Big Tech’s Russia problem

Social media companies are in a standoff with Russia on censorship and there’s no easy solution.

By Shirin Ghaffary  Feb 26, 2022

Russia’s President Vladimir Putin at a meeting with business leaders in Moscow, February 24, 2022

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 Alexei Nikolsky/TASS/via Getty Images

On Friday morning, as Russia continued its unprovoked attacks on Ukraine, its government also launched an assault on Facebook, announcing that it would begin “partially restricting” access to the social media network in Russia, where there are an estimated 70 million users, because Facebook allegedly restricted pro-Russian news sites. Later that day, Facebook pushed back, writing that “Russian authorities ordered us to stop the independent fact-checking and labeling of content” and that the company would continue to support ordinary Russians “using our app to express themselves and organize for action.” On Saturday morning, Twitter also confirmed that its app is being restricted for some people in Russia.

Now Facebook and Twitter find themselves in a predicament that’s become increasingly common for social media networks in certain countries: They’re facing the demands of an authoritarian government that’s pressuring them to censor content it doesn’t like, and to allow propaganda to run unchecked. If they don’t follow the Kremlin’s orders, they risk being booted off of the local internet entirely. In some cases, refusing could put some of their local employees at risk — in the past, the Russian government has threatened to arrest tech employees based in the country when disputing with their employers. These situations threaten to fracture the way people communicate across the world.

There’s no simple solution to such a standoff. For the people living under these governments, losing access to major social media platforms can cut off a key way they communicate and resist their own government and its propaganda. In Russia, for example, residents who oppose the invasion of Ukraine have been using Facebook, Twitter, and other major social media platforms to distribute news about the attacks and to coordinate anti-war actions and protests.

“I think we’re heading toward an inevitable break in the global internet,” said Emerson Brooking, a resident senior fellow at the Atlantic Council think tank who studies social media.

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Social media in the 2000s was developed under a vision of a shared, open, and global internet, which required major tech platforms like Facebook, Twitter, and YouTube to largely follow the political speech rules of whatever countries they operated in. That meant that tech companies — particularly in places outside the US and Europe — sometimes took down politically controversial speech at the behest of government orders.

Last September, Apple and Google deleted a voting app created by supporters of Aleksei A. Navalny, the imprisoned Russian opposition leader, after the Russian government reportedly threatened to arrest the tech giants’ employees if the companies left the app up in their stores.

“In every case, it’s an implicit negotiation between companies and an authoritarian government,” Brooking told Recode.

But sometimes that implicit negotiation can break down, as it did last March when the Kremlin intentionally slowed down Twitter in Russia after warning social media platforms to take down content supporting Navalny after his arrest. We’re seeing these breakdowns happen more often.

A truly open, global internet never existed in China, where all US social media companies are officially banned under its “Great Firewall” that controls what citizens can access online. It no longer fully exists in India, where Twitter and Facebook have taken down content at the demand of Prime Minister Narendra Modi’s government, which began censoring political dissenters with increasing vigor during the pandemic. And now, it may not exist much longer in Russia, at a critical moment in global history.

What happens next in Russia may continue to splinter the open internet.

Why Russian restrictions on social media could stifle the anti-war movement

Some politicians and online speech experts say it’s important for mainstream social media platforms to try to continue operating in Russia, while still moderating blatant misinformation and restricting propaganda pushed by Russian state media. That’s because social media platforms are giving Russians who disagree with the Kremlin a way to make their voices heard, and they’re offering Russians a way to get information that Russia’s state-run media organizations won’t share.

Widely circulated tweets showed Russian protesters chanting against the war this week in Moscow. A popular St. Petersburg rapper canceled his concert and posted an anti-war message to his over 2 million Instagram followers on Thursday. And some children of Russian senior state officials and oligarchs have turned to Instagram to voice their opposition to the invasion.

“It’s always a balance to make sure that Russians who want the real story — or at least the story as we see it — still have access” to social media platforms, European Commission Vice President Margrethe Vestager told Recode on Friday. “But propaganda shouldn’t have a place.”

In the next few days, it’s expected that Russia’s government will continue circulating false and misleading claims to support the ongoing invasion of Ukraine.

Twitter, Google, and Facebook have all said they are increasing their efforts to remove videos that violate their policies. Twitter has temporarily paused its ads and some recommendations in Russia and Ukraine to prevent misinformation from spreading. Facebook announced on Friday it was prohibiting Russian state media from running ads. And YouTube told Recode that it’s evaluating whether new economic sanctions on Russia may impact what content is allowed on the platform. The video platform has faced criticism for allowing advertisers to run ads against Russian-backed state media outlet RT as it livestreams bombings in Ukraine.

