Eric ZUESSE | 23.09.2018 | Strategic Culture

[dropcap]D[/dropcap]espite Barack Obama’s economic sanctions against Russia, and the plunge in oil prices that King Saud agreed to with Obama’s Secretary of State John Kerry on 11 September 2014, the economic damages that the US and Sauds have aimed against a particular oil-and-gas giant, Russia, have hit mostly elsewhere — at least till now.

This has been happening while simultaneously Obama’s violent February 2014 coup overthrowing Ukraine’s democratically elected pro-Russian President Viktor Yanukovych (and the head of the 'private CIA' firm Stratfor calls it “the most blatant coup in history”) has caused Ukraine’s economy to plunge even further than Russia's, and corruption in Ukraine to soar even higher than it was before America’s overthrow of that country's final freely elected nationwide government, so that Ukraine’s economy has actually been harmed far more than Russia’s was by Obama’s coup in Ukraine and Obama’s subsequent economic sanctions against Russia (sanctions that are based on clear and demonstrable Obama lies but that continue and even get worse under Trump).

Bloomberg News headlined on February 4th of 2016, “These Are the World's Most Miserable Economies” and reported the “misery index” rankings of 63 national economies as projected in 2016 and 60 as actual in 2015 — a standard ranking-system that calculates “misery” as being the sum of the unemployment-rate and the inflation-rate. They also compared the 2016 projected rankings to the 2015 actual rankings.

Top rank, #1 both years — the most miserable economy in the world during 2015 and 2016 — was Venezuela, because of that country’s 95% dependence upon oil-export earnings (which crashed when oil-prices plunged). The US-Saudi agreement to flood the global oil market destroyed Venezuela’s economy.

#2 most-miserable in 2015 was Ukraine, at 57.8. But Ukraine started bouncing back so that as projected in 2016 it ranked #5, at 26.3. Russia in 2015 was #7 most-miserable in 2015, at 21.1, but bounced back so that as projected in 2016 it became #14 at 14.5.

Bloomberg hadn’t reported misery-index rankings for 2014 showing economic performances during 2013, but economist Steve H. Hanke of Johns Hopkins University did, in his “Measuring Misery Around the World, May 2014,” in the May 2014 GlobeAsia, ranking 90 countries; and, during 2013 (Yanukovych’s final year as Ukraine’s President before his being forced out by Obama’s coup), Ukraine’s rank was #23 and its misery-index was 24.4. Russia’s was #36 and its misery index was 19.9. So: those can be considered to be the baseline-figures, from which any subsequent economic progress or decline (after Obama’s 2014 Ukrainian coup) may reasonably be calculated. Hanke’s figures during the following year, 2014, were reported by him at Huffington Post, "The World Misery Index: 108 Countries", and by UAE’s Khaleej Times, “List of Most Miserable Countries” (the latter falsely attributing that ranking to Cato Institute, which had merely republished Hanke’s article). In 2014, Ukraine’s misery-index, as calculated by Hanke, was #4, at 51.8. That year had 8 countries above 40 in Hanke’s ranking. Russia was #42 at 21.42. So: Russia’s rank had improved, but, because of the globally bad economy, Russia’s absolute number was slightly worse (higher) than it had been before Obama’s coup in Ukraine and subsequent sanctions against Russia. By contrast, Ukraine’s rank had suddenly gotten far worse, #4 at 51.80 in 2014, after having been #23 at 24.4 in 2013.

The figures in Bloomberg for Russia were: during 2015, #7 with a misery-index of 21.1; and projected during 2016, #14 with a misery-index of 14.5; so, Bloomberg too showed a 2015-2016 improvement for Russia, and not only for Ukraine (where in the 2016 projection it ranked #5, at 26.3, a sharp improvement after the horrendous 2015 actual numbers).

“Hanke’s Annual Misery Index — 2017” in Forbes, showed 98 countries, and Venezuela was still #1, the worst; Ukraine was now #9 at 36.9; and Russia was #36 at 18.1.

Thus: whereas Russia was economically sunningly stable at #36 from start to finish throughout the entire five-year period 2013-2017, starting with a misery-index of 19.9 in 2013 and ending with 18.1 in 2017, Ukraine went from a misery-index of 24.4 in 2013 to 36.9 in 2017 — and worsening its rank from #23 to #9. During that five-year period Ukraine’s figure peaked in the year of Obama’s coup at 57.8. So, at least Ukraine’s misery seems to be heading back downward in the coup’s aftermath, though it’s still considerably worse than before the coup. But, meanwhile, Russia went from 19.9 to 18.1 — and had no year that was as bad as Ukraine’s best year was during that period of time. And, yet: that coup and the economic sanctions and the US-Saudi oil-agreement were targeted against Russia — not against Ukraine.

If the US were trying to punish the people of Ukraine, then the US coup in Ukraine would have been a raving success; but actually Obama didn’t care at all about Ukrainians. He cared about the owners of America’s weapons-making firms and of America’s extractive firms. Trump likewise.

