FBK lawyer Lyubov Sobol and ex-head of the FBK Moscow headquarters Oleg Stepanov are one of the few representatives of the non-systemic opposition who publicly announced their participation in the elections to the State Duma in September 2021.
The first, back in December 2019, the director of the fund, Ivan Zhdanov, announced his desire to be elected to parliament.
But since then, he has not reminded the public of his initiative, has not presented a website or election program.
In March 2020, Lyubov Sobol announced her intention to run.
A year later, in April 2021, Oleg Stepanov gathered in the Duma.
Both have already prepared their election programs and announced fundraising - both in traditional ways and through cryptocurrency.
Selected course
Sobol donations are accepted in three digital currencies: Bitcoin (BTC), Litecoin (LTC) and Ethereum (ETH).
Judging by the dates of the first transactions, she started the crypto wallets back in April 2019, when she ran for the Moscow City Duma.
Over the entire existence of accounts, they received 0.542 BTC, 2.54 ETH and 4.659 LTC.
Thus, in all three currencies, Sobol donated 1.93 million rubles (in terms of the exchange rate as of June 10, 2021).
However, in fact, Sable received more.
In May 2021, the rates of major cryptocurrencies sank by 20-30%.
All crypto-coins received before May in rubles were more expensive.
Stepanov managed to collect much less, but he also opened the wallet later.
So, his bitcoin account was replenished by only 0.013 BTC, which on June 10 was a little more than 34 thousand rubles.
Oleg Stepanov
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© Press Service of the Tver Court
Stepanov also accepts donations in Monero (XMR), which, unlike most digital currencies, uses enhanced anonymization methods.
Among them is the principle of "mixing" coins between random, unrelated users.
To view the movement of money in the XMR network, you need to know the ID of each transaction, which only the recipient and the sender have.
Therefore, it is impossible to see the amount of receipts to Stepanov's account in this currency.
The European Union Police Service (Europol) acknowledged in December 2019 that Monero transactions are completely anonymous and virtually untraceable.
Bitcoin is another matter.
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© Vladimir Astapkovich
“Whatever happens on the Bitcoin network can be viewed, and that's why we were able to move far enough in this direction.
But we are at an impasse with the Monero blockchain, ”said Zherek Jakubcek, strategic analyst at Europol.
Jakubcek added that XMR's anonymity makes this coin especially convenient for criminals involved in international money laundering.
And American analysts directly recommended not to use Monero to finance election campaigns because of its opacity.
Judging by the blockchain analyzer Blockchair.com, funds are withdrawn from Sobol's account immediately or the next day after the next receipt.
This is a good way to protect yourself from exchange rate volatility.
If you keep a cryptocurrency on your account for a long time, you can go bankrupt.
As RT wrote, the Meduza edition saved up cryptocurrency assets and, as a result, lost 2.7 million rubles on the difference in exchange rates.
And, for example, bitcoins are withdrawn from a cryptocurrency account associated with the FBK Navalny, as RT tracked, once a month.
As of June 10, 2021, almost all Sobol wallets were empty, only 0.19 ETH remained on the Ethereum account (33 thousand rubles at the rate of June 10).
According to Blockchair, money has not yet been withdrawn from Stepanov's accounts.
Bypassing the law
Cryptocurrency in Russia is regulated by the federal law "On digital financial assets, digital currency", which is in effect from January 1, 2021.
He prohibits paying with it for real goods and services, but allows you to purchase and buy it, for example, on the stock exchange.
And also use it as a type of savings and investment.
However, the law does not say anything about the use of cryptocurrency to finance election campaigns.
According to the federal law "On Basic Guarantees of Electoral Rights" (Clause 11, Article 58), each candidate is obliged to open a special account with Sberbank to receive donations and form an electoral fund only from this account.
At the same time, the law prohibits foreign states, organizations, citizens, as well as foreign agents from donating to candidates (clause 6 of article 58).
“To date, we are not talking about any legislative opportunity to finance a campaign with cryptocurrency,” lawyer Vsevolod Melekhin, who worked as a consultant on election campaigns, explained in an interview with RT.
- Election funds of candidates are formed in rubles, through an account opened in a Russian bank.
Also on russian.rt.com "I went against the general line of the party": a former FBK employee - on charges of stealing data from the site "Freedom to Navalny"
Nevertheless, Sobol and Stepanov inform their supporters that anonymous donations in cryptocurrency will go precisely to the conduct of the election campaign - "for leaflets, cubes, collecting signatures and much more."
Digital laundry
On June 2, 2021, Leonid Volkov issued an appeal in which he advertised cryptocurrency as “the safest and most anonymous way” to finance FBK's activities in the context of its possible recognition as an extremist organization.
Leonid Volkov
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© Evgeny Odinokov
“Times have changed,” Volkov said in a speech posted on YouTube.
“Since the state is pushing us out of the sphere of simple and understandable collection of donations through the usual banking system, it means that we will patiently teach everyone to use cryptocurrencies.”
The retired MVD colonel Alexei Trifonov has no doubts why the opposition candidates need bitcoins.
“They start a bitcoin wallet so that no transactions from abroad can be seen,” Trifonov told RT, who previously headed the department of internal affairs to combat extremism and now runs his own Telegram channel.
- Transactions, of course, can go through Russia, you can blur money.
But in bitcoin, it's all easier to do and avoid unnecessary schemes. "
Outside of legal regulation
Banning foreign financial participation in sovereign elections is a worldwide practice.
