A Brief Introduction:
In general parlance, the word means "latent, hidden tendencies towards fascism." However, the term Cryptofascist has come to mean something very different and specific in various places on the internet.
The term has been co-opted by electronic musicians and artists in an attempt to change certain aesthetics and artistic expressions from their current state; which is one intricately linked with failed and reprehensible political programmes. This is about reclaiming the symbology and power of art and to "reclaim the maligned symbols of history and exorcise them from the bonds of denigration." (CryptoFascist Manifesto)
Cryptofascism is an experiment in salvage propaganda. The architecture and art of the Classical world and neoclassicism, the Western Tradition, the glory of history -- these we wish to preserve. It is not a hate movement. It is not a political movement, secret society or terrorist cell. The self proclaimed Cryptofascists want to be able to express the full range of human experience - the sturm und drang of romantic sublimity, the classical expressionist connection with the basics of human emotion - catharsis and ecstasy.
It has surfaced in order to bring awe and wonder back to humanity - to promote a unifying grand consciousness in humanity towards a more just and connected world. Its aims are to promote healthy international dialogue and scientific, athletic and social rivalry as a replacement for war and tribal and ethnic strife.
Long ago there was a website called Audioscrobbler. It was a music statistics aggregator and it was an amazing way to keep track of what you listened to and find new artists that were similar that you didn't know about. Of course, they had a forum and that when trouble usually starts. You see, people had been listening Neo-nazi, White Power, Hate music and such and there were people who wanted them banned. Of course, the whole point of the project was to get a very good idea of demographics and statistical relationships between musical genres. No matter the politics of the music, 'scrobbler wanted to collect info about it in order to make a massively awesome music comparison database.
So flame wars started, people got banned for getting out of line, and you could be free to listen to Burzum without breaking the site's TOS. The guys who run it are really nice people who are as far as I can tell very social libertarian and prize free speech and especially free expression on the internet. But, of course, one can not tolerate harassment and abuse against another member of the site and so some asshole skinheads got shitcanned and so did the hysterical spam brigades posting threatening messages all over people's profiles.
Then Audioscrobbler became Last.FM. Last.FM existed already but didn't have the statistical tracking like AS and the two sites just merged together. So now Last.FM has an awesome online community and exemplar audio data mining. Because of the online community side of the site, the "group" took on a much more important role, and of course hate groups sprouted up. Most of them kept to themselves but a few actively spread nasty messages about white purity racist nonsense and harassed the Communist groups. There were a couple of banhammers and big 40 page threads of flamewar.
Once it became clear that no harassment on the site's forums and group pages will be tolerated and in that Last.FM isn't going to do shit about banning people based on their music preference alone, the situation died down a bit. However, the flame wars and 'black ops' continue to go on between anti-fascist anti-nazi groups and nazi groups and such. To me it is really getting very silly from an ouside perspective, but yes there have been death threats made... about an internet website. IT IS SERIOUS BUSINESS!!
So, caught in the middle of this political war is certain demographic. Namely, people who enjoy listening to neofolk, martial industrial, black metal and music with a lot of fascist trappings. Not fascists themselves, they are harassed due to their musical interests and pressured to prove their "loyalty" to proper-and-just-society.
Thus a group for this demographic was formed, people rallied around it, and it was called Cryptofascism, or "cryptofa" for short.
Now, since Last.FM is primarily about the music, self-described Cryptofascist independent artists took it upon themselves to produce music and collaborate with other musicians and artists, the general subheading of this body of work being called simply Cryptofascist. For some reason people now tag these artists and other bands with as "cryptofa" on lastfm. This is due in part towards building a sense of solidarity, and also generating a nice streamable audiocast of things tagged cryptofa.
This is basically all the background info I can give, and its not likely 100% accurate. I've been on AS/last.fm for about 6 years now so I tend to take a longer term view on what is to me a fairly recent development (the rise of the Crypto-Fascists as a visible force on Last.FM I mean).
CryptoFa Last.FM Page: http://www.last.fm/group/Crypto-Fascists
Cryptofascism: Semiotic Machinegun: http://willtopower.hostsnake.com/