US Court: Russia Financed Cyberattacks with Bitcoin

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According to a U.S. Justice Department indictment, seven Russian agents were financing cyberattacks with bitcoin. They were allegedly having secret operations across Europe and the United States.

The indictment, made public on October 5, alleges that from 2014 to 2018, several organizations, companies, and individuals were hacked. The purpose of the cyberattacks was to support strategic Russian interests. Finally, the US Justice Department indicated that these agents were financing cyberattacks with bitcoin.

These officers are allegedly members of the Russian foreign military intelligence agency (GU), commonly known as GRU. They were allegedly attempting to hack into the independent agency that was testing the chemical agent connected to the poisoning of a former GRU officer in the UK. Furthermore, US authorities are accusing them of trying to spy Westinghouse Electric Co., which has been supplying Ukraine with nuclear fuel.

It’s interesting that GRU agents were not limiting their operations to political opponents. It appears that officers were also acting in operations connected to doping scandals of Russian athletes.

How Were the Russians Financing Cyberattacks with Bitcoin?

According to the indictment, bitcoin was the main source of financing secret operations. This cryptocurrency was used to make it harder to trace transactions, as well as a source of financing. Bitcoin was used for purchasing servers, equipment, registration of domains and other things needed for hacking operations.

According to special counsel Robert Mueller, Russian agents funded cyberattacks with bitcoin during the US presidential elections. However, the Justice Department says that this is a different case that didn’t come from Mueller’s work. This news comes at a time when Russian GRU agents have exposed themselves.

GRU Agents Exposed in Security Scandal

Apparently, some of them exposed their personal information on the database. It seems that those intelligence officers had registered their cars to GRU cyber unit center address. By doing that, agents were trying to gain immunity from traffic stops and other violations, according to Alexander Gabuev of the Carnegie Moscow Center.

As it happens, there are 305 individuals who have their cars registered using the same address. It is interesting that the database contains their complete info. This way, the investigation uncovered their full names, DOB, ID data, cell phone numbers. That allowed for an easy identification of the agents, which is not a very common problem. He says the “root cause” for the data leak was “a combination of a wrecked values system,” “notorious incompetence” and “banal corruption.”

However, security analyst Mark Galeotti of the Institute of International Relations in Prague thinks differently. He maintains that no one should dismiss GRU as incompetent. Writing in Foreign Policy magazine, he says the “emerging narrative about its supposed clumsiness, is dangerous.”

Furthermore, he adds:

GRU prides itself on having a military culture in which a mission must be accomplished, whatever the cost. The GRU’s ethos of completing the mission no matter what means that innocent lives lost or even the revelation of agents’ names are not blunders so much as irrelevancies.

This whole story is just another example of governments around the world accepting bitcoin, each in its own way. Indeed, this alleged government organized cyber attacks with bitcoin represent a new level that few will reach.

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