US far-right extremists making millions via social media and cryptocurrency
Dozens of extremist groups and individuals, including some involved in the Capitol attack, have used social media platforms, cryptocurrencies, taxexempt status and other fundraising tools to rake in about $1.5m in the last year, according to experts.
Two recent studies by groups that track extremist financing, the Global Disinformation Index (GDI) and the Southern Poverty Law Center (SPLC), underscore the growing threat posed by far-right extremists, including those who attacked Congress to stop the certification of the 2020 election results.
The recent studies and testimony delivered to a House committee by representatives from the SPLC and GDI in late February showed that the Oath Keepers, Proud Boys and others with white supremacist and anti-immigrant bias, reaped windfalls via the streaming platform DLive, cryptocurrencies and other fundraising methods.
Megan Squire, a computer science professor at Elon University and a senior fellow at the SPLC, found that from 15 April to early February, 55 extremist individuals and groups used the video streaming platform DLive, which allows cryptocurrency-based donations for content, to pull in just under $866,700.
“The idea that multiple hate groups could raise tens of thousands of dollars a month from bleeding-edge technology and a tiny donor pool should be terrifying, not ho-hum,” Squire said in an interview. “This is the canary in the coalmine, and we ignore it at our peril.”
In a statement, DLive noted its guidelines prohibit hate speech and inciting violence, and that after the Capitol attack it “indefinitely suspended the accounts of the individuals who used DLive to livestream from the riots,” and their access to any “tokens given to them by community members”.
According to GDI co-founder Daniel Rogers, 44% of the 73 hate groups he has studied have benefited by securing tax exempt status from the Internal Revenue Service.
In testimony to the House financial services subcommittee on 25 February, Rogers revealed that the Oath Keepers founder Stewart Rhodes last year used a podcast hosted by Mike Adams of Natural News, a conspiracy theorist outlet, to raise funds for a taxexempt affiliate dubbed Oath Keepers Educational Foundation.
In an interview, Rogers said so many groups that “are trying to overthrow the government” receive tax-exempt status by registering as charitable or social welfare organizations. “There has been a degradation of enforcement at the IRS,” he said.
An IRS spokesperson declined to comment based on federal disclosure law, which prohibits discussion of individual cases.
Avenues that extremists have exploited to raise funds are expected to face growing scrutiny with the widening federal investigations of the 6 January attack that so far have resulted in charges against over 300 individuals.
Squire noted in an interview that Nick Fuentes, a leader of the so- called Groyper Army, used DLive to raise almost $94,000 from last April to January (when he was barred from the platform after the attack on the Capitol), and received about $250,000 in bitcoin last December from a mysterious French donor with far-right ties.
Rogers said that at least 24 people charged by the justice department for their roles in the Capitol attack, including eight Proud Boys, have used the Christian crowdfunding site GiveSendGo to raise nearly a quarter of a million dollars to help with legal, medical and travel costs.
Jacob Wells, the chief financial officer of GiveSendGo, noted in a statement that there have been “no campaigns on GiveSendGo raising funds for illegal activities”. But Wells said he didn’t see any reason “to prohibit people from fundraising for their own legal defense”.
More broadly, Rogers said in his House testimony that the tax-exempt status enjoyed by so many extremist groups provides them with “automatic access to a whole spectrum of charity fundraising tools, from Facebook Donations to Amazon Smile”. Rogers found that the most common fundraising platform these groups used was Charity Navigator’s “Giving Basket” function.
Some former DoJ prosecutors also voice strong concerns that numerous extremist groups have been able to garner tax exempt status from the IRS for years, and said that under Donald Trump’s administration the IRS was especially lax.
“Many of the enforcement mechanisms of the IRS have been actively dismantled or simply allowed to wither,” said Phillip Halpern, who stepped down last fall as a federal prosecutor after 36 years handling corruption cases in California.
“This has created a dangerous gap in our law enforcement safety network where extremist groups can find shelter,” Halpern added. The IRS “which has been largely sidelined due to political interference – will have to play catch-up in any fight against domestic terrorism.”
Notwithstanding their fundraising success, experts stress that in recent months and following the Capitol attack, extremists have scrambled to adjust their fundraising given the accelerating investigations.
When a clandestine group or individual “is operating under duress they tend to change their strategies”, including fundraising tactics, Squire said in an interview. “They’re facing greater scrutiny from both law enforcement and social media platforms.”
Squire noted that some extremist groups such as the neo-Nazi Daily Stormer website has recently moved from seeking bitcoin donations to requesting Monero, a cryptocurrency that is extremely hard to trace.
Historically, the growth of extremist activity has been well documented: the
SPLC in 2019 reported that the number of avowed white supremacist groups doubled from 2017 to 2019.
Pressures to curb extremist financing are likely to grow as the FBI and DoJ have cast a wide net: on top of the 300-plus individuals from at least 42 states charged thus far for their roles in the Capitol attack, DoJ officials have opened files on some 540 people overall according to CBS news.
The FBI director, Chris Wray, told a Senate committee last week that the FBI viewed the 6 January Capitol attack as “domestic terrorism” and that white supremacists make up the “biggest chunk”.
The attorney general nominee Merrick Garland pledged at his confirmation hearings to do “everything in the power of the justice department” to stop domestic terrorism, a project that is likely to involve investigating how extremist groups are bankrolled, say former DoJ prosecutors.
Paul Pelletier, a former acting chief of the DoJ fraud section, suggested in an interview that new legislation will be needed to mount a serious attack on domestic terrorists.
“Curbing the money flows that are used to support domestic terrorism by these extremist groups will require legislation banning material support similar to the laws used with respect to foreign terrorist organizations.”