Federal government blocks Crypto AG successor

Crypto International AG, based in Steinhausen, has been hit with an export ban by the federal government. As reported by the NZZ on Monday, several export requests from the company are currently pending at the State Secretariat for Economic Affairs (SECO). This situation is creating existential problems for the company, says the report. Crypto International AG produces encryption technology and products for cybersecurity, and employs around 100 people, three-quarters of whom in Steinhausen. The company does not publish its sales figures.

The background to the Seco measure is the fact that Crypto International AG emerged from the former Crypto AG two years ago. As various media sources revealed a month ago, Crypto AG sold manipulated encryption devices to various countries for decades on behalf of the US secret service CIA and the German Federal Intelligence Service.

Crypto AG no longer exists in the meantime; it divided its national and international business into two new companies at the beginning of 2018. Both companies are still based in Steinhausen: CyOne Security AG has been taking care of Swiss customers since then, while Crypto International AG took over the global business. In the past few weeks, the two successor companies have repeatedly emphasised that they have nothing to do with the former Crypto AG.

According to the NZZ report, Economy Minister Guy Parmelin suspended the general export licenses for Crypto International AG in December until such time as the open questions about Crypto AG have been resolved. The Business Audit delegation is currently investigating the affair, and a report should be available by the end of June. There should also be a discussion between the Seco and representatives of Crypto International AG this week.

The headquarters of Crypto International AG in Steinhausen.

Crypto International AG has belonged to the Swedish entrepreneur Andreas Linde since the spin-off, and he refuses to be equated with the predecessor company and its business practices. The work of his company has been blocked by the Swiss government "because it wants to show that it is doing something".

“We have a new strategy that is completely different from what Crypto AG once did. It’s no longer about encryption devices, and hardware is less important today. We want to offer our customers comprehensive security solutions, and encryption is only a small part of this,” he said in a recent interview. At the same time, he also admitted: “I have taken over intellectual property and have also secured trademark rights. I have adopted the name Crypto and the domain name crypto.ch. I have largely taken over the sales team and also the lease for the office building. You can see that some of these things have become detrimental today. Even though we are a completely different company today, we are still working in the old offices, with the same name, with the same Internet address. And that’s a problem.”

According to the report, Linde will soon move the company into new offices and rename it. The company confirmed these plans on request, without providing details.