Congressional hearing warns on crypto-funded election meddling
US Congressional representatives vented their concerns on Tuesday night about the potential use of cryptocurrencies for making illegal campaign donations.
The Subcommittee on Crime and Terrorism held a hearing entitled “Protecting our elections: examining shell companies and virtual currencies as avenues for foreign interference”, led by Senator Lindsey Graham, with witnesses from the Financial Integrity Network, Identity and Payments Association and the Centre for Responsive Politics.
Identity and Payments Association
Scott Dueweke, director at the Identity and Payments Association said that cryptocurrencies were “tailor made” for foreign parties and state actors to affect the US political process, as payments through such digital assets shielded the identities of those using them.
He warned particularly of potential Russian involvement – particularly considering a large percentage of global criminal hackers “are Russian or speak Russian”, adding that 25% of Darknet content was Russian.
“Given Russia’s current state of tension with the United States and Europe, this development should be closely monitored,” he said.
Financial Integrity Network
David Murray, vice president of product development at the Financial Integrity Network said virtual currencies represented a newer financial transparency challenge.
“Some promote anonymity and irreversible settlement – two traits that are particularly attractive to criminals,” he said.
Foreign-source donation were difficult to detect, he said, when non-intermediated payment methods such as the decentralised, open source methods used by cryptocurrency platforms.
He warned: “As long as a contributor provides a donor attestation and uses a US address, the contribution would appear legitimate and not prompt any additional due diligence requirements on the part of the recipient.”
Centre for Responsive Politics
Sheila Krumholz, executive director of the Centre for Responsive Politics, lamented that funding in politics and the many paths the money can take were now so numerous the sources were frequently unknown and unknowable.
“Given that anonymous money now flows through the campaign finance system, there is no way to know how much of this money might be coming from foreign sources, or whether they are foreign individuals, corporations or governments,” she said.