Neo-Nazi Use Of Cryptocurrency In The Russia-Ukraine War May Be Catalyst Prompting Government Regulation – Middle East Media Research Institute

Cryptocurrency has become increasingly mainstream in recent years, and all aspects of it are now covered daily in detail by the vast majority of media outlets. However, one group of users that has come to rely heavily on cryptocurrency technology not only as an investment opportunity but also because of narrowing options for conducting financial activity are neo-Nazi and white supremacist groups, many of which are involved in criminal activities in the U.S. and worldwide. However, their reliance on and widespread use of cryptocurrency have attracted little or no attention from authorities or the banking industry.

Recent Examples Of Neo-Nazi And White Supremacist Use Of Cryptocurrency

Highlighting how these groups and their followers have been focusing on cryptocurrency, Buffalo shooter Payton Gendron's 180-page manifesto, which he posted on a number of forums such as 4Chan and 8Chan prior to his May 14 attack, included a section titled "About Money: Fiat, Crypto, and Metal." He recommended cryptocurrency as a way to "escape fiat," stating that fiat currency "gives central banks greater control over the economy" and indicating that the central banks are controlled by the Jews. Adding that it "is quite valuable in the way that one can trade online with it easily," he went on to say that it should, however, not be held indefinitely, and should be converted to precious metals, because "Jews hate it when you convert fake money [i.e. cryptocurrency] to real money, therefore you should do it."

Following the attack, the veteran neo-Nazi U.S.-based website Daily Stormer mentioned by Gendron in his manifesto as contributing to his radicalization was removed from its server and went offline. Within days, it had returned with a Rwandan URL and continues to fundraise in Bitcoin and Monero, with a graphic at the top of the page stating "Wanted Fighting Dollars" and "Donate to the Daily Stormer."

Hardly a day goes by that the MEMRI Domestic Terrorism Threat Monitor (DTTM) research team's monitoring does not see a new neo-Nazi or white supremacist group or individual begin to use crypto. They do so for a range of purposes, as discussed later in this article.

In Austria, notable recent examples of how domestic terrorist groups, neo-Nazis, and white supremacists are using cryptocurrency include raising funds for the legal defense of Austrian neo-Nazi rapper Mr. Bond, who was sentenced to prison for 10 years for posting neo-Nazi songs online one of which was used as a soundtrack for a livestream of an antisemitic attack, in which two people were killed. His supporters are accepting 75 different cryptocurrencies to pay his legal expenses.

In the UK, the white supremacist "Patriotic Alternative" organization, a part of the growing far-right fringe in the country, is soliciting donations in cryptocurrency to fund its production and nationwide distribution of stickers and flyers promoting its "DRAMA" campaign for "Demographic Replacement Awareness." Among the cryptocurrency it accepts are Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Monero.

In the U.S., supporters of a popular U.S.-based neo-Nazi group that creates extremist videos and posts on the extremist Gab platform, have begun fundraising in Bitcoin to support the group's activity. Each video they post includes a QR code that goes directly to its Bitcoin address for donations.

In Australia, many influential neo-Nazis now in prison continue to solicit donations in cryptocurrency for their bail, lawyers' fees, and so on. As one prominent neo-Nazi recently posted on Telegram, "Thanks to everyone's generous support, we manage to get together enough funds to cover the extensive 'Hearings, Mentions, Contests, and Bail Applications.'"

Additionally, on the leading neo-Nazi forum Stormfront, which appears to be hosted in the U.S., there has been continuing discussion of and requests for investment in a cryptocurrency for whites, to "serve as a coffer to support pro-White organizations." A forum member wrote, on May 8: "The idea is to create a cryptocurrency that runs on DeFi (decentralized finance) and is sold on DEXes (decentralized exchanges). This will involve an initial offering... to raise money for the project. After that, the goal is to get the coin listed on as many DEXes as possible to increase volume. This coin would have one utility only: [to] serve as a coffer to support pro-White organizations."

