Dark Trades – How Brexit And Trump Shorted Crypto
A stumble into crypto-jacking leads from Russia's bitcoin mining, to far-right disinformation campaigns, to dark trades on the Brexit and Trump votes...
It was only on the 16th of February this year, having been cursed with a slow PC, that I fell down a rabbit hole and landed in cryptojacking wonderland – the place where Bitcoin and the like is mined through your browser when you visit viral, fake news, and even legitimate looking websites.
What I didn't realise, down in the dark of the bitmine, was that it would lead me back to places I'd already found in the seedy underworld, events I thought I knew enough about already, and faces I wish never had to see again...
“While I had no idea this would take me to a frantic disinformation campaign surrounding the horrific Parkland shooting, a drive to minimise the US impact (on Trump) of the 13 indictments lodged by Mueller against Russia's Internet Research Agency, a deliberate attack designed to commercially disadvantage Twitter, and short-selling of Bitcoin during Brexit, all the old instincts were alive and screaming. I was on to something.”
So, fake news and cryptojacking go hand-in-hand, I'm thinking to myself. For a second believing I'd just done a standalone article, I could walk away from and leave well alone. I managed a full five minutes, in fact, before I started to idly skim back over my old Byline articles, feeling a sense of familiarity, and with a tingling sensation in my stomach which I'd once relied upon back in the days of policing.
At first I couldn't think what it could be, my brain having been battered half to death by a lethal combination of information overload and trolling. So, I let my mind do its own thing - free-styling its way back from a new track it was beating.
Sitting in front of Google, blank search bar staring back at me, didn't help. But a Twitter DM did.
Though it was about a cryptocurrency called Verge XVG, which I knew nothing of, it transpired I did know something about one of the names the message mentioned. So, I abandoned Google and ventured into the seedy domain of the alt-right's Gab.ai, a social network emblazened with the now familiar logo of a green frog.
While I had no idea this would take me to a frantic disinformation campaign surrounding the horrific Parkland shooting, a drive to minimise the US impact (on Trump) of the 13 indictments lodged by Mueller against Russia's Internet Research Agency, a deliberate attack designed to commercially disadvantage Twitter, and short-selling of Bitcoin during Brexit, all the old instincts were alive and screaming. I was on to something.
“Sat staring into this abyss, I noticed Andrew Torba, the founder of Gab.ai determined to destroy Twitter as a platform, in a photograph with British MEP Nigel Farage.”
Gab.ai, to the uninitiated, looks and feels a lot like Twitter. The timeline and interactions are essentially the same layout, and the way accounts are presented is more than familiar. One key difference is the lack of advertising, though some users now create “premium content” which you can only access if you pay for it. Sounds reasonable, right?
I already knew what Gab was about when I signed into it the first time - it's the Alt-right version of Twitter which proclaims freedom of speech as its founding principle. In reality, it's a place where racists who have been banned from mainstream social media go to spew bile and plot disinformation campaigns.
Writing about the platform previously, I described it as: “a truth vacuum acting as an incubator for lunacy...a snapshot of the alternative world growing around us in which radicalisation festers.”
I didn't need a re-run of Gab's origin story straight away though, I needed to find out if the search function worked as well as the bluebird's. It was good enough.
I found what I was looking for straight away.
Yes, it was a post from an anonymous account called Microchip, whose avatar is a Pepe the frog, adapted image of an Instagram model (Brock someone), wearing a MAGA hat and eating an icecream.
In one of his most recent incarnations on Twitter – where he is perma-banned and Twitter safety play whack-a-mole with his constant establishment of new user IDs – he took on the handle @TEN_GOP_1, ripping off an account known to have been operated direct from St Petersburg by the recently indicted Internet Research Agency as part of Russia's interference in the 2016 Presidential election race.
Under this guise, Microchip managed to dupe a number of key commentators into believing they had caught a genuine Russian troll, damaging their credibility in the process. (Microchip did little more than manually tag his tweets as being from Moscow and changed his geolocation and public profile location to Moscow, something he was openly bragging about on Gab.)
The idea? Simply to muddy the waters around Mueller's Internet Research Agency indictments, discredit the media and, Microchip states: insulate Trump from as much damage as possible.
It doesn't look like much all this, not really. The games of some peurile 4chan graduates. But the identity of Microchip is quite the prize. And there he was, openly admitting to being a cryptocurrency trader whose identity was easily traceable.
Exciting stuff, right? A big unmasking like this. And on the face of it, Peter Galanko (@XVGWhale) does seem like a good candidate but, once you start scratching at it, the veneer of probability doesn't stand up so well.
The first red flag is the sudden give-away of the secret identity in the first place, and then there's the timing of it – Galanko had fallen out with John McAfee.
The case for, however, wasn't half bad at a quick glance.
Verge XVG is a relatively new cryptocurrency, worth virtually nothing compared to established coins, and Galanko appears to be an unofficially affiliated advocate of the online monetary unit.
Reading through his Twitter account, he appears Tech-savvy and experienced in digital viral marketing, is inclined towards social media warfare, and is very much anti-establishment – referring to the current central banking system as “the Creature From Jekyll Island,” while dreaming of a future where he can joke about his role in breaking it.
Even under his new Twitter handle, @XVGWhaleReal, Galanko talks about memes, trolling, and intimates he has a Pepe fan page lurking somewhere online.
