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Does The Russian Indictment Exonerate Bitcoin?

Written by:
Guest
Published on:
Jul/16/2018

On Friday, Deputy Attorney General Rod Rosenstein conducted a news conference at the Department of Justice announcing the indictment of twelve Russian nationals who are alleged to have interfered in the 2016 election on July 13, 2018.

As part of that press conference, Rosenstein made mention that bitcoin was used to facilitate the alleged criminal behavior.

On the surface, this looked like yet another hit for the cryptocurrency, that has struggled to rise above the $7000 mark in recent weeks.

Dante Disparte of forbes.com claims just the opposite.  Bitcoin's reputation as providing an easy means of conducting financial crimes may have just been erased, at least to some degree, by this latest indictment.

While the bitcoin blockchain does provide “identity shelter” in the form of pseudonymous addresses, it is nevertheless a highly traceable transaction registry, much more so than the U.S. dollar for example, which only triggers red flags at large transaction thresholds.  These anti-money laundering (AML) and know your customer (KYC) rules in traditional banking also rely on often spotty compliance from a vast global banking network (one that is often culpable), wherein transactional information is stored in a one-sided manner and may be typically accessed through subpoena.  The bitcoin blockchain by contrast is a public ledger and the movements of capital and their destinations, albeit in hashed digital addresses or wallets, are highly traceable, widely known and at a much lower transaction value.  In effect, these properties enables law enforcement officials to quickly ring-fence a suspect transaction, set up trip wires and follow a veritable digital crumb trail if bitcoins are liquidated. This much held true in the WannaCry ransomware attack, where despite the vast ransom drag net, the cyber criminals only absconded with $65,000 worth of bitcoin.

While crypto crime fighting clearly taps a new set of forensic and technological approaches, such as Bitfury’s Crystal, the indictment, like the limited haul of the vast WannaCry ransomware attack, which spread to over 150 countries over a weekend affecting thousands of organizations, shows that bitcoin may not be the best economic instrument for criminals.

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