It’s unclear if Russia will escalate its partial restrictions in response to Facebook’s continued refusal to stop moderating Russian media, or what exactly it will do to Twitter and YouTube.

Some internet security experts, social media researchers, and activists have advocated for US-based social media companies to cut off Russian state-funded media or state-run accounts, since that could weaken the Russian government’s ability to distribute propaganda.

“During the Cold War, we would never let Pravda publish in the United States,” said Jim Lewis, a cybersecurity expert at the Center for Strategic and International Studies. “Why are we letting the Russians do this?”

But for all the previously mentioned reasons, if tech companies further limit Russian state media and official government accounts, that could risk further retaliation by the Russian government.

All of this underscores how social media is a key battleground for global powers. It should come as no surprise that the Kremlin — which proved itself masterful at interfering with US politics using social media disinformation campaigns during the 2016 elections — is once again trying to manipulate the online public conversation in its favor.

• All sharin

In the Russia-Ukraine conflict, which side is crypto helping? Both.

By Rebecca Heilweil and Emily Stewart

Mar 1, 2022,

A cryptocurrency exchange point in Kyiv, Ukraine, on January 24.

 STR/NurPhoto via Getty Images

In times of crisis, there is no good; there’s only a best course of action, given the circumstances. Is crypto good in the context of Russia’s invasion of Ukraine? Is it bad? Neutral? It’s a hard question to answer.

Cryptocurrency is now a more mainstream part of the global financial system, which means that — for better or for worse — it’s inevitably a part of international conflict, too. This is on full display as Russian forces invade Ukraine. Millions of dollars in crypto have flowed in to support Ukraine’s army and hacktivist groups. Even the Ukrainian government is now soliciting donations in crypto and has already raised more than $15 million. Some Ukrainians are also turning to crypto as an alternative to Ukrainian financial institutions, which are limiting people’s access to bank accounts and foreign currency. In a scenario where governments are in chaos, it’s difficult to rely on traditional banks, and there’s fear of surveillance. So a relatively anonymous system where no government is involved is appealing.

“The fact that it can’t be frozen, the fact that it can’t be censored, and the fact that it can be used without ID is very, very important,” Alex Gladstein, chief strategy officer at the Human Rights Foundation, told Recode. “And they are why bitcoin is such an important humanitarian tool.”

Just how useful an avenue crypto is for people in crisis or organizations in need of donations is up for debate. You need a relatively sophisticated understanding of technology to use crypto, and if you weren’t already set up for it, the onset of a war might not be the moment to try to do it. Plenty of donations to Ukrainian groups are flowing in just fine using more traditional currencies.

“This is not a time for disrupting things. Folks have their lives disrupted already,” said Giulio Coppi, global digital specialist at the Norwegian Refugee Council.

All of the things that make crypto appealing to those under siege apply to those doing the sieging as well. Crypto is often used by bad actors, and could be exploited by Russia to avoid sanctions, which is currently the main weapon being employed by the US and its allies against Russia. Its prevalence in cyberwarfare also means people holding crypto could be a target for cyberattacks, and although one of the main appeals of crypto is that it’s supposed to be anonymous, it isn’t foolproof.

More broadly, cryptocurrencies are quite volatile. While proponents of the crypto space often argue that bitcoin and the like are some sort of “digital gold,” they’ve lost value amid global uncertainty, undercutting the argument that they’re a kind of safe haven. If you imagine a scenario where you take $1,000 out of Ukraine in a cryptocurrency and by the time you’re able to convert it back to cash it’s lost half its value, that’s not ideal. But what if crypto is the easiest way to get money in a crisis? Is it better than nothing at all?

Ukrainians are using crypto — but there are limitations

Right now, at least some Ukrainians escaping the country seem to be taking their crypto with them, which they hope to convert back into fiat currency once they arrive to safety. Others seem to be looking toward crypto as a way to store their wealth as Ukraine’s economy collapses; the country’s central bank has already suspended electronic cash transfers and is blocking Ukrainian citizens from withdrawing foreign currency. Trading on the Ukrainian crypto platform Kuna reached its highest level since May 2021 this past Friday.

“In Ukraine right now, you can download a bitcoin wallet open source — totally unconnected from your ID — and you can generate an address via a QR code or an alphanumeric string,” Gladstein explained. “You can paste that to me, I can send you $1,000, and it goes through in a few minutes.”

