UK's iCloud Backdoor Demand Forces Apple to Weaken Data Protection

The United Kingdom has renewed its demand for Apple Inc. to create a backdoor into its encrypted iCloud backup services, raising significant concerns among cybersecurity experts and the cryptocurrency community. The latest order, issued in September 2025, restricts access to data of UK citizens, a narrower scope than the previous January 2025 Technical Capability Notice (TCN) that sought global access to encrypted user data. This move has reignited debates over the balance between national security and digital privacy, particularly as many cryptocurrency wallets store encrypted private key backups in iCloud, potentially exposing users to vulnerabilities.

Apple responded by withdrawing its Advanced Data Protection (ADP) feature from the UK in February 2025, a measure that disables end-to-end encryption for iCloud backups. The company stated it would "never build a backdoor or master key" into its products and emphasized that ADP's absence left UK users with weaker data security. The UK Home Office, bound by legal restrictions to avoid commenting on operational matters, reiterated its commitment to safeguarding citizens. Critics, including the Electronic Frontier Foundation (EFF), argue that the TCN undermines global cybersecurity, as backdoors inherently increase risks of hacking, identity theft, and fraud.

The implications for cryptocurrency security are particularly acute. Wallets such as Coinbase Wallet, MetaMask, and others store encrypted private key backups in iCloud. While these backups remain encrypted, they are susceptible to brute-force attacks if accessed. Privacy advocates warn that the UK's actions could erode trust in encrypted services, which are critical for protecting sensitive financial data. Ethereum co-founder Vitalik Buterin and other crypto leaders have previously criticized similar demands, noting that backdoors inevitably compromise security for all users.

The US government intervened to mediate the dispute, with the US Director of National Intelligence, Tulsi Gabbard, confirming in August 2025 that the UK had agreed to drop its backdoor request. This reversal followed warnings from US officials that the demand could set a dangerous precedent, enabling other nations to seek similar access. Gabbard emphasized that the decision protected American civil liberties and prevented vulnerabilities that could be exploited globally. Despite this agreement, the Investigatory Powers Act (IPA) still authorizes such TCNs, prompting calls for legislative reform to prevent future overreach.

Apple has yet to reintroduce ADP in the UK, leaving users without the highest level of cloud encryption. Cybersecurity experts caution that the absence of ADP increases the risk of data breaches, given that nearly 50% of UK residents use Apple devices. The company expressed hope that ADP would return in the UK, but no timeline has been provided. Meanwhile, the broader debate over encryption and state surveillance continues, with privacy advocates stressing that weakening encryption for law enforcement inevitably weakens it for everyone.

The episode highlights the growing tension between governments and tech companies over digital privacy. While the UK's withdrawal of the TCN marks a temporary victory for privacy advocates, the underlying legal framework remains unchanged. As the cryptocurrency ecosystem becomes increasingly reliant on encrypted storage solutions, the risk of regulatory pressures undermining security remains a critical concern for both users and developers.