After Deputy Attorney General Rod Rosenstein released an indictment of 12 Russian intelligence officers yesterday, it didn’t take long for Democratic members of Congress to point fingers at bitcoin for supposedly helping enable the “nefarious actors” to secretly pay for servers and other services in furtherance of their scheme to fool the American public.
And as the bitcoin backlash intensified, Congressional Black Caucus Chairman Emanuel Cleaver tweeted that he’s been “warning of the potential dangers of bitcoin” and that “the crypto industry needs to step their game up.”
I’ve been warning of the potential dangers of @Bitcoin being used by nefarious actors. Now, we know Russia used #cryptocurrency to fund their meddling campaign in 2016. The #crypto industry needs to step their game up. @blockchain @BTCFoundation @DigitalChamber https://t.co/BTa8rsbtln
— Rep. Emanuel Cleaver (@repcleaver) July 13, 2018
Cleaver was referring to sections from the indictment that described how the hackers used cryptocurrency to pay for fake accounts and servers in furtherance of their scheme.
A surprising amount of space in the legal document was dedicated to recounting how the subjects of the indictment made their bitcoin payments and even mined bitcoin to help finance the operation.
But Cleaver’s claims quickly elicited a flood of tweets from people in the community who were quick to point out that the trail of transactions embedded in the blockchain actually helped investigators pinpoint the people responsible. As one user put it, “Bitcoin is a bad choice for criminals, whether you’re a Russian hacker or domestic drug dealer.”
Russian hacker indictment shows that criminals using bitcoin may as well write their own arrest warrant. Fake names? Multiple accounts? Law enf. STILL caught them. Bitcoin is a bad choice for criminals, whether you’re a Russian hacker or domestic drug dealer. #BlockchainAlliance
— Jason Weinstein
(@jasonweinstein6) July 14, 2018
It may be impossible for governments to interfere with transactions conducted in bitcoin – meaning they can’t stop an illegal activity during the act – but bitcoin “made it easy to track” the suspects after-the-fact.
Bitcoin made it easy to track after-the-fact, but impossible to stop during the act. If you don’t care about ever setting foot in the U.S. again (a view a GRU officer is likely to have) it’s an ideal solution. https://t.co/jYmunek0rN
— Preston Byrne (@prestonjbyrne) July 14, 2018
One twitter user pointed out the irony in Rep. Cleaver’s complaints…
Corrupt politician expresses concern over hackers who exposed vast political corruption within his own party. They rigged their own primary election and somehow it’s Bitcoin’s fault. Mr Cleaver and his associates are a bunch of corrupt idiots. https://t.co/Wjsmwj6Lxa
— BashCo (@BashCo_) July 13, 2018
and suggested another frame for the narrative.
How Bitcoin was used to expose systemic political corruption throughout the DNC
— BashCo (@BashCo_) July 13, 2018
Of course, some bitcoin critics reveled in the fact that the indictment appeared to mark a new low for the cryptocurrency.
2014, Mt Gox meltdown: Wow, bitcoin really jumped the shark this year!
2015, Silk Road trial: Wow, bitcoin really jumped the shark this year!
2016, Bitfinex hack: Wow, hmm yes
2017, ICO bubble: OK we’ve reached rock bottom yes?
2018, bitcoin implicated in Mueller probe— hashtag everything sucks (@sarahjeong) July 13, 2018
But, in summary:
I guess that cryptocurrency wasn’t “crypto” enough to hide from Bob Mueller.
— Sperry Garcia (@BostonJerry) July 13, 2018
In terms of tracking the indicted parties, it doesn’t appear that bitcoin was any more difficult to trace than simple wire transfers would’ve been. But that probably won’t stop lawmakers like Cleaver calling for it to be banned or for regulators to crack down more heavily than they already have.
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