Using crypto in the middle of a crisis isn’t necessarily easy. For one thing, you need an internet connection and a working device. You also need to know how to use crypto, which has a steep learning curve and is something people aren’t going to be able to pick up quickly in moments of crisis. There are thousands of cryptocurrencies, and they don’t all work the same way. Crypto also has to be available to buy: Right now, even wealthier Ukrainians are reportedly having trouble buying Tether, a digital currency that’s pegged to the US dollar. And if you’re only converting other assets you own into crypto now, the rest of the financial system needs to be working, too.

“It might work for some people, but they need first to unfreeze their assets, transfer them into digital currency, and then manage to get out [of the country], which is actually the main problem right now,” Coppi said. “And then when they’re out, hope it hasn’t devalued too much.”

That means that for now, crypto might be most helpful to the people who already have it. That could account for millions of people in Ukraine, which has spent the last few years aggressively promoting its own domestic cryptocurrency industry. In February, the country’s parliament passed a law “legalizing” crypto, and Ukraine now ranks fourth in the world in terms of crypto adoption, according to the blockchain research company Chainalysis.

A Ukrainian soldier at an ATM in Mayorske on December 11, 2021.

 Andriy Andriyenko/SOPA Images/LightRocket via Getty Images

As the conflict continues, supporters of Ukraine are sending even more crypto into the country. On social media sites and platforms like Telegram, people — including leaders of the country’s burgeoning crypto sector — are sharing their crypto wallet addresses and soliciting donations. One NGO supporting the Ukrainian military has reportedly raised several million in cryptocurrency, and groups are using crypto to buy a motley collection of military equipment, medical supplies, and even a facial recognition app. Some of these fundraising efforts have been active for months, but picked up steam last week.

To be sure, if you’re looking to send crypto to help in Ukraine, it’s important to check if the people on the receiving end want it and are equipped to handle it. Notably, neither the Ukrainian Ministry of Defense nor the National Bank of Ukraine appear to be accepting cryptocurrency donations right now, though the government of Ukraine is, according to its verified Twitter account. Given crypto’s volatility, it’s also worth remembering that the amount of the donation in crypto isn’t set in stone and could drop fast.

“If they don’t ask you for it, don’t send it,” Coppi said.

Russia can also take advantage of crypto

The heroic version of crypto in crisis — one that paints it as an alternative for people in dire situations — obfuscates the darker side of the space. It’s a very pertinent side, in particular, with regard to Russia.

Even before Russia’s invasion of Ukraine, the United States government was worried that cryptocurrencies could dull the impact of economic sanctions. Iran has used bitcoin mining to bypass trade embargoes, according to research from the blockchain analytics firm Elliptic.

Multiple countries have begun to hit Russia with heavy sanctions. In some corners, that’s caused concern that Russia could use crypto to circumvent sanctions and move money undetected. As the New York Times outlines, the Russian government has been developing a digital ruble, and Russia has been building tools to help hide the origins of digital transactions. Basically, if sanctions are meant to keep countries and businesses from dealing with Russia, crypto would be a way to get around them. Michael Parker, a former federal prosecutor, told the Times it would be “naive” to think Russia hadn’t gamed out a scenario where sanctions were imposed and it would have to find alternatives.

People walk past a currency exchange office in central Moscow on February 24.

 Alexander Nemenov/AFP via Getty Images

To avoid this scenario, Mykhailo Fedorov, Ukraine’s vice prime minister and minister of digital transformation, has called for crypto and blockchain platforms to block the addresses of Russian users. The Biden administration is also weighing how it might sanction Russian cryptocurrency assets, and has already urged crypto exchanges to ensure that specific, sanctioned individuals and organizations from Russia aren’t using their platforms.

While cutting off Russia’s access to crypto could have real repercussions for the country — crypto has become increasingly popular in Russia, which is also the world’s third-largest bitcoin miner — it may not be possible. Not all exchanges confirm the identity of their customers, and it’s generally difficult to track the origin of cryptocurrency transactions. Whether a cryptocurrency exchange legally has to comply with sanctions may depend on where they’re registered and where they operate. Many exchanges have rebuffed calls for them to freeze Russian accounts.

Crypto can also be used to fundraise for bad actors. Just as pro-Ukrainian groups have been able to get funding via crypto, so have pro-Russian separatist groups in Ukraine, including in 2014, when Russia invaded and annexed the Crimean Peninsula, said Jess Symington, the head of research at Elliptic. “The pro-Russian groups were particularly active around the 2014 conflict,” she said.

