Controversial Group Behind Coronavirus Tracking App Has Crypto Ties

The coronavirus crisis may highlight the overlap between the surveillance state and the cryptocurrency industry. 

The Israeli tech company NSO Group, best known for selling spyware to Saudi Arabia and other governments, is reportedly working on a new product to monitor the spread of coronavirus. Nearly a dozen countries are testing the software, Bloomberg reported.

NSO Group’s surveillance technology has attracted widespread criticism from privacy-minded technologists in the crypto sector and beyond – for covertly accessing phones, activating cameras and collecting location data. Still, the company’s top ranks have significant ties to the blockchain industry, CoinDesk has learned.

Several NSO Group founders and investors are also funding blockchain companies. For example, co-founders Omri Lavie and Shalev Hulio have invested in the bitcoin startup Simplex, while NSO Group investor Eddy Shalev has invested in the non-custodial wallet startup Portis, the exchange platform eToro and the privacy startup QEDIT. According to Eddy Shalev’s LinkedIn account, he’s still on the board of the bitcoin mining company Spondoolies Tech.

“There’s a lot of what the cryptocurrency space is doing that is recreating what is already happening with traditional finance,” QEDIT CEO Jonathan Rouach said of Eddy Shalev. “He was one of the first people to recognize that banks will be interested in the same [blockchain] technology, but maybe not public consensus [mechanisms].”

The three investors did not respond to requests for comment by press time. Another source with knowledge of QEDIT’s operations said the startup is not involved with the NSO Group’s coronavirus monitoring app. 

Although it’s unclear how these investors personally interact with the bitcoin market, a former NSO Group employee allegedly tried to sell stolen software for $50 million worth of cryptocurrency in 2018. A source familiar with the matter said the above-mentioned investors are active bitcoiners, but declined to provide more details.

Many bitcoiners imagine the crux of their movement lies in the divide between government agencies and cypherpunks. As a company making software tools for intelligence agencies, NSO Group shows there may be a significant overlap between the two worlds. 

NSO Group isn’t the first case of such overlap, either. Coinbase famously sparked industry-wide backlash in 2019 when it acquired Neutrino, founded by three former members of a controversial Italian surveillance vendor called Hacking Team.

To quell the kerfuffle, the San Francisco-based crypto exchange said those members would “transition out of Coinbase,” but has not since confirmed such a transition took place. Coinbase did not respond to requests for comment about whether it still employs former Hacking Team members.