Silent Circle raises $30M, moves to Switzerland

German tax officials purchased stolen account information[0] in order to pursue tax cheats. If you think that's acceptable within the rule of law, then what's wrong with gag orders and mass surveillance?

[0]http://www.lexology.com/library/detail.aspx?g=cc1eef78-5928-...

I'm not sure we have such a clean historical record in that area. There was a huge scandal in the 80s about massive surveillance of people on the left of the political spectrum : http://en.wikipedia.org/wiki/Secret_files_scandal

Antr, you gesture to "substantiated, well supported, warrants/subpoenas/etc" but fail to ask the more relevant question. Private banking enterprises within Switzerland have provided tax haven services for U.S. and European capital for many years, beginning in the post-WWI period when tax competition was minimal. The 1920s and 1930s were halcyon days for global capital fleeing the warring nations. Switzerland had a lightweight and liberal government, and banks had an appetite for alien capital when few others did.

Quoting Farquet 2012:

In a subordinate position before the war, notably with regard to the competition of France and Germany, Swiss bankers took advantage of the new international context to affirm themselves as figures of substance in the financial world at the beginning of the 1920s. Although, for example, the cumulative balance sheets of the major Swiss banks represented only 26% of those of their French counterparts in 1913, they subsequently amounted to 73% in 1929.

The Swiss financial centre was particularly renowned in the sector of cross-border wealth management. In fact, foreign capital flowed en masse towards the Swiss haven in the interwar years. According to a [League of Nations] report, owing to the importance of foreign assets, in 1929, Switzerland possessed by far the highest per capita total of bank deposits in the world. The lack of a reliable balance of payments, as much as the absence of the legal obligation for Swiss banks to publish details regarding their accounts, nevertheless prevent an exact estimate of the total amount of imported capital. Banking balance sheets indicate a general trend, but are inadequate sources.

A committee of experts working on Swiss history during World War II who, exceptionally, had access to the in-house archives of the banks, showed that holdings of securities, generally in off-balance-sheet bank custody accounts, represented, in the two biggest Swiss banks in 1931, more than three times their balance-sheet.

[http://www.ehes.org/EHES_No27.pdf]

End quotation.

Needless to say, the confiscatory tax rates in the U.S. during the late 50s and 60s made going after Swiss accounts attractive. But the Swiss were having none of it.

So are the two situations you mention genuinely at opposite spectrums? Or is Switzerland's special brand the product of a persistently muscular political consensus that, after more than fifty years, may now be flagging? And if the latter is the case, then the OP asks a fair question.

When implementing technology intended to provide user privacy, both fall under "attack on user privacy", and should be treated as such. Either the service has access to user data, in which case it can be arbitrarily compromised for reasons of varying "legitimacy", or the service does not have access to user data, in which case the legitimacy of the request is irrelevant.

Who do you differentiate "substantiated, well supported" warrants from those that are not?

Do you accept all warrants from the US? All warrants from Russia? All warrants from Syria or Iran?

Parallel construction

>Your knowledge is outdated.

In what way? I'm aware of the Credit Suisse conviction from this week. That case just reinforces my point that Swiss banks are unable to keep their customers' accounts safe from foreign tax officials.

I think the point is that silent circle is secured by policy, not by technology. The validity of their security assertions only extend as far as you trust their word.

The problem is that the GP conflates software with services. Everything he mentioned is software/software companies, Silent Circle is a services company.

Besides, as you mention, the apps are open-source anyway.

Pirate bay is not Bittorrent. Bittorrent, Tor and Bitcoin are all services. But they are not centralized in hands of one person who needs to live in CH. They are distributed among thousands of small nodes which makes the entire service truly reliable. Also: each user stores the keys to his destiny vs. giving them to a single trusted party.

Your clients have the right idea, by using only encrypted email to discuss sensitive information. Anything less would be a step backwards.