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Sunday, July 15, 2018

Muller investigation into Russian election meddling says operation was funded by Bitcoin... but something isn't adding up.

So, the Russian election meddling operation was both a mixture of evil genius, and unbelievable stupidity. Or so we're being told.

Touching the topic of politics is like playing with fire, i'm just a tech journalist - and that's what i'm looking at here - simply the technical aspects of this highly politicized story.

But in a time when it's painfully obvious that neutral reporting is a lost art and every outlet here in America is the mouthpiece of one of the two main political parties, I feel it's important I disclose my personal views before diving in.

I'm an independent. A real one. I couldn't decide which side I distrust more of I had to, when I've been asked which I would vote for in that 'gun to your head' hypothetical ultimatum - my answer is 'just flip a coin'. I see huge differences between what candidates from each party say - and little difference into how they actually act once they've won.

So with that said, on the topic of Russian election meddling - sure, I believe it happened.

What i'm not convinced of is it was just them. It's a game dozens of countries play - the US isn't just a victim of election meddling but among the world leaders when it comes to doing it to other nations, China and Israel come to mind as the top runners-up.

The FBI indictment filed this week against 12 Russians outlines how they used Bitcoin in the election meddling operation, stating:

"...using funds in a bitcoin address, the Conspirators purchased a VPN account, which they later used to log into the @Guccifer_2 Twitter account. 

The remaining funds from that bitcoin address were then used to lease a Malaysian server that hosted the dcleaks.com website."

Here's where things start to make no sense, the indictment outlines their motive for using Bitcoin as:

“...web of transactions structured to capitalize on the perceived anonymity of cryptocurrencies such as Bitcoin."

The problem is: Russian intelligence, and even the average teen or college student who started dabbling in Bitcoin last year knows - it's not anonymous.

Did you catch the other incredibly sloppy 'mistake' they made? They used the same Bitcoin wallet to fund multiple parts of the operation - meaning once the FBI found that 1 wallet address, they had a record of everything right in front of them.  It's like the evidence was handed over to investigators on a silver platter.

Bitcoin's main feature is the "public ledger" - a record of transactions out in the open for the entire world to see.  In other words, Bitcoin's main feature is what would scare any intelligence agency away from using it in a serious covert operation.

In 2017 the MIT Technology Review published an article titled "Criminals Thought Bitcoin Was the Perfect Hiding Place, but They Thought Wrong" which explains how Bitcoin is actually being used against those who it to commit crimes:

"But while Bitcoin users can withhold their identities, they can’t avoid revealing other information that can be useful to investigators. Every Bitcoin transaction is recorded on its blockchain, a publicly accessible record of all transactions made using the currency. Blockchains “provide a really useful source of truth,” says Jonathan Levin, cofounder of Chainalysis, which develops software tools for analyzing blockchain data. Its products can help investigators draw inferences about how people are using the currency."

Here in America, the press has hyped up Russian intelligence operations as "extremely sophisticated" but that narrative falls apart immediately upon hearing they used Bitcoin.

Could it be... they're actually largely technically incompetent? That feels hard to say too, given what we know.

So, somehow they managed to pull off things like"DNCLeaks" and "Guccifer 2.0" and even supplied Wikileaks with stolen documents - all things that would take an extremely tech savvy operation to do. But then while doing all that, these same people were also unaware all their financial transactions using Bitcoin were exposed for the entire world to see?

You read about parts of it and think to yourself "wow, this really took some genius to pull off" then a minute later read something else, like them using Bitcoin, that then has you saying "how could they be so stupid?"

It feels strange to close an article without a conclusion - but the point of this piece is to highlight how I just cannot come to one. I'm not an expert in any of this - except the use of Bitcoin, and I cannot fathom a reason a covert operation would use it.

You might ask "well what would be a more secretive way the Russians could have made these purchases?" frankly - practically anything. The first thing that comes to mind would be a prepaid visa/mastercard debit card, purchased with cash - they're available everywhere from grocery stores to Walmart's.

This story is possibly the oddest confusing combination of masterful digital espionage, and complete technical illiteracy I've ever seen.
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Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk