the press – such as in the case of sales
representative Hans Bühler (see below)
– and sometimes the press
reached out to them. In December 1995, The Baltimore Sun published
a series of short articles 
about how the NSA had supposedly
influenced the machines of the Swiss company Crypto AG.
Such stories were always rejected as 'pure invention'.
In 2014, it came to light – from released documents of the
Friedman Collection – that there had been some kind of
between Hagelin and the NSA
from 1951 onwards. As part of this deal, Hagelin would not sell
secure machines to certain countries.
And in February 2020, ZDF,
SRF and The Washington Post revealed
that in 1970 the company had been secretly purchased by the BND
and the CIA, and that from 1994,
CIA had been the exclusive owner
➤ The Gentleman's Agreement (1951-1969)
➤ Operation RUBICON (1970-2018)
In 2014, the NSA
released more than 7600 documents , amounting to over
52,000 pages of historical material relating to the career of
William F. Friedman
(1891-1969), who is considered the dean of American
Cryptology. Although some documents have been fully declassified,
most of them are still heavily redacted as – according to the NSA –
they may contain information that could harm national security
or any individuals or companies mentioned in those documents.
It is no secret that, on a personal level,
and Friedman were good
friends. They both grew up in the Russian Empire, and shared an
interest in historical cipher machines. Furthermore, they both
suffered from depressions.
The two became friends during WWII,
after Hagelin had 'escaped' to the US
in March 1940 and sold the design of the
M-209 cipher machine
to the Americans, who built no less than 140,000 of them.
After the war, they maintained their friendly contact.
Among the released documents are hundreds of letters between
Friedman and Hagelin. Most of these letters are of a personal nature,
but some of them contain explicit NSA material. Much of this
material was confiscated by NSA several years after Friedman's death.
An AFSA report of 12 April 1951
speaks of: AFSA negotiation via C/A with Mr. Hagelin
of AB Cryptotechnik.
In a memorandum of 5 February 1954, the NSA expresses its concerns
about newly announced Hagelin cipher machines, such as the
and the T-52,
and asks Friedman to investigate this.
Friedman is allowed to make a proposal to Hagelin on behalf of the
director of the NSA (DIRNSA).
It is further agreed that Friedman will use his personal stationary
and his home address for any further correspondence with Hagelin,
in order not to ring any bells. The result is that Hagelin and DIRNSA
enter into what they call a
In the following years, the details of the understanding –
by then known as the
Gentleman's Agreement – are revised several times.
➤ The Gentleman's Agreement
In 1992, Crypto AG's top sales representative
– Hans Bühler –
was arrested in Iran on dubious grounds. He spent the next nine months in
an Iranian prison – where he was interrogated three times a day – and was
released in January 1993, after a bail of US$ 1,000,000 had been payed.
After his release, he was severely traumatised, and claimed that the
company had not done enough to expedite his release. He also claimed that the
cipher machines that Crypto AG had sold to Iran (and to other countries) were
rigged; in other words: that they contain a
backdoor, and that he was
repeatedly questioned over that.
In the following months, Bühler got caught in a tangle of disputes, which
eventually caused him to get fired. This didn't stop him from talking to the
press though, and became the subject of Res Strehle's book, shown in the
image on the right.
Since Hans Bühler went public, some of his former colleagues have decided
to step forward as well. Former software engineer Jürg Spörndli
confirmed that the company was visited frequently by
NSA specialists and that
on several occasions he was instructed by his manager to swap his
cryptographic algorithm, for an alternative one
(supposedly supplied by the NSA)
that was clearly weaker .
This case shows great similarity with the
deliberate weakening of the PX-1000.
The Swiss Federal Police investigated some
of the allegations but said it was not able to find any proof.
In February 2020 it was revealed that at the time of the Bühler affair,
the company – Crypto AG – was jointly owned by the German BND and
the American CIA, which means that Bühler and his dissident colleagues
had been right all along. According to internal CIA
and BND documents,
the case of Hans Bühler
– to them known by the cryptonym HYDRA –
was the most damaging one in the history of
Operation RUBICON —
the secret purchase of Crypto AG (MINERVA).
In fact it was one of the reasons for the German Government to
back out of the joint venture in 1994 .
