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Both bad things can be true. Crypto is one of the best methods available to Russia to circumvent sanctions and turn their capabilities to hard currencies. This

by btilly 3y ago

Both bad things can be true. Crypto is one of the best methods available to Russia to circumvent sanctions and turn their capabilities to hard currencies. This is true whether we're talking about acquiring money by running frauds internationally, or finding ways to be paid for cybercrimes like ransomware. Rather bigger amounts of defrauding are possible for Americans who figure out how to directly access the American financial system. That doesn't change the way that it is being used by Russia. And the Russian use case is far more relevant to this story - they are undoubtably involved in a shockingly large fraction of the crypto money launderers that were registered in Estonia.

Beijinger 3y ago
"Crypto is one of the best methods available to Russia to circumvent sanctions and turn their capabilities to hard currencies." Is it? Any evidence for this? It was my understanding that they use gold: https://www.theguardian.com/world/2018/jan/03/turkey-banker-iran-sanctions-mehmet-hakan-atilla https://www.theguardian.com/world/2018/jan/03/turkey-banker-... But I know that crypto is somewhat important for North Korea
- btilly 3y ago
  The phrase "one of the best methods" means not the only one. Yes, gold is another method that is used. But ransomware gangs are overwhelmingly Russian, and overwhelmingly use crypto as their payment channel. It is far from the first kind of cybercrime to be overwhelmingly Russian, and disrupting payment channels is a good way to shut it down. Read https://www.lawfaremedia.org/article/ransomware-problem-bitcoin-problem https://www.lawfaremedia.org/article/ransomware-problem-bitc... for more on this. From one of the key figures in shutting down the Viagra spam problem. Which was also largely created by Russia.
  - Beijinger 3y ago
    "But ransomware gangs are overwhelmingly Russian, and overwhelmingly use crypto as their payment channel" Would it not be a little bit strange for Russian ransomware to provide an IBAN or a Money Wire to a bank? And Russian ransomware actors are, in contrast to North Korean and as far as I know, not state actors. (Russian Troll factories are not ransom ware)
    - btilly 3y ago
      Russian ransomware actors are not state actors, but couldn't operate in the way that they do without the sanction of the state. This is why the phrase "Russian ransomware actors" makes sense. So, for example, they take some interesting actions to avoid accidentally making the state unhappy. https://krebsonsecurity.com/2021/05/try-this-one-weird-trick-russian-hackers-hate/ https://krebsonsecurity.com/2021/05/try-this-one-weird-trick... shows an amusing consequence of this. But they also wind up with the same kinds of relationships with the state that the Wagner group did. And so we get things like https://www.cisa.gov/news-events/cybersecurity-advisories/aa22-110a https://www.cisa.gov/news-events/cybersecurity-advisories/aa.... Russian military activity comes backed up with Russian cyberattacks that use all the same techniques, and presumably some of the same people, that Russian cybercriminals do. And these attacks were not necessarily trivial. For example https://www.reuters.com/world/europe/russia-behind-cyberattack-against-satellite-internet-modems-ukraine-eu-2022-05-10/ https://www.reuters.com/world/europe/russia-behind-cyberatta... verifies that KA-SAT was taken offline. Starlink was also under constant cyberattack. I strongly suspect that Musk's unwillingness to allow Starlink in areas under Russian control, and unwillingness to allow Starlink to be used in offensive military attacks, are exactly to reduce how much he is a direct target of Russian activity.
roenxi 3y ago
Aren't the best sanction-busting tools the Russians have things named "Rupee" and "Yuan"? Possibly even "gold". The situation isn't clear yet, but it looks like the biggest problems with sanctions is that China is an advanced manufacturer that isn't part of NATO. Everyone outside of NATO seems to be calm enough about the war.
- vkou 3y ago
  > Aren't the best sanction-busting tools the Russians have things named "Rupee" and "Yuan"? Possibly even "gold". They are. Converting crypto to hard currency outside of Russia without tripping flags is certainly possible, but has all the same problems of using hard currency while under sanctions in the first place.
- bobthepanda 3y ago
  IIRC wasn't Russia having a hard time offloading all the rupees in its possession? https://www.businessinsider.in/policy/economy/news/russia-doesnt-know-what-to-do-with-the-1-billion-in-rupees-it-is-amassing-in-india-each-month/articleshow/100676904.cms https://www.businessinsider.in/policy/economy/news/russia-do...
- btilly 3y ago
  Those are great sanction-busting tools for getting payments from organizations who actively wish to cooperate with Russia to get paid. They aren't good tools for getting paid by victims of cyberattacks.
  - roenxi 3y ago
    That isn't really sanction-busting. Committing crimes was already illegal before Russia was sanctioned. In point of fact, it is probably still illegal in Russia.
0xDEF 3y ago
A lot of the fraud and laundering happening after the Russian invasion of Ukraine is definitely something Russia is doing to earn some extra cash and hurt the West. However before 2022 it was just as much wealthy Russians doing it to put their money beyond the reach of the Russian state. https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_scandal https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_s...
- vkou 3y ago
  > A lot of the fraud and laundering happening after the Russian invasion of Ukraine is definitely something Russia is doing to earn some extra cash and hurt the West. That's like saying that US-made guns fueling cartel violence is 'America doing something to earn some extra cash, and to hurt Mexico'. It's ridiculous, and not accurate. It's just economically-rational actors trying to make money, and taking advantage of legislative and enforcement arbitrage. This kind of arbitrage exists any time two different systems interact with eachother. Foreigners, and foreign criminals are not some weird hive mind in cahoots with their state.

