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Canada\u2019s Freedom Convoy protesters are increasingly turning to cryptocurrency donations<\/a> for support after crowdfunding site GoFundMe seized millions of dollars that the convoy had raised on the platform. This shift to cryptocurrency mirrors a pattern seen elsewhere, in which controversial figures pivot to cryptocurrency after being denied the ability to raise funds on mainstream financial platforms. In Canada\u2019s southern neighbor, a very different population has also undertaken a similar pivot to cryptocurrency and raked in millions of dollars in cryptocurrency over the past few years: America\u2019s\u00a0far-right domestic extremists. This trend is likely to grow absent action from policymakers.<\/p>\n Far-right domestic extremists\u2014including neo-Nazis, white supremacists, and their fellow travelers\u2014are not newcomers to cryptocurrency usage. Analysts have noted that domestic extremists have received<\/a> cryptocurrency donations since 2016, and many of these figures were early adopters of cryptocurrency. However, the 2017 \u201cUnite the Right\u201d rally in Charlottesville was a watershed moment for America\u2019s domestic extremist milieu and its relationship to cryptocurrency. As banks and other traditional financial providers began to cut off extremist groups and individuals, many flocked to cryptocurrency, enticed by its relative anonymity.<\/p>\n Domestic extremists exploit cryptocurrency in three major ways. First, they solicit cryptocurrency donations in return for content they produce, such as radio shows, blogs and websites, podcasts, and video streams. Second, they sell extremism-oriented merchandise that can be bought with cryptocurrency. And third, extremists accept cryptocurrency donations for general support.\n<\/p>\n Tim Gionet, better known as \u201cBaked Alaska,\u201d stunned the world with his livestream<\/a> of the Capitol assault on video platform DLive. Gionet made over $2,000 from his stream, which showed him breaking into Speaker of the House Nancy Pelosi\u2019s office. DLive allows cryptocurrency-based donations via \u201clemons,\u201d the site\u2019s currency. Viewers buy lemons\u2014DLive offers Bitcoin, Bitcoin Cash, Litecoin, and Ethereum, among others, as alternative payment options\u2014and can send the lemons to streamers as tips.<\/p>\n Nick Fuentes, who hosts America First<\/em>, a podcast that spreads the modern white nationalist movement\u2019s ideology, also had a handsome payday from DLive. Fuentes\u2014who is a leader of the white nationalist and anti-Semitic group Gropyer Army\u2014raised nearly $94,000 on DLive between April 2020 and January 2021; DLive kicked him off the platform after the Capitol assault.<\/p>\n The Right Stuff, a neo-Nazi media network that hosts the shows Fash the Nation <\/em>and The Daily Shoah<\/em>, which promote white supremacy and Holocaust denialism, allows its audience to donate in six different cryptocurrencies on its website. And The Daily Stormer<\/em>, one of the most notorious neo-Nazi message boards and propaganda sites, received a donation of 14.88 bitcoins, worth more than $60,000 at the time, in the wake of the Charlottesville rally. (The amount of the donation is itself a reference to core white supremacist ideas: The \u201c14\u201d is a reference to the late white supremacist David Lane\u2019s 14 words<\/em>, \u201cWe must secure the existence of our people and a future for white children.\u201d The \u201c88\u201d stands for Heil Hitler<\/em>.) The Daily Stormer<\/em> now only accepts<\/a> Monero, a cryptocurrency that claims to be untraceable\u2014thus making it what is termed a \u201cprivacy coin.\u201d\n<\/p>\n In addition to his podcast, Nick Fuentes operates an \u201cAmerica First\u201d store that sells merchandise, including a seasonal collection aptly named \u201cWhite Boy Summer<\/a>.\u201d The merchandise can be purchased with Litecoin. For an even blunter extremist shopping experience, customers can turn to Will2Rise (W2R), the merchandising and media arm of the Rise Above Movement, a white supremacist group that boasts the skinhead movement\u2019s emphasis on street fighting. W2R prides itself on offering an \u201cethical supply chain<\/a>,\u201d noting that: \u201cAll products are made in Eastern Europe, so not a single hand touches the production that is not of like mind.\u201d W2R accepts five different cryptocurrencies as payment, including Bitcoin and Ethereum.