One of the most important areas of national security may be going largely unnoticed. The Russian indictments filed by Robert Mueller indicate that Russian intelligence officers subverted financial detection by using Bitcoin to rent servers, and buy domain names, and virtual private networks (VPNs) to carry out the cyber-attacks that influenced the 2016 U.S. presidential election.
While the intelligence community digs deeper one thing has become very clear. If the United States plans to stop Russia from meddling in future elections the government’s law enforcement agencies are going to need to be much better educated on how cryptocurrencies work and how to track their illicit use.
Bitcoin and other cryptocurrencies aren’t innately wrong, but in recent years blockchain technology has soared in popularity for its decentralized and anonymous design. Those same features make the services appealing to criminals. While there are means to track some use of cryptocurrencies the U.S. government is trailing behind the rest of the world.
The hackers laundered $95,000 through their operation in the form of bitcoins to hide connections to the Russian government. They used this money to rent computer servers which allowed them to build an online apparatus to steal and publish documents from DNC hardware.
Cryptocurrency investigators researched the hackers’ activity on the Bitcoin blockchain. An email was discovered as the primary point of contact for the hackers’ transaction requests. Whoever controlled that email account served as the crypto fund treasurer.
The indictment states that hackers mined bitcoin, a process by which new bitcoins are created by adding transaction records to Bitcoin’s public ledger. They also used various cryptocurrency exchanges to buy the digital currency. This is how Russia’s military intelligence found a way to leverage cryptocurrency as a new tool in a traditional war of deception.
As we move forward trying to prevent a repeat of the Russian DNC hack using Crypto, it’s vital that law enforcement agencies not overlook opportunities for changing tactics. Future hackers may skip Bitcoin for a cryptocurrency like Monero, which is considered to be untraceable. Some blockchain developers are working hard to build decentralized trading platforms that allow users to buy tokens without providing identification. It’s not enough for the government to learn from the past hacks, they need to stay ahead of developments and commit to being at the forefront of this new technology. The subject matter expert can be found at MarkDubowitz.org.
U.S. Regulatory agencies should make a concerted effort to manage cryptocurrency exchanges, including smaller transfers that offer decentralized trading. Startups in the crypto space need to be held accountable to anti-money laundering guidelines. The U.S. could also stay one-step ahead by developing a national digital currency and blockchain technology that conforms to transparency requirements necessary for traditional financial institutions.
All government law enforcement or financial agencies should create leadership positions to employ experts in blockchain technology. Very few government agencies have staff dedicated to this specialty, and it’s in our long-term interest to recruit and train employees who can analyze and monitor cryptocurrency transactions. This will take time as the first generation of American crypto experts may currently still be in high school. Learn more here.
It’s undeniable that Cryptocurrencies can enhance counterintelligence work. Once an adversary is linked to a transaction on the block-chain, it offers the potential to track and measure their operation. This can be to America’s benefit, but only if the U.S. gets better at handling cryptocurrencies than the enemy. You can follow experts on this topic here.