During that same period (also using Hanke’s numbers) the United States went from #71 at 11.0 in 2013, to #69 at 8.2 in 2017. US was stable.

Saudi Arabia started with #40 18.9 during 2013, to #30 at 20.2 in 2017. That’s improvement, because the Kingdom outperformed the global economy.

During the interim, and even in the years leading up to 2014, Russia had been (and still is) refocusing its economy away from Russia’s natural resources and toward a broad sector of high technology: military R&D and production.

On 15 December 2014, the Stockholm International Peace Research Institute headlined, “Sales by Largest Arms Companies Fell Again in 2013, but Russian Firms’ Sales Continued Rising,” and reported, "Sales by companies headquartered in the United States and Canada have continued to moderately decrease, while sales by Russian-based companies increased by 20 per cent in 2013.”

The following year, SIPRI bannered, on 14 December 2015, “Global Arms Industry: West Still Dominant Despite Decline,” and reported that, “Despite difficult national economic conditions, the Russian arms industry’s sales continued to rise in 2014. … ‘Russian companies are riding the wave of increasing national military spending and exports. There are now 11 Russian companies in the Top 100 and their combined revenue growth over 2013–14 was 48.4 per cent,’ says SIPRI Senior Researcher Siemon Wezeman. In contrast, arms sales of Ukrainian companies have substantially declined. … US companies’ arms sales decreased by 4.1 per cent between 2013 and 2014, which is similar to the rate of decline seen in 2012–13. … Western European companies’ arms sales decreased by 7.4 per cent in 2014.”

This is a redirection of the Russian economy that Vladimir Putin was preparing even prior to Obama’s war against Russia. Perhaps it was because of the entire thrust of the US aristocracy's post-Soviet determination to conquer Russia whenever the time would be right for NATO to strike and grab it. Obama’s public ambivalence about Russia never persuaded Putin that the US would finally put the Cold War behind it and end its NATO alliance as Russia had ended its Warsaw Pact back in 1991. Instead, Obama continued to endorse expanding NATO, right up to Russia’s borders (now even into Ukraine) — an extremely hostile act.

By building the world’s most cost-effective designers and producers of weaponry, Russia wouldn’t only be responding to America’s ongoing hostility — or at least responding to the determination of America’s aristocracy to take over Russia, which is the world’s largest trove of natural resources — but would also expand Russia’s export-earnings and international influence by selling to other countries weaponry that’s less-burdened with the costs of sheer corruption than are the armaments that are being produced in what is perhaps the world’s most corrupt military-industrial complex: America’s. Whereas Putin has tolerated corruption in other areas of Russia’s economic production (figuring that those areas are less crucial for Russia’s future), he has rigorously excluded it in the R&D and production and sales of weaponry. Ever since he first came into office in 2000, he has transformed post-Soviet Russia from being an unlimitedly corrupt satellite of the United States under Boris Yeltsin, to becoming truly an independent nation; and this infuriates America’s aristocrats (who gushed over Yeltsin).

The Russian government-monopoly marketing company for Russia’s weapons-manufacturers, Rosoboronexport, presents itself to nations around the world by saying: “Today, armaments and military equipment bearing the Made in Russia label protect independence, sovereignty and territorial integrity of dozens of countries. Owing to their efficiency and reliability, Russian defense products enjoy strong demand on the global market and maintain our nation’s leading positions among the world’s arms exporters. For the past several years, Russia has consistently ranked second behind the United States as regards arms exports.” That's second-and-rising, as opposed to America’s first-and-falling.

The American aristocracy’s ever-growing war against Russia posed and poses to Putin two simultaneous challenges: both to reorient away from Russia’s natural resources, which the global aristocracy wants to grab, and also to reorient toward the area of hi-tech in which the Soviets had built a basis from which Russia could become truly cost-effective in international commerce, so as to, simultaneously, increase Russia’s defensive capability against an expanding NATO, while also replacing some of Russia’s dependence upon the natural resources that the West’s aristocrats want to steal.

In other words: Putin designed a plan to meet two challenges simultaneously — military and economic. His primary aim is to protect Russia from being grabbed by the American and Saudi aristocrats, via America’s NATO and the Sauds’ Gulf Cooperation Council and other alliances (which are trying to take over Russia’s ally Syria — Syria being a crucial location for pipelining Arab royals’ oil-and-gas into Europe, the world’s largest energy-market).

In addition, the hit to Russia’s economic growth-rate from the dual-onslaught of Obama’s sanctions and the plunging oil prices hasn’t been too bad. The World Bank’s April 2015 “Russia Economic Report" predicted: “Growth prospects for 2015-2016 are negative. It is likely that when the full effects of the two shocks become evident in 2015, they will push the Russian economy into recession. The World Bank baseline scenario sees a contraction of 3.8 percent in 2015 and a modest decline of 0.3 percent in 2016. The growth spectrum presented has two alternative scenarios that largely reflect differences in how oil prices are expected to affect the main macro variables.”

