U.S. indicts seven Russian agents; Bitcoin used to fund covert intelligence operation
More skeletons are coming out of the closet pointing to Russian involvement in the affairs of the United States. After the indictment of 12 Russian agents in July this year for affecting the 2016 elections by hacking the Democratic National Committee and the Clinton presidential campaign, another hacking incident has hit the headlines. In a newly-published indictment, the U.S. Department of Justice has framed charges against seven alleged Russian intelligence agents for using cryptocurrencies, mainly bitcoin as part of a broad “influence and disinformation” scheme.
This whole operation took place during a 4-year period from 2014 to May 2018. To hide their financial tracks, they reportedly used cryptocurrencies, though, in the indictment, bitcoin is the only one named directly.
According to the indictment, the Grand Jury has charged Aleksei Sergeyevich Morenets, Evgenii Mikhaylovich Serebriakov, Ivan Sergeyevich Yermakov, Artem Andreveyich Malyshev, Dmitriy Sergeyevich Badin, Oleg Mikhaylovich Sotnikov and Alexey Valerevich Minin for hacking into computer networks used by anti-doping and sports officials, as well as groups involved in investigating charges against Russia for the alleged use of chemical weapons in Syria.
Bitcoin used to mask identity
The document states:
“In those instances where conspirators purchased hacking infrastructure, payments were made using a complex web of transactions involving operational accounts in fictitious names and typically utilized cryptocurrencies, such as bitcoin, to further mask their identities and conduct.”
Further, while the conspirators used a variety of currencies, including U.S. dollars, bitcoin was the primary form of payment for purchases including buying servers and registering domains, according to U.S. officials.
“Although the conspirators caused transactions to be conducted in a variety of currencies, including U.S. dollars, they principally used bitcoin when purchasing servers, registering domains and otherwise making payments in furtherance of hacking activity.”
The anonymous nature of cryptocurrency transactions allowed these agents to avoid direct contacts with other financial authorities, thus giving them the level of secrecy required to carry out their operations.
“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. 107. All bitcoin transactions are added to a public ledger called the Blockchain, but the Blockchain identifies the parties to each transaction only by alpha-numeric identifiers known as bitcoin addresses,” the document states.
The conspirators used several dedicated email accounts to track basic bitcoin transaction information and to facilitate payments to vendors. One of these dedicated accounts received hundreds of bitcoin payment requests from approximately 100 different email accounts.
The document goes on to add that the conspirators funded the purchase of computing infrastructure for their hacking activity in part by “mining” bitcoin. The pool of bitcoin generated from the GRU’s mining activity was used, for example, to pay a United States-based company to register the domain wada-arna.org through a payment processing company located in the United States.
While this latest hacking scandal and security breach is not directly related to the ongoing investigation into suspected Russian interference in the 2016 U.S. presidential election, John Demers, Assistant Attorney General for the DOJ’s national security division, said during a press conference Thursday that three of the named defendants were previously charged in connection with that probe.
Image via Shutterstock
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