The U.S. Department of Justice, recently, filed new charges against 12 Russian intelligence agents who hacked into the Democratic National Committee and the 2016 Clinton presidential campaign. According to a federal indictment released on July 13, 2018, the Russian hackers used cryptocurrencies like Bitcoin to mask their identities and launder money.

CNN reported that the Russian intelligence agents went to extreme lengths to ensure Hilary Clinton’s defeat in the 2016 U.S. presidential campaign. They committed several alleged crimes from money laundering conspiracy to identity fraud.

The Russians managed to access private files by targeting more than 300 people associated with Clinton’s campaign including John Podesta, who is the Clinton campaign chairman. Once the hackers gained access, they searched for key terms to steal the most damaging and private files.

Russian Hackers Use Bitcoin to Remain Anonymous

While the hackers used platforms like Twitter, Facebook, and even WordPress, the indictment mentioned that Bitcoin had an important role when it came to hacking into government infrastructure. The indictment said:

“The use of Bitcoin allowed the conspirators to avoid direct relationships with traditional financial institutions, allowing them to evade greater scrutiny of their identities and sources of funds.”

The Wall Street Journal reported that Russian hackers managed to launder approximately $95,000 and managed to take advantage of the “perceived anonymity of cryptocurrencies such as Bitcoin.” Robert Mueller’s team noted that the Russian agents used the cryptocurrency to register for website domains, purchase computer servers and other hacking activities.

The hackers managed to acquire Bitcoin by mining, trading on cryptocurrency peer-to-peer exchanges, and through prepaid cards. While most cryptocurrency exchanges have strict anti-money-laundering controls, the Russian intelligence officers must have accessed exchanges that don’t require any personal information to trade.

According to the indictment, the hackers “enlisted the assistance of one or more third-party exchanges who facilitated layered transactions through digital currency exchange platforms providing heightened anonymity.

The agents also moved their funds around to different exchanges and wallets, which made tracking significantly harder. However, despite their best efforts to remain anonymous, the indictment said:

“On occasion, the conspirators facilitated Bitcoin payments using the same computers that they used to conduct their hacking activity,”

Cryptocurrency Investors Should Prepare for FUD

TechCrunch reported that the Russian hacking situation will cause a lot of concern and criticism from tough lawmakers. The news outlet stated:

“You can expect bluster on cable news…who will also probably issue some kind of public denouncement of cryptocurrencies and call for more stringent regulation.”

However, TechCrunch noted that any fear, uncertainty, and doubt (FUD) is misguided for many different reasons. While Bitcoin was involved in the hacking scandal, the indictment showed how limiting cryptocurrencies are when it comes to obscuring a user’s activity.

The Russian hackers used many different techniques and methods to mask their identities. However, the process of hiding one’s identity and laundering money is hard when all of the information is recorded in a public ledger that is immutable and is maintained by every node on the system.

Jason Weinstein, a partner at Steptoe and Johnson, saw Bitcoin’s affiliation in the situation on a more optimistic note. Weinstein said:

“These allegations make clear that even where hackers use fake names and multiple accounts, blockchain technology allows law enforcement to follow in a way that would never be possible with cash.”

Although FUD will inevitably occur, TechCrunch, like Weinstein, is positive that these indictments are a step forward for the cryptocurrency industry. The news outlet said:

“If anything, these indictments are evidence only that cryptocurrency is here to stay, usable by you, or me, or a rival nation-state, or our own – just like any other financial instrument.”

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