This content was written by Chainalysis.

In a world where nearly half the population will participate in national elections in 2024, the stakes for securing democratic processes have never been higher. Disinformation campaigns—especially those funded through crypto—have become a potent tool for states like Russia, China, and North Korea to destabilize democratic institutions, influence public sentiment and erode trust in governance. Chainalysis’ Malign Interference and Cryptocurrency report sheds light on the pivotal role of crypto tracing in identifying and countering these threats.

In spite of their pseudonymity, the transparency of the blockchain provides investigators a powerful tool to investigate how malign actors abuse cryptocurrency. Each transaction leaves a permanent, traceable record, allowing analysts to connect the financial dots across complex networks of accounts. This traceability was crucial in identifying the funding behind Russian disinformation efforts in recent U.S. elections. The funds used to purchase web domains and social media accounts were traced back to Kremlin-affiliated actors, highlighting crypto’s role in the infrastructure of disinformation.

Sanctions are among the most effective countermeasures against malign actors using crypto for disinformation. For example, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has sanctioned multiple crypto addresses associated with Russian disinformation entities. These sanctions disrupt financing and make it difficult for actors to raise, transfer, and off-ramp their funds. However, these actors adapt quickly, finding new means of funneling funds and evading detection.

Looking ahead, as AI amplifies the reach and sophistication of disinformation, crypto tracing must continue to evolve. The ongoing development of blockchain analytics tools promises to meet the challenge of tracing disinformation funding in a world where deepfakes, bots, and AI-generated profiles are becoming the norm. The findings from the Malign Interference and Crypto report underscore the importance of collaboration across the public sector, private companies, and international organizations to safeguard democracies from crypto-fueled disinformation threats.

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