<\/p>\n Domestic extremists are also finding their pleas for help\u2014be it general support or fundraising for legal defense\u2014answered by cryptocurrency. Jason Kessler, the organizer of the \u201cUnite the Right\u201d rally, solicits cryptocurrency donations for his Charlottesville legal defense fund. One campaign for Kessler\u2019s legal defense on GiveSendGo<\/em>, a Christian crowdfunding site, offers Bitcoin and Monero, a privacy coin, as ways to support the fund.\n<\/p>\n The National Socialist Movement (NSM) bills itself as \u201cAmerica\u2019s Premier White Civil Rights Organization<\/a>\u201d and, unsurprisingly, advocates for national socialism in the United States. An individual affiliated with the group attempted to attack<\/a> black passengers on an Amtrak train in 2017. NSM accepts Bitcoin donations on its website. Similarly, Atomwaffen Division, an accelerationist white supremacist group that aims to foment a race war that will cause the collapse of the U.S. political system, accepted Monero donations on a website affiliated with the group. (In March 2020, Atomwaffen ostensibly disbanded, though analysts believe it rebranded itself as the National Socialist Order.)<\/p>\n Indeed, Monero donations signal an increasing\u2014and increasingly worrying\u2014trend of domestic extremists trying to obfuscate their identities. As law enforcement investigations of domestic extremism grow, extremists have attempted to obstruct the tracing of cryptocurrency payments. In addition to the adoption of Monero and other privacy coins, extremists have used tactics to mask ownership of funds, such as \u201cmixing\u201d or \u201ccoinjoining,\u201d protocols where users, for a small fee, can hide the ownership of their funds.\n<\/p>\n As domestic extremists get savvy, it\u2019s time for us to get smart. To curb extremists\u2019 activities, and mitigate the threats they pose, their funding streams should be blocked. Luckily, the U.S. government and the private sector can institute many policies which do that within three broad lines of effort: increasing designations, instituting regulations and standards, and forging public-private partnerships.<\/p>\n First, the U.S. government should designate<\/a> violent white supremacist groups as terrorist organizations. Designations are one of the most powerful tools that the U.S. government can deploy to disrupt extremists\u2019 fundraising capabilities, but the United States has only designated one white supremacist group to date. While U.S. law prohibits designations of domestic groups, the government can and should increase designations of violent white supremacist groups that have a foreign nexus. The power of designations would also encourage cryptocurrency companies to disengage from designated entities.\n<\/p>\n Second, policymakers should consider a host of regulations to bring cryptocurrencies, including privacy coins and central bank digital currencies (CBDC), under the regulatory perimeter. Regulations would provide the cryptocurrency industry with a clear, uniform set of rules for how to treat illicit activity. Regulations for privacy coins could take the form of strengthening reporting standards for cryptocurrency exchanges that transact with privacy coins. Establishing standards now for CBDCs, such as the digital dollar\u2014even if adoption of these currencies remains years away\u2014would help mitigate extremists\u2019 abuse of government-backed digital currencies. Supporting global standards on virtual assets would also help prevent extremists\u2019 ability to exploit cryptocurrency by closing the gaps between regulatory regimes in different countries, and would provide the cryptocurrency industry with uniform standards for assessing illicit or suspicious transactions.<\/p>\n Lastly, blockchain analysis firms and non-partisan watchdog groups should form public-private partnerships. Such collaboration would leverage both actors\u2019 tools to produce actionable intelligence. Ultimately, such partnerships would increase awareness of how extremists use cryptocurrencies and would allow relevant companies in the cryptocurrency space to better understand this usage.\n<\/p>\n As the Freedom Convoy protests enter their fourth week, the Canadian government is targeting<\/a> protestors\u2019 ability to fundraise, including via cryptocurrency. It\u2019s time for Washington to do the same for domestic extremists. Absent action, cryptocurrency will remain their cash cow.<\/p>\n Daveed Gartenstein-Ross\u00a0is the CEO of Valens Global and leads a project on domestic extremism for the Foundation for Defense of Democracies.\u00a0Varsha Koduvayur\u00a0is an analyst at Valens Global, where she focuses on U.S. domestic extremism and geopolitics. Follow Daveed on Twitter\u00a0<\/em>@DaveedGR<\/em><\/a> and Varsha\u00a0<\/em>@varshakoduvayur<\/em><\/a>.<\/em>
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