by btilly 3y ago

Beijinger 3y ago

"Crypto is one of the best methods available to Russia to circumvent sanctions and turn their capabilities to hard currencies." Is it? Any evidence for this? It was my understanding that they use gold: https://www.theguardian.com/world/2018/jan/03/turkey-banker-iran-sanctions-mehmet-hakan-atilla https://www.theguardian.com/world/2018/jan/03/turkey-banker-... But I know that crypto is somewhat important for North Korea

btilly 3y ago
The phrase "one of the best methods" means not the only one. Yes, gold is another method that is used. But ransomware gangs are overwhelmingly Russian, and overwhelmingly use crypto as their payment channel. It is far from the first kind of cybercrime to be overwhelmingly Russian, and disrupting payment channels is a good way to shut it down. Read https://www.lawfaremedia.org/article/ransomware-problem-bitcoin-problem https://www.lawfaremedia.org/article/ransomware-problem-bitc... for more on this. From one of the key figures in shutting down the Viagra spam problem. Which was also largely created by Russia.
- Beijinger 3y ago
  "But ransomware gangs are overwhelmingly Russian, and overwhelmingly use crypto as their payment channel" Would it not be a little bit strange for Russian ransomware to provide an IBAN or a Money Wire to a bank? And Russian ransomware actors are, in contrast to North Korean and as far as I know, not state actors. (Russian Troll factories are not ransom ware)
  - btilly 3y ago
    Russian ransomware actors are not state actors, but couldn't operate in the way that they do without the sanction of the state. This is why the phrase "Russian ransomware actors" makes sense. So, for example, they take some interesting actions to avoid accidentally making the state unhappy. https://krebsonsecurity.com/2021/05/try-this-one-weird-trick-russian-hackers-hate/ https://krebsonsecurity.com/2021/05/try-this-one-weird-trick... shows an amusing consequence of this. But they also wind up with the same kinds of relationships with the state that the Wagner group did. And so we get things like https://www.cisa.gov/news-events/cybersecurity-advisories/aa22-110a https://www.cisa.gov/news-events/cybersecurity-advisories/aa.... Russian military activity comes backed up with Russian cyberattacks that use all the same techniques, and presumably some of the same people, that Russian cybercriminals do. And these attacks were not necessarily trivial. For example https://www.reuters.com/world/europe/russia-behind-cyberattack-against-satellite-internet-modems-ukraine-eu-2022-05-10/ https://www.reuters.com/world/europe/russia-behind-cyberatta... verifies that KA-SAT was taken offline. Starlink was also under constant cyberattack. I strongly suspect that Musk's unwillingness to allow Starlink in areas under Russian control, and unwillingness to allow Starlink to be used in offensive military attacks, are exactly to reduce how much he is a direct target of Russian activity.

roenxi 3y ago

Aren't the best sanction-busting tools the Russians have things named "Rupee" and "Yuan"? Possibly even "gold". The situation isn't clear yet, but it looks like the biggest problems with sanctions is that China is an advanced manufacturer that isn't part of NATO. Everyone outside of NATO seems to be calm enough about the war.

vkou 3y ago
> Aren't the best sanction-busting tools the Russians have things named "Rupee" and "Yuan"? Possibly even "gold". They are. Converting crypto to hard currency outside of Russia without tripping flags is certainly possible, but has all the same problems of using hard currency while under sanctions in the first place.
bobthepanda 3y ago
IIRC wasn't Russia having a hard time offloading all the rupees in its possession? https://www.businessinsider.in/policy/economy/news/russia-doesnt-know-what-to-do-with-the-1-billion-in-rupees-it-is-amassing-in-india-each-month/articleshow/100676904.cms https://www.businessinsider.in/policy/economy/news/russia-do...
btilly 3y ago
Those are great sanction-busting tools for getting payments from organizations who actively wish to cooperate with Russia to get paid. They aren't good tools for getting paid by victims of cyberattacks.
- roenxi 3y ago
  That isn't really sanction-busting. Committing crimes was already illegal before Russia was sanctioned. In point of fact, it is probably still illegal in Russia.

0xDEF 3y ago

A lot of the fraud and laundering happening after the Russian invasion of Ukraine is definitely something Russia is doing to earn some extra cash and hurt the West. However before 2022 it was just as much wealthy Russians doing it to put their money beyond the reach of the Russian state. https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_scandal https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_s...

vkou 3y ago
> A lot of the fraud and laundering happening after the Russian invasion of Ukraine is definitely something Russia is doing to earn some extra cash and hurt the West. That's like saying that US-made guns fueling cartel violence is 'America doing something to earn some extra cash, and to hurt Mexico'. It's ridiculous, and not accurate. It's just economically-rational actors trying to make money, and taking advantage of legislative and enforcement arbitrage. This kind of arbitrage exists any time two different systems interact with eachother. Foreigners, and foreign criminals are not some weird hive mind in cahoots with their state.