Russia has heavy ties to crypto-linked cybercrimes and illegal activity such as money laundering and ransomware. According to one analysis from Chainalysis, three-quarters of the money made through ransomware attacks last year went to hackers linked to Russia. In January, the Ukrainian government was targeted by a series of cyberattacks that disguised themselves as ransomware that demanded bitcoin, before destroying data on government computers.

“Capital flight by economically distressed Ukrainians, or even Russians, is a very different thing than the Russian state attempting to launder money or evade sanctions,” said Alex Zerden, a former Treasury Department official under the Obama and Trump administrations.

Coppi, from the Norwegian Refugee Council, warned that people putting their money in crypto may become unsuspecting victims in cyberwarfare, and not only in the Russia-Ukraine conflict. “Most conflicts are going to be more and more about cyberwarfare,” he said. “You risk becoming a target.”

That being said, it’s not as though other currencies can’t be used for unsavory activities. “US dollars are used for a lot of really great economic activities,” Zerden said. “It’s also used to buy drugs and weapons and, you know, engage in human trafficking, right?”

Bitcoin maybe isn’t digital gold

One of the big arguments that crypto proponents have long made is that cryptocurrencies have the potential to act as “digital gold.” That means that, unlike fiat currencies, bitcoin can’t be diluted because there’s only going to ever be a set number of bitcoin, and that investing in cryptocurrencies is a way to diversify your portfolio in the face of volatility. Theoretically, that’s supposed to mean that bitcoin is a way to hedge against inflation, or that if the stock market crashes, bitcoin won’t. This theory hasn’t entirely proven to be true. Crypto has shown itself to be super volatile, and it often moves with stocks. The current conflict has highlighted crypto’s volatility.

Bitcoin fell when Russia invaded Ukraine, as did the S&P 500 — it didn’t act differently from major US stocks. And as the S&P 500 rebounded later in the week, so did bitcoin.

“That’s removing the perception that people had that cryptocurrencies could be used as a hedging asset against these kinds of macroeconomic conditions,” said Hugh Harsono, a digital currency researcher.

Still, cryptocurrency advocates say bitcoin can be better than the alternatives — like cash, bank accounts, or other physical assets, like gold or real estate — because it’s beyond the control of any one institution and easily transportable. And while crypto may be volatile, it can be less volatile than some countries’ fiat currencies or markets. Earlier this year, the Turkish lira became more volatile than bitcoin, which prompted some people in Turkey to cash in their fiat currency for bitcoin and Tether.

“You’re worried that bitcoin went down 10 percent today or whatever,” Gladstein, from the Human Rights Foundation, said. “What are your other options for Ukrainians? What are they going to do? Put it in the Ukrainian stock market? Are they going to put it in a house? Are they going to bring the house with them?”

Crypto is a part of war now, like it or not

This isn’t the first time people have turned to crypto amid an international conflict, but it does feel like the first time crypto is front and center, so much so that some have even called Russia’s invasion of Ukraine “the world’s first crypto war.”

This is largely thanks to crypto proponents who have rallied in support of Ukraine and tried to find a role for crypto. The cryptocurrency exchange FTX, for instance, has given the equivalent of $25 to every Ukrainian user on its platform to use as they please, according to its CEO Sam Bankman-Fried. One of the co-founders of the Russian protest band Pussy Riot, ​​Nadya Tolokonnikova, has organized a fundraising effort to sell 10,000 NFTs of the Ukrainian flag. Vitalik Buterin, the Russian-born founder of ethereum, has encouraged people to donate to humanitarian efforts in the country with crypto.

Of course, some of crypto boosters’ efforts to inject the digital assets into a war effort have been a little cringeworthy. It doesn’t really help for a bored ape NFT person to express solidarity with Ukraine. Given the scamminess of parts of the space, it’s also hard to know which projects are actually going to help people in Ukraine and which ones are just money grabs by opportunists.

For now, we don’t know how crypto will shape international conflict, or whether it will ultimately help or hurt. People fleeing war zones might find a unique use for crypto, but they’ll need to figure out how to use it first. There are already plenty of other ways to raise and move money that don’t involve digital currencies. And while crypto may make it easier to sidestep sanctions, countries were evading sanctions long before bitcoin arrived.

What we do know is that bitcoin and other cryptocurrencies are now a real factor in global economies and in conflicts. Whether it’s good or bad in wartime, crypto is doing what its proponents say it does — giving people a way to work outside of traditional financial institutions — and there’s no sign that will change anytime soon.