Facing exclusion from the mainstream financial system, right-wing extremists are turning to cryptocurrencies such as bitcoin to raise funds, a blockchain analysis firm said Wednesday.
Elliptic said in in a blog post that its research team analyzed hate symbols in the bitcoin blockchain to uncover new cryptocurrency wallets associated with white supremacists and neo-Nazis.
In response to the far right using the internet to build followings, raise funds and incite violence, Elliptic said, technology companies have started to deplatform organizations and individuals promoting far-right ideologies.
Payments companies such as PayPal (PYPL) - Get PayPal Holdings, Inc. Report, Visa (V) - Get Visa Inc. Class A Report and Mastercard (MA) - Get Mastercard Incorporated Class A Report now block payments to some of these groups.
Cryptocurrencies do not have a central authority that can censor transactions, the firm said.
Neo-Nazi news sites, white supremacist blogs and far-right video-sharing platforms have all embraced cryptocurrency payments.
Elliptic said its analysis has identified at least $8.9 million in cryptocurrency payments to wallets associated with far-right extremism.
"Visual hate symbols such as the swastika are well known neo-Nazi signifiers, but numbers are also used to identify and signal links to these groups," Elliptic said in the post.
"For example the number '88' is used by many far-right extremists to represent the phrase 'Heil Hitler,' because H is the eighth letter in the alphabet."
The number “14” is numerical shorthand for the white supremacist slogan known as the "14 Words," the firm said, and these numbers are commonly combined, with “1488” acting as a key symbol of neo-Nazi and white supremacist ideology.
"In the case of one extremist wallet, 47% of all payments received were for amounts containing '1488'," Elliptic said. "This is 30,000 times more than was seen for active cryptocurrency wallets with no known links to the far-right."
Payments in bitcoin valued at more than $500,000 were made to 22 different virtual wallets, most of them belonging to far-right activists and internet personalities, before the storming of the U.S. Capitol on Jan. 6, the cryptocurrency compliance startup Chainalysis said earlier this year.
The Southern Poverty Law Center has also warned about extremist groups and cryptocurrency, noting that the white nationalist Richard Spencer has stated "bitcoin is the “currency of the alt-right."
The center said on its website that decentralized, peer-to-peer cryptocurrency has obvious appeal to hate-group leaders and other influential extremists. No company and no government can intervene to stop the donations from flowing.
The center said that because of this, many on the far-right were early adopters, with a number of them cashing in as the currency’s valuation skyrocketed at the end of 2017
TheStreet Recommends: Inflation Is Here. How Prepared Is Your Portfolio? FREE Webinar