Ideal candidate for a mega MAGA troll, right?
Sadly the answer is probably not, and the case against is compelling.
Microchip fiercely defends his identity and almost continuously plants false stories identifying himself, with a bent on discrediting his opponents, perceived enemies, and the mainstream media. This is open knowledge on Gab, and something with Microchip and his network delight in.
The Buzzfeed story they mention is a clear example of how mainstream journalists have been so easily drawn into the narratives of disinformation invented by Gab's elaborate network of users. And how this is then presented to the public as fact, which changes the subsequent narratives around the topic as a whole.
While the article ended up being rather helpful for unintended reasons, I have to re-iterate my previous concerns that the outlet has some soul searching to do around its coverage of the Alt-Right. I reported on this back in October 2017, highlighting: “A sentiment analysis of Buzzfeed articles has revealed an overwhelming positive favouring of Nazis,” and this still troubles me even now.
I didn't even know about the Buzzfeed article when I first came across Microchip. In fact, I stumbled across his Twitter account when it was spreading disinformation after the Las Vegas mass shooting and raised concerns direct with the NCA and FBI about his comments around the radicalisation of children.
My concerns had proven well-founded by the time I came back to Microchip via cryptocurrency, because the disinformation narratives around the Parkland shooting – claiming the child victims were Democrat-hired Actors among other falsehoods – were initiated by him on Gab. So, now you know the origin of the term “crisis actors” which was also more broadly spread by not only Info Wars but Russian troll networks too.
At the same time as Parkland, Microchip was continuing calls for disaffected children to get in touch with him – intent on encouraging more school shootings.
By the time I read the Buzzfeed piece properly, I already knew Microchip wasn't from Utah. Nonetheless, some of the admissions by the man himself turned out to be very useful indeed, in the end - I kept skimming through Gab, searching out mentions of Microchip and crypto, and things became interesting all on their own. Because of the relationship between the infamous troll and one Andrew Torba.
I found Microchip didn't really matter, nor did Galanko. Not even with the hint of crypto-mining which I'd written about before. Because, sat staring into this abyss, I noticed Andrew Torba, the founder of Gab.ai, determined to destroy Twitter as a platform, in a photograph with British MEP Nigel Farage.
“/ourguy/” Torba wrote.
Our guy? Well, it turns out they have quote a lot in common ideologically and are both firm supporters of Trump but something else caught my eye. Torba had been trying to launch a crypto currency all of his own.
This was a second major link Farage and the seedier side of Crypto-currency – the first arising from the indictment of his assistant George Cottrell following his arrest at Chicago's O'hare airport over a money-laundering plot. According to the published indictment, Cottrell was known as “Banker.”
A year on from my book, Alternative War, which mentioned this, and the Guardian have recently unveiled that Farage's Leave.EU campaign forwarded allegedly confidential details of Cottrell's arrest to the Russian embassy in London.
By December 2017, Arron Banks' long term friend and investor Jim Mellon was withdrawing from Bitcoin.
Everything suddenly slotted into place.
Writing the book, I had typed out the phrase: “Data is, in fact, now the single biggest commodity in the world and can be used to drive electorates in almost every aspect of their decision making – the ownership of this data subsequently controls geopolitics and the world financial markets.” By December 2017, Arron Banks' long term friend and investor Jim Mellon was withdrawing from Bitcoin.
At the time he wrote in Master Investor: “My mole in the crypto world – he who has made a lot of money for his investors (me included) by being a committed bull – is even now taking some money off the table (only with difficulty can the coins be converted into spendable cash). This tells you a lot of what you need to know. It’s not time to jump into the pool, just as it is beginning to drain.”
And this made me return to my conclusion that the Brexit and Trump votes were used to short the markets, including through the use of announcements conceding defeat by the ultimately victorious parties.
I'd tried for a year to get market data, even contacted Bloomberg and explained why I was interested in acquiring their data. I had no joy whatsoever.
Then, they published an absolute bombshell.
So I was right. Frustratingly right.
But even though this should have probably been enough, it wasn't. Because they hadn't looked at the Bitcoin trades.
The Bitcoin markets were shorted too, in the opposite direction. Investors with an apparent degree of inside knowledge made an absolute killing in two ways.
The value of Bitcoin exploded from around the point of the Brexit vote, peaking at ludicrous values in 2017.
On the day of the Brexit vote, at the time of Farage's announcement of impending defeat, the value fell off a cliff edge then leapt up again when the win was confirmed. This is exact opposite direction of travel to the main markets – and the trend continued to move in the opposite direction to the pound.
The same pattern repeated again around Trump's election, again in the opposite direction to the main markets.
Worst of all, crypto-currency is almost completely untraceable. They stand to get away clean, again having exploited weak regulation and outdated legal frameworks.
The whole mess of Russian hacking, Cambridge Analytica, the Trump and Leave Campaigns was not only a coup but an unprecedented shorting of the market through what I called: “mass manipulation of the electorate with the aim of controlling not only geopolitics but the financial markets too.”
These are the dark trades, the clues buried in the web of segmented and hostile disinformation.
This is how the black markets were shorted during the Brexit vote and Trump election.
And if you want to continue looking into this, I'd suggest you start with history, by looking up the search terms “Rees-Mogg+Crypto.”