Recent U.S. Government Discussion On Possibility That Russians Will Use Cryptocurrency To Evade Sanctions

The Russia-Ukraine war is highlighting the extent to which neo-Nazis and white supremacists have migrated to cryptocurrency. The use of cyber finance in the war has already gotten the attention of government leaders involved in financial regulation, and it has already been a subject of increased discussion. But knowledge of how extremists are using cryptocurrency in the war, as it develops, will very likely prove to be a catalyst for regulations for the crypto industry, which has been a topic of discussion for some time.

At a recent hearing of the House Financial Services Committee, Federal Reserve Chairman Jerome Powell said that the Russia-Ukraine war "underscored the need for Congressional action on digital finance, including cryptocurrencies." Additionally, Senate Banking Committee members pointed out the "growing concerns that Russia could use cryptocurrencies to circumvent the broad new sanctions it faces," in a March 2 letter to Treasury Secretary Janet Yellen. It should be noted that Russian energy committee head Pavel Zavalny did say in an interview that his country is willing to accept Bitcoin in exchange for oil and gas exports.

These and other recent activities culminated in President Biden's signing of a long-awaited executive order addressing the national security risks of "illicit" misuse of cryptocurrency on March 9 and emphasizing the necessity of "regulation, oversight, [and] law enforcement action." However, the order included no concrete enforcement or regulation policies. Hopes that Biden's order would suppress nefarious uses of cryptocurrency were dashed, and some saw it as likely to further delay real action.

Nevertheless, all this activity has not considered the actual role cryptocurrency is playing in the Russia-Ukraine crisis. While it has been used legitimately in the war the response to Ukrainian government requests for donations now totals over $100 million not all cryptocurrency use in the conflict is lawful. The identities of some of those using it, once known, could be a catalyst in the push for regulation.

Forthcoming MEMRI DTTM Study On Neo-Nazi And White Supremacist Use Of Cryptocurrency

A forthcoming major study by the MEMRI Domestic Terrorism Threat Monitor (DTTM) project, which has been researching neo-Nazi and white supremacist use of cryptocurrency for the past two years, includes a chapter about activity in the Russia-Ukraine war. The report, titled "The Eye of the Storm: [Domestic] Terrorists Using Cryptocurrency Part II," and the chapter, detail the platforms where they solicit, transfer, and pay in cryptocurrency, and what they use it for activism, training, planning attacks and more.

Excerpt From The DTTM Study's Chapter On Extremists' Use Of Cryptocurrency In The Russia-Ukraine War

Cryptocurrency is proving indispensable to neo-Nazis in the war for conducting their financial affairs. Earlier this month, the neo-Nazi "Intolerant Ukrainian" channel on Telegram promoted a fundraising campaign accepting "all sorts of cryptocurrencies" to support its members fighting in Ukraine.

Highlighting this type of fundraising, on its Telegram channel, the neo-Nazi accelerationist "American Futurist," which is affiliated with veteran American neo-Nazi James Mason and the violent neo-Nazi Atomwaffen Division, expressed its support for "Ukrainian National Socialist groups such as the Azov Regiment."[1] On February 25, the channel asserted that a soon-to-emerge "anti-Russian insurgency" in Ukraine would "100%" be National Socialist. On February 27, it posted its crypto wallet addresses for people to donate and a guide to donating to Azov in Bitcoin Ethereum, Monero and others.

European Neo-Nazis Are Supporting Fellow Neo-Nazis With Cryptocurrency In The War The Example of Defend Finland and Karpatska Sich

European neo-Nazi and white supremacist groups and their supporters are using cryptocurrency extensively, and are fundraising primarily via the encrypted messaging app Telegram, which is used by almost every major neo-Nazi and white supremacist group worldwide. These groups, from all over the West, are using the platform to promote fundraising campaigns by like-minded groups in both Russia and Ukraine, soliciting donations in Bitcoin, Monero, Ethereum, and others.

Since the start of the war, a Finnish neo-Nazi channel on Telegram, Defend Finland, has been sharing posts promoting the fundraising campaign of the Ukrainian ultranationalist neo-Nazi Karpatska Sich militia. Karpatska Sich, which has been actively recruiting foreign volunteers, promotes acts of mass violence in support of its neo-Nazi ideology, and maintains close ties with groups in Serbia, Hungary, Poland, and the rest of Europe. Its fundraising posts list Bitcoin, Ethereum, and Tron wallet addresses for donating.