Uribe Burcher, Senior Program Officer at the International Institute for Democracy and Electoral Assistance (IDEA) in Sweden, in her study Cryptocurrencies and Political Funding, estimated that 68% of countries around the world prohibit foreign donations to political parties and more than half of the countries ban foreign aid to candidates.
Anonymous donations are banned in 44% of countries around the world.
“Most countries have a negative attitude towards foreign donations and therefore prefer to declare them illegal - in order to prevent external influences and protect the principle of self-determination,” writes Uriber Burcher.
Alexander Ignatov, director of the Russian Public Institute for Electoral Law, explained what risks the cryptocurrency method of collecting donations poses for the candidates themselves.
Also on russian.rt.com 2.7 million rubles were withdrawn from Navalny's FBK-related bitcoin wallet in April
“There are a huge number of restrictions, including on the participation of state-owned companies, foreign companies, foreign citizens, stateless persons,” Ignatov told RT.
- If the candidate has received such a donation, he is obliged to return it.
If he uses such illegal donations in an amount exceeding 5% of the fund's volume, liability is incurred up to the cancellation of the candidate's registration.
And if he uses more than 10%, this is already the basis for canceling the election results if this candidate wins. "
A candidate, according to the expert, can also contribute his own funds: up to half of the electoral fund.
There is a loophole for unscrupulous election participants, he said.
“The procedure for the formation of a candidate's own funds is not fully regulated by the law.
The candidate in the declaration writes that these are his own funds.
And how he collected them remains outside the scope of legal regulation, ”Ignatov explained.
"There are no real mechanisms how to check this at the preliminary stage, when the election campaign has not yet begun."
That is, theoretically, the candidate has the opportunity to present the cryptocurrency received from third parties as his own funds, Ignatov summed up.
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“There are risks that in this way not only foreign, but also other funds that are prohibited for financing campaigns can be transferred,” the expert noted.
However, if it turns out that the candidate was pursuing the goal of circumventing the law, then certain sanctions may follow, Melekhin said.
"If it is established that the money was received from persons who are prohibited from financing election campaigns, and transactions of transfer and cashing of digital currency were aimed at circumventing legislative prohibitions, then such transactions are objectively feigned, contrary to the foundations of law and order, which implies their nullity," the lawyer said ...
He stressed that "the CEC of Russia should pay certain attention to such moments."
Their kryptonites
According to the above-mentioned Burcher study, digital money is used to fund candidates in Europe, South America and the United States.
At the same time, these relations are not regulated by law everywhere.
So, in Sweden in 2014, a candidate received a seat in parliament, to whom only cryptocurrency was donated.
The Icelandic Pirate Party, which successfully competed in local elections in 2018, also accepts cryptocurrencies.
Blockchain technology was used in the Brazilian elections in 2018.
In the United States, digital donations were first accepted in 2014.
But that same year, the US Federal Election Commission (FEC) released clarifications on how candidates should handle such donations and declare cryptocurrency.
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© Vladimir Song
In the US, the transparency of cryptocurrency donations is strictly monitored and candidates are asked for questionable transactions.
Thus, Democrat Brian Ford had to answer questions from supervisory authorities about an anonymous donation from Hong Kong.
And Republican Austin Peterson was forced to return $ 130 thousand donations in bitcoins in order to comply with the limits on the maximum amount of funds raised.
According to the US Center for Public Control, at least 20 candidates in different years received donations in cryptocurrency.
Moreover, three of them did it in states where crypto donations are prohibited.
Some accepted currencies that could not be traced.
Supervised fundraising
RT discovered indirect signs by which one can judge that the FBK leadership adopted the experience of cryptocurrency financing of candidates from American election specialists.
FBK employees regularly contacted representatives of the USA, Great Britain and other countries.
Including during the pre-election campaigns.
For example, the American embassy in 2015 confirmed that before the regional elections in Russia, FBK founder Alexei Navalny met with American diplomats in Kostroma.
In 2010, Navalny attended the World Fellows program at Yale University in the United States, where, according to the Yale leadership, he was taught to "spread democracy."
Alexey Navalny
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© Pavel Bednyakov
From August to December 2018, his colleague, the ex-head of the FBK headquarters network, Leonid Volkov, studied on the same program.
According to Volkov, he purposefully studied the electoral process in the United States.
“My idea was to get a close-up view of the real elections,” Volkov wrote in a blog post.
- To choose some kind of campaign - for example, the election of the governor of Connecticut - <...> and somehow "cling" to this campaign.
<...> To freak out.
See how field work, campaigning, fundraising are organized. "
By September 2015, when Navalny was having lunch at the Dudki cafe in Kostroma with American diplomats, some states had already allowed accepting bitcoins to fund election campaigns and parties for a year.
At the same time, the FEC ordered American candidates to receive personal data from their sponsors - name, address, position and place of work.
And then send the questionnaires to the FEC for the report.
Therefore, it is possible that the leaders of FBK adopted the idea of cryptocurrency financing of candidates from American specialists.
Here are just detailed reports on the donors of virtual funds at the same time, the Russian electoral commission was unlikely to be provided.
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The Anti-Corruption Foundation is included in the register of NPOs performing the functions of a foreign agent, by the decision of the Ministry of Justice of the Russian Federation dated 09.10.2019;
the organization is recognized as extremist, its activities are prohibited on the territory of Russia by the decision of the Moscow City Court of 06/09/2021