Swiss intelligence services are reportedly looking into the possibility of using bitcoin to pay intelligence sources abroad.

Documents unearthed in a corruption investigation reveal that the Swiss Federal Intelligence Service (FIS) examined the possibility of using bitcoin in a document dated February 2014, according to the Tages Anzeiger newspaper.

The investigation originally targeted persons involved in the so-called Giroud Affair, which revolved around certain business deals made by winemaker Dominique Giroud, who was arrested in June 2014.

Along with Giroud, a professional hacker, a private detective from Geneva and an FIS agent were also remanded in custody on a wide range of allegations.

Untraceable payments

Notably, a Power Point presentation entitled Bitcoin Feb2014 was found on the private investigator’s computer, outlining how the intelligence service could use the cryptocurrency to make sensitive payments.

The digital document describes how the FIS could start paying its intelligence assets abroad in bitcoin without leaving a paper trail.

Under the scheme, an unnamed company in Switzerland would be commissioned by the intelligence service to buy bitcoins, which would then be used to make the payments. The recipients, described as FIS sources located abroad, would then exchange the bitcoins for fiat currency.

The document lists the following advantages of using such an approach:

“No couriers, no international bank transactions, solid contract and payment environment, disguise and ‘plausible deniability’, reduced costs.”

The presentation further details how bitcoin could be used to pay foreign sources without generating evidence that could be used to identify the source of the transaction.

The Tages Anzeiger indicates that the FIS has confirmed that the investigation into cryptocurrency payments was authorised by the agency.

Pros and cons of anonymity

While bitcoin’s ability to keep its users anonymous has been praised as a means for individuals or organisations to maintain privacy against government snooping, use of the digital currency for illicit transactions has given the cryptocurrency a negative connotation in the wider media and public eye.

In addition to illicit dark web drug bazaars like Silk Road, more nefarious uses of bitcoin behind the Tor barrier have been documented in the past, including the case of a crime syndicate willing to accept bitcoin payments for murders for hire.

However, the FIS scheme and other developments like bitcoin magnate Roger Ver’s bitcoin bounty platform prove that bitcoin’s relative anonymity could benefit governments and law enforcement too.

Additionally, cryptocurrency has been touted as a means to reward anonymous whistle blowers on government or corporate corruption, or to channel funds to dissidents and political activists across international borders.

Ver’s BitcoinBountyHunter.com allows people to place anonymous bounties on criminals, which can be collected by individuals providing information leading to the arrest and successful prosecution of the suspects.

The bitcoin bounty concept was pioneered following an attempted hack earlier this year, following which Ver offered a 37 BTC reward for the arrest of the attacker.

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