U.S. Justice Department Indicts Russians Who Used Bitcoin to Interfere in 2016 Presidential Election

Omar Faridi
  • Russian nationals were charged with federal crimes involving interference with the US 2016 presidential elections.
  • 12 Russian intelligence officers were charged with using Bitcoin to buy servers used for hacking US government computers.

The US Justice Department announced on Friday an indictment charging twelve Russian citizens for attempting to use Bitcoin (BTC) to engage in money laundering activities. The accused, according to the indictment brought forward by the Special Counsel’s Office, used the cryptocurrency to hide their alleged involvement in interfering with the 2016 U.S. presidential elections.

Reportedly, the accused are members of Russia’s Main Intelligence Directorate (GRU) and have been charged with trying to hack the US Democratic Congressional Campaign Committee’s servers.

The GRU officials, who’re part of the Russian military, have also been indicted on charges of engaging “in a sustained effort to hack” the Democratic National Committee’s (DNC) private databases. All twelve defendants have been accused of trying to unlawfully gain access to confidential information related to former US Secretary of State Hillary Clinton’s presidential campaign.

Defendants “Conspire To Hack” Government Servers

It’s believed that through these data breaches, the accused Russian officers leaked classified information and labeled it as “Guccifer 2.0” and “DCLeaks.” These incidents can be traced back to July 2016 when the DNC revealed that their computer systems had been infiltrated by two different Russian entities known as “Cozy Bear” and “Fancy Bear.”

The Russian hackers then reportedly went on to share thousands of DNC’s confidential messages with Guccifer 2.0, a Romanian hacking group. Soon after this, compromised classified information was posted on WikiLeaks.

US Special Counsel Robert Mueller was quick to follow up on these incidents and now all twelve of the Russian military’s intelligence officers have been indicted by District of Columbia’s grand jury.

Charges levied against the defendants include interfering with the US state boards of election and obtaining unauthorized access to private information belonging to the secretaries of state by “conspir[ing] to hack into [their] computers.” Charges also include tampering with elections software, although it isn’t clear whether the hackers influenced the electoral voting process.

Notably, Mueller’s investigation suggests that the accused used spear-phishing attacks, which are fraudulent emails sent from compromised accounts of trusted senders with the intention of obtaining confidential information from unsuspecting recipients. “X-Agent” (or “Sofacy”), the tool allegedly used for spear-phishing, is believed to also have been used by other Russian hackers reportedly linked to the GRU.

Bitcoin Used To Buy Servers

Interestingly, in a possible attempt to prevent these crimes from being traced back to them, the Russian hackers bought bitcoin and used the pseudonymous cryptocurrency to purchase servers and other computer accessories.

 The computing hardware is believed to have been used to help them infiltrate private US government networks. In addition to being charged for influencing and interfering with the 2016 US presidential elections, the accused have been charged with using bitcoin to engage in money laundering activities.

The federal level indictment consists of 11 criminal counts with Count Ten alleging that the Russian intelligence officials. It reads

“[The] Defendants conspired to launder the equivalent of more than $95,000 through a web of transactions structured to capitalize on the perceived anonymity of cryptocurrencies such as bitcoin."

DOJ

Crypto Security and Privacy: Why VPNs Matter

With exchange hacks, crypto thefts and phishing incidents seemingly hitting headlines every week, safely buying and transacting with cryptoassets online has never been more important.

This week saw a particularly poignant lesson in the need for a robust online security strategy, as BitGo Lead Engineer Sean Coonce revealed that he lost over $100,000 from his Coinbase balance as an attacker gained control of his account using a “SIM Port” attack.

One important element in any crypto user’s online security should be a top-tier VPN.

VPNs and Privacy

In addition to a gamut of security and privacy practices crypto users should adopt, including using a hardware wallet and using 2FA authentication (non-SMS), a good VPN can’t be overlooked.

While the top cryptoasset blockchains themselves are quite secure, an individual’s interactions with the blockchain or their funds may not be. VPNs encrypt your data, acting in effect as an extra barrier against anyone who might try and access your information as you are communicating with servers online. The data packets of a crypto transaction in this way become better protected against anyone trying to intercept them as they travel between you and the target - such as an exchange.

When you are using a VPN, all your communications are routed via one of the VPN’s encrypted servers. This also affords you a far greater degree of anonymity, as anyone attempting to track websites you visit, e.g. exchanges, wallets, won’t know when or if you are visiting them.

While these technical features of VPNs make them essential for any crypto user, there are other broader concerns that will likely attract crypto enthusiasts to a quality VPN.

The Spirit of Decentralization

Another important facet of using a VPN is decentralization and the privacy of your information.

Bitcoin was created to fulfil the vision of a decentralized, nation-state resistant currency, allowing people across the globe to exchange value independently. In this vein, VPNs form an essential part of that vision, as it becomes far harder to trace your location.

Whether a VPN stores log files too, will likely form an important part of a crypto users choice of VPN. Some VPN providers, while either dancing around the issue or even claiming that they don’t store records of your internet activity, do in fact log your activity. Choosing a VPN provider that has a proven record of not logging activity, therefore, will matter to many in the crypto community.

One other interesting feature offered by some VPNs is the ability to pay for them using cryptocurrency. While many of the top VPNs don’t offer this feature, those who are particularly conscious of privacy and leaving less of a financial footprint, will factor this capability into their choice of provider.

Getting Started on Your Security Journey

Getting to grips with the potential security minefield that comes with owning and buying cryptoassets is not easy. There are a host of ways you can lose your crypto or leave yourself vulnerable to theft. Making sure you choose the right VPN therefore, should form an important part of your strategy as you seek to secure your crypto and online activity.