Earlier this year, the U.S. Trump administration finally began taking a serious look at cybersecurity. Now unable to deny the more-than-likely existence of Russian state-sponsored hackers, they issued sanctions against Moscow, blaming them for interfering in the 2016 election.

That electoral mega-hack has single-handedly done more to undermine faith in democracy than any other event in recent history.  It was carried out purely in the digital realm, enabled by savvy, high-tech soldiers leveraging their prowess in hacking and manipulating data. You could say that 2016 was the year data killed democracy.

But it actually goes deeper than that.

 

We Should Have Seen it Coming

The Russian weaponization of fintech, the state-sponsored hacking armies, the undermining of liberal democracies… we should have seen it coming. Put any student of Russian politics in a room with a student of cybercrime and a banking history expert and you’d have come up with a spot-on prediction of the events that played out in 2016.

We should have seen it coming and even now, many don’t see it for what it is. The Russians are the best hackers in the world and they’re using their talent to undermine the very principles of Western society: liberal democracy, faith in government, and faith in the power of the individual to rise above oppression.

It sounds extreme to say data has killed democracy but it’s not. If you’re unsure about the severity of cyber warfare and the importance of federal-level cybersecurity measures, maybe this will help.

 

Why the Russians Keep Winning at Cyber Warfare

Why does it seem the Russians are so much more adept at cyber warfare than the rest of the world? There are two possible explanations. One has to do with technology and the other has to do with history. First, there’s the perfect timing of the rise in technology at a point in Russian history when it made the greatest impact. Then there’s the Russian president himself, Vladimir Putin. We’ll start with the tech side: namely the rise of fintech.

 

The Rise of Fintech, at a Perfect Point in Russian History

To understand the perfect harmony that exists between fintech and Russian anti-democracy movement, you have to go all the way back to the Soviet era. Compare the Soviet banking system to that of Europe and North America: unlike in the West, plastic was unheard of. Credit, easy access to banking services, and transferring money easily between private individuals were unimaginable to Soviet citizens.

Even after the breakup of the Soviet Union, banking was a dismal prospect for the average citizen. Queueing up for hours was the standard protocol for any type of financial transaction, even at a time when the economy and markets in new Russia were expanding at an incredible pace.

So imagine the attraction of mobile banking. When the electronic transfer of funds became possible around the turn of the century, Russians fled the archaic, traditional banking system and signed on to fintech startups like Web.Money, and Yandex. These companies soon became the method of choice for e-commerce, exchanging money between individuals, and any other use people could find for these non-regulated fintech platforms.

So, at a time when Europeans and North Americans were merely gradually drifting toward electronic payment systems (EPS) and fintech platforms offering alternative money systems, Russians were already there, using them in full force. Then, when Bitcoin came on the scene, Russians were more than ready. Ransomware payments could be “anonymous”!

Given the nefarious tendencies of the Putin regime to undermine democracy, it was only natural that Russia would harness its fintech advantage against democracy. That brings us to the second reason Russia is so amazingly good at cyber warfare: Putin.

 

Anti-Democracy Warfare is Nothing New for Russia

So Russians, it turns out, are old hands at leveraging fintech for anything and everything. They’ve been at it longer than we have. They’ve been cultivating hackers longer than we have. They’re more than comfortable with Bitcoin.

They also have another advantage: the Russian government has long waged an information war against democracy and still does. Tapping into cyber talent is merely the equivalent of a new tool at their disposal.

Since well before the Cold War days, they’ve used all sorts of techniques to confuse citizens of liberal democracies. Back in the 1920s, Lenin sent secret agents over to the U.S. to carry out, essentially, the same agenda that today’s election hackers had in mind: undermining democracy.

Make no mistake: Putin and his government have never stopped trying to undermine the principles of democracy. Putin is a product of the old-school, Soviet-era regime, where he was the poster boy of their secret service agency, the KGB. He also served as director of domestic intelligence. When he became president, his mission was to “Make Russia Great Again”. And in his view, that must come at the expense of liberal democracy. He sees the formation of Western alliances like NATO as a threat to Russia. For Russia to rise, the West must fall. There is no win-win situation.

The Internet-fueled Arab Spring in 2011 was a wake-up call to Putin, that democracy could quickly gain strength in contested areas via social media. You can believe that this moment in time served as a catalyst for upping the stakes in the long-standing war against democracy. Aligning with cyber experts was critical, and if some of those alliances were unofficial, so be it.

That’s why Putin’s cyber reach and influence extend beyond official Russian government agencies. Consider the “Internet Research Agency”, a Russian organization against which Trump’s sanctions are meant to work. This entity, too, worked to undermine the election, along with armies of individual “trolls”, who are also currently feeling the sting of U.S. sanctions (we hope). None of these entities are official Russian government contractors or employees.

So yes, Russia is deeply troubled by the health of democracy and yes, they’ll do anything to break it down. Don’t forget the devastating cyber attack against Ukraine, a country that’s struggled to break free from the gravitational pull of the old Soviet sphere of influence. Their move toward alignment with the Western world has all but been crushed by Russia’s cyber warfare against them. Other former-Soviet countries have felt the same cyber sting of Russia’s war against democracy.

As you can see, the hacking of the U.S. Democratic National Committee in the 2016 election was only the most recent and newsworthy example of Russia’s century-long campaign against democracy.  In this example, the Russian government, via hackers and armies of fake news propaganda writers, was able to distract millions of voters with nonsense. They confused the issues and altered the way people voted. The outcome of the election may or may not have been the point. We know the real point was to cause U.S. voters to question the value of a liberal democracy. Or at least to question the electoral process and the integrity of the government.

With skilled hackers and a healthy fintech sector, the old Soviet propaganda campaign has simply gone digital. The culmination was 2016, the year data killed democracy.

Conclusion

 

So it may very well be the year Data killed Democracy but started long ago. With a Russian government still mired in a Soviet-era mentality and a Russian population well-versed in fintech and how to manipulate the unwary citizens of Democracy in Europe and North America, it’s more like ‘The Decade When Data Killed Democracy’. But as governments of the rest of the world catch up with fintech security and learn to take cyber warfare seriously, we don’t have to let the principles of democracy die on the vine.

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