With Bitcoin booming, dark web criminals are getting richer – we investigate what this means and how to stop it with the expert behind @NeoNaziWallets
It’s been a good year for bigots and it might have just got even better. News of the Bitcoin boom has taken many people by surprise, some lucky enough to have inadvertently given themselves a nice Christmas bonus from residual (and virtual) coins, a lot of it purchased back in the days when they bought drugs off the dark web. Right now one Bitcoin is worth about $17,000 (£13,000), despite the fact it started the year at $1,000. A few years ago it would only set you back $2-30.
Now we have a generation who are sad they snorted a house deposit, and people like James Howells, an IT worker from Wales, who accidentally dumped over £60 million worth of Bitcoin in a landfill. But Nazis who have had a very public love affair with the cryptocurrency and are typically banned from crowdfunding through legitimate avenues are cashing in on the Bitcoin wave.
Dubbed the “currency of the alt-right” by Richard Spencer, a large part of the cryptocurrency’s appeal is that it allows a greater deal of anonymity than currencies regulated by governments and banks. It has an allure to people who are reluctant to reveal their identity because they’re up to no good. For example, WannaCry crooks crippled the NHS system in the biggest ransomware attack in history forcing hospitals and doctors’ surgeries to turn away patients and cancel appointments. In return, they wanted $300 (£233) for each affected machine.
More recently, Christopher Cantwell crowdfunded his way out of jail for his violent role in the harrowing Charlottesville “Unite the Right” rally which left one counter-protestor dead, and 40 people injured. Cantwell, who was billed as a speaker at the event, was charged with illegal use of tear gas and his bail was set at $25,000. Yet despite being banned from pages like GoFundMe, the alt-right managed to transfer money via Hatreon, GoyFundMe, and of course Bitcoin, in order to set him free.
However, to accept donations you have to tell people where to send them. John Bambenek trawls places like Counter Currents who have had to publicise their Bitcoin addresses to track what goes in and out of neo-Nazi affiliated accounts. Bambenek owns a cybersecurity investigations firm which found that “Weev” Auernheimer, an Internet troll and webmaster for the far-right website The Daily Stormer, had received over $1 million in Bitcoin. While Richard Spencer has about $2,000 in his wallet. We ask the expert what all of this means and what we can do about the growing Nazi economy – if anything.
Bitcoin is the currency of the alt right.— Richard 🎅🏻 Spencer (@RichardBSpencer) March 18, 2017
Richard Spencer wallet report. Rec: 0.1234 BTC ~$2,125.28 USD, Spent: NaN BTC ~$NaN, Bal: 0.1234 BTC ~$2,125.28.— Neonazi BTC Tracker (@NeonaziWallets) December 12, 2017
Why have you targeted neo-Nazis?
John Bambenek: A couple were on my radar for more conventional computer crime. I started casually looking after Charlottesville and noticed a few had real Bitcoin wealth. Seeing that really sparked my interest as an intelligence analyst into what was going on behind the scenes.
Bitcoin is talked of as a currency that allows traders to remain anonymous, how do you have information about individuals like Richard Spencer and other neo-Nazi affiliates?
John Bambenek: In order for individuals to accept donations, they inherently have to tell people where to send the donation. That makes it easy to know which wallets are theirs and since Bitcoin transactions are public, it is easy to money move in and out.
“Their big problem is that PayPal and banks will not open accounts for them. Bitcoin offers them the ability to do things online with low effort” – John Bambanek, Bitcoin expert
What draws them to crowdfund via Bitcoin, and do you know how they spend this money?
John Bambenek: Their big problem is that PayPal, merchant accounts, and banks will not open accounts for them. That means they can either raise money by mail or use Bitcoin. Bitcoin offers them the ability to do things online with low effort. I have not seen directly what they are spending on yet.
Is there a way of stopping Bitcoin transactions among hate groups, fascists and criminals if you can monitor them?
John Bambenek: There are a smaller number of ways to turn Bitcoin into cash, blocking them there has a significant impact. But there are ways around that too and some services cater to criminals so neo-Nazis would not bother them.
Talk to me about the bitcoin boom, if it continues to rise in value are you worried about who will profit from it?
John Bambenek: I wouldn’t say I am worried. Eventually, it will come back down again and luckily neo-Nazis are a small part of the Bitcoin ecosystem.
Why is the Bitcoin experiencing such success? Is it a good thing?
John Bambenek: I believe a lot of this has to do with ransomware (where criminals encrypt your files and demand ransoms in Bitcoin). This has brought lots of people into Bitcoin as well as insurance companies. Ultimately its value could disappear tomorrow.
Do you personally own a lot of Bitcoin?
John Bambenek: No. I only use it transactionally, usually to acquire items from the criminal world for research.
Should Dazed readers invest?
John Bambenek: It’s a high risk, high reward choice. If you bought in heavy 5 years ago and sold today, you’d have done well. It all depends on your risk tolerance.