A well-known blockchain analyst sheds light on the role of cryptocurrencies in election manipulation and disinformation – especially from Russia. An important topic we need to discuss.

2024 is a good time for a report on election manipulation, as recently released by the blockchain analyst Chainalysis. After all, we have the „ultimate election year“: 64 countries worldwide are holding elections. While elections in France, the UK, India, and the EU have already occurred, the most significant one, in the USA, is yet to come.

Foreign powers attempting to influence elections is not a new topic. It occurs from East to West and West to East, it happened before the internet, but it has escalated through social media.

It is well-known that Russia interfered in the 2016 US election, and attempts at manipulation were also noted for 2020. Since the war in Ukraine broke out, the previously cold information war has become hot, and Kremlin troll factories flood Western media with fake news, disinformation, and propaganda.

Just in July, the FBI uncovered a social media bot farm that used nearly 1,000 accounts on Twitter (today X) to spread pro-Russian fake news. In January, the German Foreign Office uncovered a campaign with 50,000 fake Twitter profiles, and in February, France uncovered nearly 200 websites spreading pro-Russian disinformation. And so on and so forth.

The problem is now pandemic. It affects not only the USA but also Europe, Latin America, and Africa, and it not only comes from Russia, Iran, and China but has long become part of the continuous election campaign in the West. The hybrid world war over minds is in full swing.

It is not „only“ about democracy. It is about truth. Disinformation not only spreads lies – but it also drowns the truth. It not only leads people to believe something untrue – it undermines the belief in truth itself, deconstructs the ability to perceive truth, and threatens to plunge the world back into pre-Enlightenment darkness.

Cryptocurrencies do not play a central role but do appear occasionally as helpful tools.

Donations and Fees in Cryptocurrencies

Firstly, many disinformation portals are financed through cryptocurrencies, either through donations or fees.

For example, Chainalysis mentions SouthFront, a news portal aimed at military enthusiasts and conspiracy theorists. It combines relatively solid information about military technology and conflicts with conspiracy theories and Russian narratives, while making efforts to obscure its ties to the Kremlin.

SouthFront also participated in the so-called „Doppelgänger“ campaigns via social media, where government and media websites were copied to make fake news look credible. SouthFront shared these posts with numerous accounts on social media.

For funding, the website collects donations in cryptocurrencies. Since July 2018, around $27,000 has been collected, mainly in Bitcoin, though this is only the amount known to Chainalysis. Some of these coins were sold through the Russian exchange Garantex, providing a clear indication of Russian involvement.

Interestingly, crypto transactions reveal a connection between SouthFront and the Iranian portal „Islamic World News (ISWN).“ ISWN targets the Islamic world but also spreads Russian disinformation. The portal also accepts donations in various cryptocurrencies, with blockchain analyses showing that both inflows and outflows are connected to SouthFront.

Pro-Russian paramilitary organizations that spread information and disinformation on their Telegram channels also benefit from crypto donations. There are indications that former Wagner chief Yevgeny Prigozhin funded numerous bloggers. Here, on-chain analyses show a pattern: individual donors support not just one but many bloggers, sometimes with five-figure amounts. This seems more like a fee than a donation.

In March this year, the US Treasury Department finally placed two Russian media entrepreneurs on a sanctions list. They were accused of setting up Doppelgänger campaigns and disseminating them through thousands of Facebook accounts and pages. They received hundreds of thousands of dollars in Tether in their wallets, much of which flowed to the Garantex exchange.

Accounts, Domains, and Phone Numbers

Cryptocurrencies are often used to pay for the infrastructure of disinformation campaigns. The recently revealed bot farm used Bitcoins to buy domains from Namecheap. Other providers, like Shinji or Epik, are also paid with Bitcoin.

In the darknet, disinformation entrepreneurs can buy social media accounts. Chainalysis mentions the Bubar Store, which offers packages with thousands of accounts on Facebook, TikTok, and other sites – of course, paid for with cryptocurrencies. While the analyst cannot provide proof that accounts from this platform are used in disinformation campaigns, the suspicion is close.

Lastly, to set up new accounts, one often needs a phone number at platforms like Facebook, WhatsApp, or Telegram. Online, there are service providers offering virtual phone numbers. One of them has already taken in eight million dollars in Bitcoin. Chainalysis does not provide a direct link to Russian disinformation campaigns, only on-chain traces leading to sites like Garantex, Hydra, and other platforms of Russian crime and money laundering.

Bitcoin and cryptocurrencies are a reliable way to obtain digital services internationally, bypassing sanctions and controls. Unfortunately, this includes misuse. The same could be said about social media, websites, and domains.

The Advantages of Transparency

Overall, the connections between disinformation and cryptocurrencies should not be over-interpreted. The amounts revealed by Chainalysis are small; even if assumed to be the tip of the iceberg, they remain insignificant.

The majority of disinformation is paid for in local currencies, such as rubles and yuan, but also euros and dollars. Bitcoin and other cryptocurrencies are used when convenient but are not a mainstay of the business. Their absence would not silence disinformation. It will continue to plague all societies that do not massively censor and control their media.

Proof-of-Personhoods, or digital proofs of being an individual, might change something eventually. Worldcoin and other providers like FractalID offer them. Such proofs usually reside on-chain, so crypto can be more part of the solution than the problem.

In general, however, it will be challenging to get disinformation under control, with or without crypto. Targeted influence through years of propaganda has already drawn many people into a netherworld of conspiracy theories, making them inaccessible to truth. In the thinking of conspiracy theorists, any counter-evidence only proves them right. Truth becomes a matter of feeling, and this feeling has been intensely manipulated through propaganda for years.

Massive education on all channels would be necessary, but it probably won’t be possible to combat the mental wildfire without fire: more censorship, counter-campaigns, troll factories, infiltration of social media. Those who remain passive in the hybrid world war risk going under, as bitter as that may be. Freedom has a price and demands eternal vigilance.

The use of Bitcoin and other cryptocurrencies by disinformation actors is not a disadvantage but rather an advantage. Only the transparency of the blockchain allows for tracking payments. Without it, connections between Iranian and Russian disinformation would have remained in the dark, just to mention one example.

Thus, Bitcoin’s high transparency proves once again to be one of its most crucial and strongest features – and perhaps a help in the war for truth.