Neo-Nazis Bet Big on Bitcoin (And Lost)
How the far-right's failed cryptocurrency gamble became a bad joke for the Christchurch killer.
The neo-Nazi terrorist who takes credit for murdering 50 people in Christchurch, New Zealand, on March 15 released a manifesto. One of the claims inside it is that he did very well investing in cryptocurrency—specifically, a collapsed Ponzi scheme called Bitconnect.
Like much of the shooter’s manifesto, the claim about cryptocurrency is almost certainly nonsense—thrown in to get the media to chase their tails as they try to make sense of a deliberately confusing stew of alt-right memes and neo-Nazi in-jokes.
The reason it works as an in-joke is exactly because cryptocurrencies have become a favorite resource for the far-right—if rarely a successful one. White nationalists were known to be getting into cryptocurrencies during the 2017 bitcoin bubble, because PayPal kept cutting them off. The further joke is that Bitconnect is best known not for having helped its investors succeed but for taking them for millions, if not billions, of dollars. And Bitconnect started in 2016—but the shooter claimed to have made the money before he went traveling in 2010 or so.
Bitcoin is a somewhat-decentralized payment system, with its own digital currency. You can speculate on the price of the currency—it peaked at just under $20,000 a bitcoin in December 2017, though the current price in March is wobbling around $4,000—but you can also send bitcoin payments to anyone, with no one being able to stop you from doing so.
The far-right became interested in bitcoin as its members were cut off from more conventional payment channels. After neo-Nazis gathered from across the United States for the violent and bloody Unite the Right rally in Charlottesville, Virginia, in August 2017, many alt-right figures were cut off by PayPal and credit card processors. They began touting bitcoin as a payment alternative—helped by the cryptocurrency bubble still riding on its upward slope. The white nationalist Richard Spencer, always keen to jump to the front of a crowd, proclaimed bitcoin “the currency of the alt-right”—though he admitted he hadn’t bought in himself.
Yet there were ideological ties, as well as practical considerations, that may have helped push neo-Nazis toward bitcoin. Bitcoin advocates—who are very ideologically committed to cryptocurrency—were, for the most part, as horrified by last week’s Islamophobic and racist murder as any reasonable human and have nothing but contempt for neo-Nazis.
Bitcoin ideology is not a neo-Nazi ideology. However, bitcoin’s right-libertarian anarcho-capitalism is very much in range of far-right extremism, particularly in the degree to which both propagate “international banker” and Rothschild-style conspiracy theories, and there are social spaces where the two cross directly, such as the /biz/ cryptocurrency forum on 4chan.
David Golumbia is the author of the 2016 book The Politics of Bitcoin: Software as Right-Wing Extremism. He documents the history of the ideas that went into bitcoin—such as long-running anti-Semitic conspiracy theories about “international,” i.e., Jewish, bankers—and how these extremist ideas are propagated by the subculture, even as present-day enthusiasts would utterly repudiate the ideas’ origins.
“I think only a small number of cryptocurrency users are out-and-out fascists or Nazis,” Golumbia told Foreign Policy. “But I also suspect that the proportion of fascists in that world is higher than it is in the general population. That’s due to the widespread presence of conspiratorial ideas in cryptocurrency communities. Many in cryptocurrency actively promote ignorance about what should be clear and uncontroversial facts about the world.”
Bitcoiners are, understandably, in some denial as to how cozy the two strains can get—nobody wants to think of their friends and associates as holding these vicious views. But the crossovers started early. Timothy C. May was an anarcho-capitalist and cryptographer who wrote the hugely influential “Crypto Anarchist Manifesto” in 1988, which sets out many of the demands and expectations that the bitcoin subculture started from 20 years later. May was lauded as a respected elder philosopher of bitcoin before his death in 2018.
