Nayib Bukele Is Not the Bitcoin Hero We Need

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New reports have found strong evidence that Salvadoran President Neb Bokel sought to undermine freedom of expression in the Central American country. According to a joint investigation by Salvadoran news outlet El Faro, Toronto-based Citizen Lab and digital rights nonprofit Access Now, at least 22 El Faro journalists have been infected with spyware known as Pegasus over the past two years. Other journalists and human rights activists were also targeted. Pegasus has previously been used against journalists or other undesirable people in countries such as India, Kazakhstan, Mexico, Morocco, Rwanda and Saudi Arabia.

The report should trigger a serious reversal among bitcoins. While Bukele’s move to adopt Bitcoin as an alternative to the US dollar in El Salvador has great potential to free the developing world from the yoke of the global financial institution, his authoritarian behavior here is anathema to the libertarian electronic ideals that underpin the cryptocurrency.

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Pegasus, produced by the Israeli company NSO Group, allows not only monitoring of the victim’s communications, but also deeper access to device data. The El Faro investigation, whose results were validated by Amnesty International, found that data had been stolen from the devices of at least 11 journalists. The tool has previously been used in violent repression: NSO and Pegasus have been linked to the murders of Mexican dissident journalist Cecilio Pineda Berto and Washington Post columnist Jamal Khashoggi.

Up until this point, I was skeptical about attempts to paint Bukele as an emerging dictator. Much of the anti-Bkele rhetoric in the English-speaking press focused on his replacement of judges and a single theatrical display of military force, along with derogatory statements from governments of the developed world. These things struck me as hard to take at face value given El Salvador’s very complex recent political history, entrenched corruption and the responsibility of countries like the United States to foment instability that may have made strong-arm tactics essential to Bukele’s reform agenda.

But spying on dissident journalists is more reprehensible to me than any other allegations about Bukele so far. I am admittedly biased, but suppressing information is a fundamental attack on the good and fair functioning of any society.

See also: ‘Authoritarian lover’ from Bitcoin

This puts bitcoin in particular in a bind. Rooted in cryptographic anarchist ideals and digital liberalism, the Bitcoin community is ideologically hostile to both state power and digital surveillance. This sentiment is so strong that many in the community are concerned about a provision in El Salvador’s law that appears to force the acceptance of bitcoin by retailers. The new report should offend these critics at least as much.

It is worth noting that this is not the first time that the cryptocurrency industry has been asked to pass judgment on the ethics of state-backed digital espionage. After Coinbase acquired a blockchain analytics company called Neutrino in early 2019, investigators and other reporters and I shed light on the company’s deep ties to the Black Hat organization known as Hacking Team. Hacking Team sold invasive spyware to repressive regimes that used the tools to target dissidents and journalists. After a backlash from the crypto community, Coinbase has fired former Neutrino hacking team members, acknowledging that the acquisition was a failure of due diligence.

The decision now facing Bitcoin advocates may be more complex. El Salvador is a valuable testing ground for a digital currency, but if El Faro’s results are correct, it seems clear that Bukele’s management can no longer be considered a reliable partner. Beyond the simple ethics of supporting a regime that seeks undemocratic methods to suppress its critics, the Bitcoin community must be vigilant about public perception, given the continuing widespread hostility toward the cryptocurrency. A leader who wants to use black ops spyware against his own citizens is not an acceptable figurehead to spread Bitcoin adoption.

I sympathize almost entirely here with the journalists who have been targeted and harassed for trying to inform Salvadorans of their leadership. But it’s also personally disappointing: I was hoping to visit El Salvador sometime this year and report on the state of the bitcoin project there. This now seems considerably less feasible because it would likely expose me, and any other international journalists who travel there, to constant surveillance by Kneipp Böckel and his allies.

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