Groups across Europe are also promoting the fundraising campaign, including in France. Karpatska Sich is just one of a number of Ukrainian neo-Nazi and paramilitary groups that are directly soliciting donations, as are their supporters; others include Centuria and Freikorps.

Additionally, on April 3, the Russian neo-Nazi Telegram channel "Dear Bozman," that is run by an infamous Belarusian-Russian neo-Nazi, incited Orthodox Russians in Kyiv, Ukraine to attack "multiracial" Russian soldiers, and provided its Bitcoin, Ethereum, and Tether addresses for donations.

MEMRI DTTM Study Documents How Entire Neo-Nazi White Supremacist Movement Uses Cryptocurrency From Old-School David Duke To New Generation Proud Boys

Cryptocurrency use by old-school neo-Nazis such as former KKK Grand Wizard David Duke as well as by new-generation tech-savvy extremists like the Proud Boys increased dramatically after the January 6, 2021 Capitol attack. At that time, major banking and financial institutions shut down these extremists' access to their services, essentially making it the only viable alternative.

Supporters of imprisoned domestic terrorists, including high-profile killers such as Charleston church shooter Dylann Roof and Pittsburgh synagogue shooter Robert Bowers, are using donations in cryptocurrency to pay for their commissary and other expenses. Cryptocurrency is also how they are now paying for their livestreams, podcasts, and websites.

For a better understanding of how these groups utilize cryptocurrency, look at a November 2021 Telegram post by The Base the U.S.-based neo-Nazi organization led by Rinaldo Nazzaro which Australia has designated a terrorist organization soliciting donations with links to its Bitcoin and Monero wallets. In the post, Nazzaro, a former U.S. intelligence contractor and now lives in Russia, wrote that these donations are used for members' travel expenses and training, purchasing "specialized equipment," and networking.

These and other activities that are being funded by cryptocurrency include planning attacks, purchasing weapons, and obtaining drones, thermal imaging equipment, bulletproof vests, and mobile phones. On the ground in real-world battle situations, the extremists are gaining experience in combat, guerilla warfare, explosives, sniper activity and, of course, how to fund them with cryptocurrency. These skills and this experience could ultimately be turned against Western governments. Ukraine could be for these extremists what Afghanistan was for the jihadi movement in the 1980s.

Neo-Nazi Use Of Cryptocurrency In The Russia-Ukraine War May Prompt Authorities To Regulate It

To date, neo-Nazis and white supremacists have had no trouble promoting and sharing their Ukraine-connected cryptocurrency fundraising campaigns. There has been no mention of intervention on the part of authorities or on the part of the crypto industry itself. Most likely, neither is fully aware of the extent of this activity.

*Steven Stalinsky is Executive Director of MEMRI (Middle East Media Research Institute) and co-author of "The Eye of the Storm [Domestic] Terrorists Using Cryptocurrency Part II: Following In Jihadis' Footsteps, Neo-Nazis Turn To Cryptocurrency." Over the past three years he has written extensively about terrorist usage of cryptocurrency and his research on this has been published and discussed in the New York Times, Washington Post, The Hill and for many other publications. He also authored a major 2019 study on jihadi use of cryptocurrency.

[1] The issue of the Azov Battalion, whose roots are undeniably neo-Nazi, has been the subject of much debate. It was incorporated into Ukraine's National Guard, and it has been reported that there are now Jewish fighters in its ranks; in April 2002 it was reported that it was using an anti-armor weapon that Israel helped develop. At the same time, neo-Nazis from around the world have gone to fight with it against Russia, promoted and expressed support for it, and solicited donations for it. From the beginning of the Russia-Ukraine war, the MEMRI DTTM has monitored this massive neo-Nazi support for Azov, including from U.S.-based leaders and groups. It should be noted that according to the Russian narrative, Russia is fighting Ukraine to "denazify" it, with a particular focus on Azov.

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Neo-Nazi Use Of Cryptocurrency In The Russia-Ukraine War May Be Catalyst Prompting Government Regulation - Middle East Media Research Institute