➤ More about Hans Bühler
Operation THESAURUS / RUBICON
In January 2018, it was announced that on 1 February 2018, the company
would be split into two new companies that would handle the national
and the inter national (Cyber) security business respectively .
The approximately 150 staff
would be split evenly between the two companies:
Both companies will
remain in Zug (Switzerland), although the international branch is now
part of the Swedish
Crypto International Group AB, 1 owned by the Swedish
entrepreneur Andreas Linde.
The national branch is the result of a
management buyout, led by Robert Schlup, Giuliano Otth (previously the
CEO of Crypto AG) and Thomas Meier (CEO of the affiliated
Note that Crypto International AG
is a completely new firm, registered at the existing address, whilst
the original Crypto AG was officially liquidated on 31 October 2019.
The company's assets were transferred to The Crypto Group AG (TCG) on the same day.
The assets of the licencing company – Prime Technology Licencing AG (PTL) –
had already been transferred to TCG on 17 January 2018.
PTC was liquidated on 17 January 2018.
TCG is currently in liquidation (Jan 2020).
- US 2,089,603 - Ciphering machine (C-35)
Boris Hagelin. Filed 23 August 1935.
About → C-35 machine.
- US 2,247,170 - Ciphering machine (BC-38)
Boris Hagelin. Filed 28 November 1938.
About → BC-38 machine.
- US 2.394,765 - Ciphering and deciphering mechanism
Boris Hagelin. Filed 24 July 1939.
- US 2,765,364 - Keying mechanism (CX-52)
Boris Hagelin. Filed 5 October 1940 as → US 188,546 1
Placed under Secrecy Order on 14 September 1951 at request of AFSA (NSA).
Released on or after 27 March 1952. Published 2 October 1956.
- US 2,802,047 - Electric switching device for ciphering aparatus
Boris Hagelin. Filed 16 October 1953. Published 6 August 1957.
This patent actually interferes with a secret US patent for the same,
filed around 1940, but Hagelin was not informed about this in 1953.
The principle of re-entry descriped in this patent was also used
in the American KL-7 (then: AFSAM-7)
and later in the Russian Fialka.
- US 4,095,046 - Electronic ... in the form of a Pocket Calculator
Peter Frutiger and Bruno Gemperle, on behalf of AEH.
Filed 1 November 1976, priority date 11 November 1975.
Declassified by NSA on 17 June 2014 (EO 13526).
- Boris Hagelin, Die Geschichte der Hagelin-Cryptos
Original manuscript by Boris Hagelin in German language. Zug, Fall 1979.
- Boris Hagelin, The Story of Hagelin Cryptos
English translation of the above. BCW Hagelin, Zug, Spring 1981.
Later edited by David Kahn and published in Cryptologia, Volume 18, Issue 3, July 1994, pp 204-242.
- Hans Stadlin, 100 Jahre Boris Hagelin 1982-1992 (German)
Crypto AG. Crypto Hauszeitung Nr. 11. Jubilieumausgabe September 1992.
- Wikipedia, Crypto AG
Retrieved July 2015.
- NSA, William F. Friedman Collection of Official Papers
Retrieved July 2015.
- Bruce Schneier, NSA backdoors in Crypto AG Cipher Machines
11 January 2008. Retrieved July 2015.
- Bruce Schneier, Crypto-Gram, June 15, 2004 - Breaking Iranian Codes
15 June 2004. Retrieved July 2015.
- BBC Radio 4, Document - The Crypto Agreement
Evidence of a secret deal between Crypto AG (Hagelin) and the NSA.
28 July 2015, broadcast, presented by Gordon Corera.
- Crypto AG, Crypto AG is gearing up for future growth
24 January 2018.
- Scott Shane & Tom Bowman, Spy string: Few at the Swiss factory knew...
Baltimore Sun, 10 December 1995.
- Scott Shane & Tom Bowman, NSA's ... Rigged encryption machines
Baltimore Sun, 10 December 1995.
- Crypto Museum, Operation RUBICON
- Verschlüsselt, Der Fall Hans Bühler
ISBN 3-85932-141-2. 1994.
- Line Dugstad & Osman Kibar, Den skjulte partneren
Dagens Næringsliv. Website. 2 january 2015 (updated 13 February 2015).
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© Crypto Museum. Created: Friday 17 July 2015. Last changed: Friday, 17 April 2020 - 21:19 CET.