Crypto’s Role in Disinformation: Chainalysis Report Preview

According
to
a
recent
report
preview
by
Chainalysis,
malign
foreign
state
and
non-state
actors
have
increasingly
turned
to
cryptocurrencies
to
fund
disinformation
campaigns
aimed
at
sowing
chaos,
division,
and
confusion,
especially
around
democratic
elections.
The
report
highlights
various
instances
where
cryptocurrency
has
been
used
to
facilitate
these
activities,
including
the
purchase
of
infrastructure
and
the
funding
of
operations.

Crypto
and
the
Disinformation
Landscape

In
recent
years,
systemic
influence
campaigns
have
been
conducted
by
foreign
actors
to
interfere
with
democratic
institutions
and
processes.
These
activities
are
particularly
impactful
during
election
cycles,
and
with
2024
poised
to
be
the
largest
global
election
year
in
history,
the
stakes
are
higher
than
ever.

Disinformation
is
not
a
new
phenomenon,
but
the
tactics
have
evolved.
The
2019
Mueller
Report
exposed
Russian
interference
in
the
2016
U.S.
presidential
election,
revealing
that
the
technology
used
to
hack
key
political
entities
was
purchased
with
nearly
$100K
in
Bitcoin
(BTC).
Similar
campaigns
were
observed
leading
up
to
the
2020
election,
and
they
continue
to
evolve.

Recently,
the
U.S.
Department
of
Justice
disrupted
a
covert
Russian
social
media
bot
farm
that
used
AI
to
create
fictitious
profiles
promoting
disinformation.
Many
of
these
profiles
included
crypto-related
messages,
and
the
domains
used
to
set
up
the
email
accounts
were
purchased
with
Bitcoin.

OFAC
Sanctions
and
Crypto

The
U.S.
Treasury
Department’s
Office
of
Foreign
Assets
Control
(OFAC)
has
sanctioned
numerous
individuals
and
entities
involved
in
these
disinformation
campaigns,
often
including
crypto
addresses
in
their
designations.
Some
notable
sanctions
include:

• 
  September
  2020:
  Sanctions
  on
  Russian
  nationals
  supporting
  the
  Internet
  Research
  Agency
  (IRA),
  including
  several
  crypto
  addresses
  linked
  to
  the
  organization.
• 
  April
  2021:
  Sanctions
  on
  SouthFront,
  a
  disinformation
  website,
  with
  affiliated
  crypto
  addresses
  used
  for
  donations.
• 
  September
  2022:
  Sanctions
  on
  Task
  Force
  Rusich,
  a
  neo-Nazi
  paramilitary
  group
  involved
  in
  Ukraine,
  which
  solicited
  crypto
  donations
  for
  their
  activities.
• 
  March
  2024:
  Sanctions
  on
  Russian
  nationals
  Ilya
  Gambashidze
  and
  Nikolai
  Tupikin
  for
  their
  roles
  in
  foreign
  malign
  campaigns,
  including
  crypto
  addresses.

Global
Efforts
and
Challenges

Disinformation
is
a
global
challenge
requiring
international
coordination.
The
European
Commission
recently
launched
a
campaign
to
raise
awareness
about
the
risks
of
disinformation,
noting
that
68%
of
European
citizens
frequently
encounter
misleading
information.
The
sophistication
of
AI
adds
another
layer
of
complexity,
making
it
easier
to
generate
high-quality
deepfake
videos.

Disinformation
campaigns
are
not
limited
to
the
transatlantic
community.
Russian-language
influence
is
prevalent
in
Latin
America,
while
Chinese
operations
are
prominent
in
the
Asia-Pacific
region.
Understanding
the
technologies
that
enable
these
campaigns
is
crucial
for
analysts
and
policymakers
worldwide.

The
Role
of
Crypto
Transaction
Tracing

Cryptocurrency
transaction
tracing
is
a
powerful
tool
for
exposing
and
disrupting
disinformation
networks.
Unlike
fiat
currency,
crypto
transactions
are
fully
traceable
on
the
blockchain,
making
it
possible
to
connect
transactions
to
specific
groups
and
individuals.
This
transparency
helps
investigators
uncover
the
actors
behind
these
campaigns
and
their
supporters.

Bret
Schafer
from
the
Alliance
for
Securing
Democracy
emphasizes
the
importance
of
understanding
the
nexus
of
malign
finance
and
influence
to
disrupt
disinformation
campaigns.
The
organization
provides
tools
and
methodologies
to
aid
in
these
investigations.

Resources
for
Analysts
and
Policymakers

Several
organizations
offer
resources
for
understanding
and
investigating
disinformation
campaigns:

The
Chainalysis
report
underscores
the
importance
of
ongoing
monitoring
and
offers
insights
into
the
actors,
tools,
and
technologies
involved
in
disinformation
campaigns.
Public
sector
agencies
can
leverage
crypto
transaction
tracing
to
disrupt
these
networks
effectively.

For
a
comprehensive
analysis,

download
the
full
report
from
Chainalysis.

Image
source:
Shutterstock