Bitcoin has a political problem. In its early days the cryptocurrency was hailed as a utopian tool: a way for regular Joes to avoid the oppressive glare of governments and live in freedom.
More recently, its most vocal proponents have been those who want to limit the freedom of others. Academics and tech experts have long forewarned about cryptocurrencies’ anonymity ability to help far-right and hate groups gather donations.
Their fears have been proven true. In November the Neonazi BTC Tracker, a Twitter bot that pores the web for activity to and from bitcoin wallets owned by neo-Nazis, found that “Weev” Auernheimer, an Internet troll and webmaster for the far-right website The Daily Stormer, had received over $1 million in bitcoin.
The Daily Stormer, which in the wake of white nationalist violence in the American city of Charlottesville was dropped by several major hosting firms, had $300,000 in its own bitcoin wallet, the tracker revealed. The site’s founder Andrew Anglin has called bitcoin “Nazi cryptocurrency”.
John Bambenek, a cybersecurity expert and University of Illinois lecturer, created the BTC Tracker. Prior to Charlottesville his work was focused solely on computer crime. But the rally, which resulted in the killing of 32-year-old activist Heather Heyer, shook him.
“White supremacists have been around for a while,” says Bambenek. “But usually they’re having their gatherings out in the backwoods somewhere, doing things not in public.
“(Before Charlottesville) It’s basically idiots trolling on the Internet anonymously,” he adds. “Then to meet in one place and drive cars into each other is insane. By doing some poking around I saw they were advertising Bitcoin wallets to get donations. I took a look, and saw that The Daily Stormer had some real money. From there it’s worth tracking.”
Despite assertions about total privacy, bitcoin transactions are viewable by everybody in the ecosystem on an online ledger. There are ways for sophisticated bigots to obfuscate them, Bambenek says. But there is a huge disparity between tech-savvy neo-Nazis and their followers.
Auernheimer, who lives in the Russian-backed separatist state of Transnistria, in Moldova, garnered media attention last year by hacking thousands of connected printers to produce swastika flyers. But getting his followers to donate in private has proved trickier.
“It’s just that most of his fans don’t know how to use (dark web browser) Tor,” says Bambenek. “A couple of these guys who were there at Charlottesville work at food trucks. If they had decent tech skills they’d be doing something else. On the one hand they can do all sorts of things. But on the other if they want to have smooth and easy flow of information and monetize themselves, they’ve got to get it to the lowest common denominator.”
This week the value of a single bitcoin topped $10,000, from around $960 at the beginning of the year. The CME Group has announced that it will begin listing bitcoin by the end of the year. Last month the Daily Stormer, whose web address is now a garbled alphabetti spaghetti of numbers and letters, urged its readers to buy up the currency when its value drops.
Bambenek ties bitcoin’s phenomenal growth to the proliferation of ransomware, whose creators often demand their ransoms be paid in bitcoin. “For criminals, Bitcoins fill their needs,” he says. “There is a need for that kind of thing in the criminal marketplace, because you can’t (pay web ransoms) in, say, Barclays.”
Bambenek wants to create a database of all criminal-linked cryptocurrency transactions in the near future. But he is acting alone, and it’s a sizable task – especially for somebody whose work tracking far-right groups is “more hobby than life’s work.”
In the more immediate future, Bambenek wants to alert cryptocurrency wallet companies to neo-Nazi activity on their platforms. “If somebody’s paying their rent in Bitcoin there’s not a lot I can do about it,” he says. “But to go to Coinbase or a limited number of places where you can cash out, you can go to them and say, “Do you really want neo-Nazis on your site or not? Because the entire world is watching, and your customers value discretion.””
In August a Daily Stormer supporter claimed Coinbase, one of the world’s best known wallets, had deleted his or her account for having donated. The company itself, however, has remained tight-lipped about its account policies.
Perhaps, like Twitter and other online platforms, Coinbase is treading lightly to avoid a dichotomy between its crypto-anarchist foundations and objectively repugnant hate speech, that is proliferating under the Trump administration: just yesterday the US President retweeted Islamophobic videos posted by a notorious British far-right group.
Coinbase and others of its kind are avoidable by neo-Nazis. But their shutting down hateful accounts could have a big bottleneck effect on the likes of Weev, The Daily Stormer and others.
Bambenek has received plenty of vitriol himself for having created the BTC Tracker. He doesn’t lose much sleep. It’s “standard Internet trolling,” he says. “My little sister has threatened me better than these guys have.”