‘Apple and Google are systemic risks to crypto’; This is why

Former Coinbase chief technology officer (CTO), Balaji Srinivasan, has raised concerns regarding the potential threats posed by tech giants to the cryptocurrency sector. 

Srinivasan singled out Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOGL), alleging that the federal government could weaponize the tech giants’ iPhones and Android devices to tamper with private keys, he said in a tweet on May 19. 

“Apple and Google are systemic risks to crypto. If weaponized by the federal government, they could backdoor iPhone and Android to exfiltrate private keys,” he said. 

He drew attention to the increasing importance of cryptocurrencies in global politics. Just as Twitter and Facebook (NASDAQ: META) played crucial roles in catalyzing the Arab Spring in 2010, the former CTO argued that, by the end of the decade, the possession of sufficient Bitcoin (BTC) by financially struggling governments could become a significant political issue.

“Similarly, in 2023, even after El Salvador has adopted Bitcoin, people still think it’s implausible to say, “By the end of this decade, the most important political issue in the world may be whether bankrupt governments have sufficient Bitcoin to fund their operations,” he added. 

Possibility of coercing Apple, Google

Under such circumstances, Srinivasan speculates on the actions desperate governments might take. He suggests that instead of relying on a traditional 51% attack through mining, the federal government could attempt to coerce Apple, Google, and other tech companies into searching for private keys on their servers, devices, and browsers. 

This would enable the government to appropriate funds acquired, serving as a financial lifeline for a cash-strapped administration. Srinivasan also emphasized that this scenario is not one of cyberterrorism but rather cyberwar. 

“This isn’t cyberterrorism; it’s cyberwar. It’s not some random hacker who manages to sneak out a file. It’s when the CEO of a company gives the lawful order to hack their customers,” he added. 

Scale of attack on crypto

He further noted that the potential scale of this attack is massive, involving billions of iPhones and Android phones, Mac laptops, Chrome browsers, Google Docs, and Gmail accounts. Srinivasan suggests that China could employ a similar strategy using the country’s smartphone manufacturers.

Additionally, Srinivasan recognized the complexity of defending against such attacks. He highlighted Apple CEO Tim Cook’s past resistance to government pressure on encryption and child sexual abuse material (CSAM) scanning. 

However, he stated that the challenge intensifies if the operating system is untrustworthy. Srinivasan also noted that Linux is a potential solution, but its widespread adoption may be impractical in the necessary timeframe. He suggested exchanges on Linux as a defense but noted their custodial nature introduces additional vulnerabilities.

Besides warning about the crypto space’s threats, Srinivasan remains bullish on the industry. As reported by Finbold back in March, the venture capitalist projected that Bitcoin could hit $1 million within 90 days, triggered by the U.S. economy going into hyperinflation.