White Supremacists Are Investing in a Cryptocurrency That Promises to Be Completely Untraceable

Far-right podcast host Christopher Cantwell had already been denied one source of funding even before his name became synonymous with the deadly Unite the Right rally in Charlottesville, Virginia, on August 12 last year. The crowdfunding platform Patreon would be far from the last revenue stream to become off limits.

After the infamous rally, the Hitler aficionado was turned away by essentially everyone else: He was banned from accessing PayPal, Stripe, and MakerSupport for promoting racism and a hatred of Jews—eliminating the ways that independent content creators typically solicit donations from their fans.

Cantwell has been using Bitcoin since 2013 but has more recently been promoting Monero, a controversial, decentralized cryptocurrency that promises total anonymity in its transactions. He views it as an alternative way for his white supremacist fan base to give him handouts, but also as a tool that can be used by purveyors of his extremist lifestyle in a more general sense. Monero is growing in popularity among men like Cantwell for the same reason that it's being used among members of the criminal underworld—it enables them to keep their business dealings hidden from the eyes of the law.

The head of a club studying cryptocurrencies checks a chart after a meeting at a university in Seoul, South Korea, on December 20, 2017. American white supremacists have shown an increased interest in cryptocurrency since 2014, researchers say. Kim Hong-Ji/Reuters

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"If you think about the white nationalist political movement there's just a great deal of paranoia in it—they believe that the country is being completely taken over," said Lucas Nuzzi, the Director of Technology at Digital Asset Research, an expert in cryptocurrency. "So, it's not surprising that they would be gravitating to something like Monero, which promises them anonymous transactions."

In Cantwell's case, it's not about who he believes is trying to take over the country, but about who he imagines already runs it. Cantwell embraces a number of blatantly false conspiracy theories surrounding Jewish people and scapegoats them for his struggles with finance. (For the record, many of the platforms from which he was banned are demonstrably owned and operated by non-Jews). He told Newsweek that he believes "Jews" are shutting him out of finance because of his associations with anti-Semitism, which he himself put on display by participating in a much-discussed VICE documentary about the events in Charlottesville.

But Cantwell is not only limited in his capacity to use crowdfunding websites. He faces a myriad of legal troubles and increased scrutiny from law enforcement as a result of them. He is tethered by GPS to a confined area of Virginia while he awaits trial this August on a felony charge for his alleged use of tear gas during the deadly Charlottesville rally. He also faces a number of lawsuits related to that event.

A member of the Traditionalist Workers Party does a salute outside of a Richard Spencer speech on the campus of Michigan State University in East Lansing, Michigan, on March 5. Many white supremacists lost access to crowdfunding websites within the last year. REUTERS/Stephanie Keith

Monero was not necessarily designed as a tool to work around the scrutiny of law enforcement or the IRS, but the appeal for someone who may want to do so is obvious, Nuzzi posited.

"It's very difficult to estimate how much of Monero's user base is composed of criminals or extremists" like Cantwell, Nuzzi said, suggesting that the number of overall users who fit into these categories is likely small. "The appeal is that whoever is looking at a given transaction can't pinpoint who sent and received the money."

Yet, while transactions involving this "experimental" privacy coin may be anonymous, Nuzzi added, they aren't user-friendly yet. The transactions lack standardization and typically require a "bridge" from a more prominent cryptocurrency like Bitcoin in order to pull off. That means that if someone wanted to convert U.S. dollars into Monero, he or she would first have to purchase Bitcoin before moving forward.

That's where the promise of completely anonymous transactions is weakened, according to John Bambenek, a researcher for Cybersecurity and Intelligence group ThreatStop. Bambenek runs the Twitter account @Neonaziwallets, which since Charlottesville has tracked the Bitcoin wealth of people like Andrew Anglin, the editor of the sophomoric neo-Nazi website Daily Stormer, and Andrew "Weev" Auernheimer, its tech expert.

Daily Stormer, which, like Cantwell's radio show, has been orphaned by traditional payment services and been targeted with lawsuits over its content, now accepts handouts in Monero as well as Bitcoin.

Dailystormer daily wallet summary report. Rec: 56.1950 BTC ~$479,667.15 USD, Spent: 54.7270 BTC ~$467,136.33, Bal: 1.4680 BTC ~$12,530.82.

— Neonazi BTC Tracker (@NeonaziWallets) March 25, 2018

"Monero has value but only if it turns into money. And you can only do that in certain places," Bambenek says. "No one cares about your crypto if you can't turn it into real money."

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Auernheimer, who researchers believe is living in Ukraine right now, likely inherited an influx of wealth from the growth of cryptocurrencies over the last few years, making him considerably richer than his fellow white supremacists, according to Mark Pitcavage, a researcher and historian with the Anti-Defamation League. Indeed, by some estimates, Auernheimer is a cryptocurrency millionaire.

Bambenek calls Auernheimer a "coward," because of the degree to which he hides his transactions and whereabouts while espousing potentially dangerous rhetoric—like when he appeared to threaten to kill Jewish children in retribution for his website being censored. Still, he says that he's getting closer to tracking Auernheimer's use of Monero by monitoring so-called bridge transactions, which track the step from Monero to another cryptocurrency like Bitcoin, and by tracking "cash-outs and cash-ins" of Daily Stormer-related financial arrangements.

"They've been particularly irritated with what I'm doing," Bambenek says about publicizing the finances of Anglin and Auernheimer. "So, they've moved to Monero in part to make my work more difficult."

Auernheimer claims not to know of Bambenek's research. He tells Newsweek that he likes Monero because of its promise to secure privacy, and says he first discovered it when people offered to send him "large amounts of it." He adds that he's in a position where he wants to hold less cryptocurrency. He did not elaborate on why that is so.

"What I do hold, I hold almost entirely in Monero," the reclusive neo-Nazi says of cryptocurrency.

Pitcavage, who has been studying far-right movements for decades, said that while Cantwell aggressively promotes Monero to work around what he calls "the Jewish banking system," and Auernheimer is likely wealthy, it's important to keep in perspective the fact that most white supremacists still don't use cryptocurrency at all. In fact, there is limited money to go around in their movement.

Some white supremacists, like Andrew Anglin of Daily Stormer, started voicing an interest in the privacy coin Monero earlier this year, as he did on the social media network Gab. Anglin later added an option on his website to seek handouts through donations of Monero. GAB

White supremacists, Pitcavage said, first started to use crypto in 2014 when Bitcoin initially garnered widespread attention. But men like Anglin and Cantwell only started promoting Monero in recent months, according to Newsweek's analysis of their social media posts and podcast appearances.

In addition to seeking donations outside of traditional platforms, some on the far-right promote the idea of mining cryptocurrency simply as a way to get rich quick.

"They hope that a newer cryptocurrency will take off like Bitcoin did," Pitcavage said, referring to a boom that recently swept through that market. "It becomes kind of a gold rush mentality."

In addition to an interest in more advanced privacy coins like Monero, there are also more frivolous, low-value cryptocurrencies linked to the alt-right. In their very names, these cryptocurrencies are far from bashful about the users they hope to attract. First, there is "chancoin," which derives its name from imageboard sites like 4chan and 8chan—two hubs that have become synonymous with Internet trolling culture.

And then there is one named after the cartoon Pepe the Frog that was co-opted by the alt-right during the 2016 election of Donald Trump. "Pepecash" currently trades at less than three cents.