The foundation of the Double Cross System was laid in the chaotic summer of 1940, as German forces swept across Western Europe and Britain braced for an expected invasion. The capture of the first German spies on British soil revealed both the amateurish nature of German intelligence operations and the extraordinary opportunity that their incompetence presented to British counterintelligence. Arthur Owens, a Welsh businessman code-named Snow, had been operating as a German agent since 1936, but his capture and subsequent cooperation with MI5 demonstrated that German spies could be turned and used as channels for deception rather than simply imprisoned or executed.
The mastermind behind the Double Cross System was John Cecil Masterman, an Oxford don turned intelligence officer whose academic background in medieval history proved surprisingly relevant to the complex game of deception and misdirection that would unfold over the next five years. Masterman understood that successful deception required not merely the transmission of false information but the creation of believable narratives that would seem credible to German intelligence analysts. The system he helped design would need to maintain the illusion that German spy networks in Britain were functioning effectively while actually feeding the enemy a carefully controlled diet of truth and lies.