A Quarter for Your Thoughts?

Earlier this year the US defense department warned of a new threat - Canadian spy coins.  Investigators have now uncovered the shocking truth.  Here's the gist of the story from January:

In a U.S. government warning high on the creepiness scale, the Defense Department cautioned its American contractors over what it described as a new espionage threat: Canadian coins with tiny radio frequency transmitters hidden inside.

The government said the mysterious coins were found planted on U.S. contractors with classified security clearances on at least three separate occasions between October 2005 and January 2006 as the contractors traveled through Canada.

...The government insists the incidents happened, and the risk was genuine.

"What's in the report is true,'' said Martha Deutscher, a spokeswoman for the security service. "This is indeed a sanitized version, which leaves a lot of questions.''

The shocking truth?  The Royal Canadian mint issue 30 million "poppy quarters" in 2004 to commemorate Canada's war dead.   When contractors found the coins in their coat pockets and in the cup holder of a rental car they issued reports that they were being spied upon with new nanotechnology. 

The worried contractors described the coins as "anomalous" and "filled with something man-made that looked like nanotechnology," according to once-classified U.S. government reports and e-mails obtained by the AP....

The supposed nanotechnology actually was a conventional protective coating the Royal Canadian Mint applied to prevent the poppy's red color from rubbing off.

Thanks to Monique van Hoek for the pointer.