At this point, May’s writings in the intervening decades came to greater public notice—such as the text in which he advocated “a trip up the chimneys” for 40 million Jewish, black, and Hispanic Americans. His bitcoin friends claimed May was just being a “troll”—in which case, he had not broken comedic character in his “trolling” in 30 years or more. The neo-Nazis themselves were delighted to embrace May with a laudatory obituary on the white nationalist site the Daily Stormer.
At the peak of the 2017 bitcoin bubble, many worried that neo-Nazis who had bought into bitcoin were now rich and well-resourced.
That wealth, however, wasn’t as invisible as the far-right would like. Bitcoin is pseudonymous, not anonymous, and carries a public ledger of all transactions—so there are multiple sites that track payments to known bitcoin addresses for far-right and so-called alt-lite figures. The “Neonazi BTC Tracker” on Twitter (@neonaziwallets), run by John Bambenek of the computer security service ThreatSTOP, documents the flow of cryptocurrency funds within the white nationalist subculture. Bambenek has also worked with the Southern Poverty Law Center on monitoring these groups.
“Bitcoin provides these neo-Nazi terror groups—and they are terror groups—the ability to raise and spend money in a way that’s hard to disrupt,” Bambenek told Foreign Policy. “But it also provides an intelligence analyst like me unfettered ability to surveil them, because they surrender all their privacy rights by using it—because bitcoin’s ledger is public.”
Cashing out your bitcoins can be tricky. There are only a few cryptocurrency exchanges that one can get U.S. dollars out of with any trust or reliability, and banks are reluctant to touch money from cryptos. “Bitcoin only means something if you can turn it into actual money or stuff,” Bambenek said. “That can only happen in a few hundred places—and many of those places have been immensely helpful [to the anti-Nazi cause].”
Coinbase, the most popular U.S. bitcoin exchange, has stated that it actively seeks and removes violent extremists from its platform. Coinbase also removes the platforms used by the extremists—it removed the far-right Twitter clone Gab after the Pittsburgh synagogue shooting suspect Robert Bowers allegedly planned his mass murder there, his last Gab post being: “Screw your optics, I’m going in.”
It helps Bambenek’s work that neo-Nazis lack the self-restraint not to publicly reveal themselves—for example, one recent transaction sent 0.001488 bitcoins (about $5.93 at the time) to the Daily Stormer. “1488” is a number that is used as a signal between neo-Nazis—“14” is for the white supremacist slogan known as “the fourteen words” (“We must secure the existence of our people and a future for white children”), and “88” is for “Heil Hitler.”
“These guys can’t help but identify themselves,” Bambenek said. “It surprises me they are such an odd combination of arrogance and incompetence.”
As of 2019, the online alt-right is less interested in bitcoin, said Daniel Harper, a researcher for the podcast I Don’t Speak German, which covers the online alt-right and white nationalist sphere. Aside from being ridiculously traceable, bitcoin just isn’t a good payment network.
“Bitcoin was always a means to an end—it was a way of evading some of the scrutiny of pushing cash around,” Harper said.
The white nationalist podcast network, desperate for a funding channel after being cut off from the conventional financial system, strongly advocated bitcoin and cryptocurrencies in 2017. “There were a couple of guys who saw the Federal Reserve as inherently Jewish and inflating money. But they mainly just used it as a tool, more than an ideological commitment.”
Bitcoin also failed for the neo-Nazis as a funding channel, because cryptocurrency is still too hard to use. “Nobody would go to the effort to get a bitcoin wallet to give them the 10 bucks a month that they were more than happy to give them.” One neo-Nazi podcaster found a credit card processor that was fine with the content of his show but said he was untouchable for another reason: He was considered a money laundering risk because he dealt in cryptocurrency.
In 2019, white nationalist podcasts barely mention bitcoin. “The numbers aren’t going up, so they’re not telling people to invest in it,” Harper said. “They all still have bitcoin wallets, so you can still donate to them by bitcoin—but it’s just not a big deal for them anymore.” For the Christchurch terrorist, dreams of being a cryptocurrency millionaire were probably just another cold joke.