- Analysts Disproves Cryptocurrency Money Laundering Article by the WSJ
- Crypto Data Company CoinMarketCap Rolls Out Cryptocurrency Indices on Bloomberg, Reuters, NASDAQ
- Venezuela’s Maduro Regime Targets Cryptocurrency Remittances to Finance Itself
- Avnet and Bitpay Partner Up to Enable Cryptocurrency Payments
- Bitmain Claims its New Miner Z11 Is 3x More Powerful Than its Predecessor
One of the most pressing issues in American politics right now that could have historic and global consequences is the Special Counsel investigation, which is led by the former FBI director Robert Mueller (and therefore often dubbed as the Mueller Investigation). The investigation probes the Russian interference in the 2016 U.S. presidential elections, and also attempts to determine if there were illicit connections between the Trump campaign and agents of the Russian government.
Now it has been officialy revealed that cryptocurrency played an important role in the Russian efforts to influence the election.
In a new indictment, the prosecutors allege that 12 named Russian agents were using cryptocurrencies – mostly Bitcoin evidently – in an attempt to obfuscate the origin of their payment during their “hacking activity.”
From the indictment:
To further avoid detection, the Conspirators used a network of computers located across the world, including in the United States, and paid for this infrastructure using cryptocurrency.
The indictment clarifies that the Conspirators clearly wanted to refrain from dealing with “traditional financial institutions” which would have made it much easier to uncover their identities and sources. Moreover, the Conspirators tried to shake off any lead back to themselves by acquiring infrastructure with Bitcoin and using a myriad of different email accounts “to track basic bitcoin transaction information and to facilitate bitcoin payments to vendors.”
The indictment also elaborates that the Russians ventured to hide their sources of funds by… mining Bitcoin! Yes, Russian operatives were mining Bitcoin so they could have cryptocurrency with no links whatsoever back to the Russian government.
The Conspirators funded the purchase of computer infrastructure for their hacking activity in part by “mining” bitcoin. Individuals and entities can mine bitcoin by allowing their computing power to be used to verify and record payments on the bitcoin public ledger, a service for which they are rewarded with freshly-minted bitcoin.
But of course, as any well-versed Bitcoin miner knows, mining Bitcoin isn’t easy nor readily enriching, and so they had to resort to other means of obtaining Bitcoin. Apparently, the Russian Conspirators used the services of crypto-exchanges, converted all sorts of digital currencies and even utilized pre-paid cards; all in a covert endeavor to manipulate the election without being detected.
So, if the Russian Conspirators had obviously known about the unique qualities of cryptocurrencies and did attempt to hide themselves, how were they caught? One big clue for this question may be found in clause 61 of the indictment:
On occasion, the Conspirators facilitated bitcoin payments using the same computers that they used to conduct their hacking activity, including to create and send test spearphishing emails.
They were careful, to be sure, but not careful enough.
One final crypto-tidbit from the indictment is the Conspiracy to Launder Money count. the prosecutors assert that the Russians “conspired to launder the equivalent of more than $95,000” through “the perceived anonymity of cryptocurrencies such as bitcoin.” It is highly doubtful that the Russian government deliberately attempted to launder money in the ridiculous amount of $95,000, but that it was merely just a side-effect of the operation since the agents certainly couldn’t disclose their accounts. Yet it does show that if you mess with the federal authorities of the U.S., they’re not going to let you get away with anything.