The current (as of 15 February 2016) “Russia GDP Annual Growth Rate” at Trading Economics says: “The Russian economy shrank 3.8 percent year-on-year in the fourth quarter of 2015, following a 4.1 percent contraction in the previous period, according to preliminary estimates from the Economic Development Minister Alexey Ulyukayev. It is the worst performance since 2009 [George W. Bush’s global economic crash], as Western sanctions and lower oil prices hurt external trade and public revenues.” The current percentage as of today, 17 September 2018, is 1.9%, after having plunged down from 2.2% in late 2017, to 0.9% in late 2017; so, it is rebounding.

The World Bank’s April 2015 “Russia Economic Report" went on to describe “The Government Anti-Crisis Plan”:

On January 27, 2014, the government adopted an anti-crisis plan with the goal to ensure sustainable economic development and social stability in an unfavorable global economic and political environment.

It announced that in 2015–2016 it will take steps to advance structural changes in the Russian economy, provide support to systemic entities and the labor market, lower inflation, and help vulnerable households adjust to price increases. To achieve the objectives of positive growth and sustainable medium-term macroeconomic development the following measures are planned:

• Provide support for import substitution and non-mineral exports;

• Support small and medium enterprises by lowering financing and administrative costs;

• Create opportunities for raising financial resources at reasonable cost in key economic sectors;

• Compensate vulnerable households (e.g., pensioners) for the costs of inflation;

• Cushion the impact on the labor market (e.g. provide training and increase public works);

• Optimize budget expenditures; and

• Enhance banking sector stability and create a mechanism for reorganizing systemic companies.

So: Russia’s anti-crisis plan was drawn up and announced on 27 January 2014, already before Yanukovych was overthrown, even before Obama’s agent Victoria Nuland on 4 February 2014 instructed the US Ambassador in Ukraine whom to have appointed to run the government when the coup would be completed (“Yats,” who did get appointed). Perhaps, in drawing up this plan, Putin was responding to scenes from Ukraine like this. He could see that what was happening in Ukraine was an operation financed by the US CIA. He could recognize what Obama had in mind for Russia.

The “Russia Economic Report, May 2018: Modest Growth Ahead” says:

Global growth continued its 2017 momentum in early 2018. Global growth reached a stronger than- expected 3 percent in 2017 — a notable recovery from a post-crisis low of 2.4 percent in 2016. It is currently expected to peak at 3.1 percent in 2018. Recoveries in investment, manufacturing, and trade continue as commodity-exporting developing economies benefit from firming commodity prices (Figure 1a). The improvement reflects a broad-based recovery in advanced economies, robust growth in commodity-importing Emerging Markets and Developing Economies (EMDEs), and an ongoing rebound in commodity exporters. Growth in China – and important trading partner for Russia – is expected to continue its gradual slowdown in 2018 following a stronger than-expected 6.9 percent in 2017.

Putin’s economic plan has softened the economic blow upon the masses, even while it has re-oriented the economy toward what would be the future growth-areas.

The country that Putin in 2000 had taken over and inherited from the drunkard Yeltsin (so beloved by Western aristocrats because he permitted them to skim off so much from it) was a wreck even worse than it had been when the Soviet Union ended. Putin immediately set to work to turn it around, in a way that could meet those two demands.

Apparently, Putin has been succeeding — now even despite what the US aristocracy (and its allied aristocracies in Europe and Arabia) have been throwing to weaken Russia. And the Russian people know it.

PS: The present reporter is an American, and used to be a Democrat, not inclined to condemn Democratic politicians, but Obama’s grab for Russia was not merely exceedingly dangerous for the entire world, it is profoundly unjust, it is also based on his (and most Republicans’) neoconservative lies, and so I don’t support it, and I no longer support Obama or his and the Clintons’ Democratic Party, at all. But this certainly doesn’t mean that I support the Republican Party, which is typically even worse on this (and other matters) than Democratic politicians are. On almost all issues, I support Bernie Sanders, but I am not a part of anyone’s political campaign, in any way.

Total public funding of elections...or bust!

[dropcap]A[/dropcap]nd we suckers walk! Anyone who even occasionally checks current events knows how much money is spent on presidential elections. Each new cycle breaks the previous record, and on and on. Well, the ' buck ' ( no pun intended) doesn't stop there. The total cost of running for A) President, B) Senator and C) House Representative in the 2016 cycle reached $6.5 Billion! How many roads and bridges could have been fixed and renovated for that money? Let's look at the Congressional winners in previous election cycles: In 2008 the winners of House seats spent on average $ 1.1 million. The winners of Senate seats spent on average $ 6.5 million. Moving on to the 2012 cycle and the numbers jumped to $ 1.6 million and $ 10.4 million respectively. Now this was candidates running as either Republican or Democrat... not 3rd Party. Do you think a 3rd Party candidate would ever have a chance? I still have that bridge in Brooklyn for sale if you think so.

Things are so regressed that all the news talk shows always refer to election races, mostly close ones in the polls, to how much money each candidate has raised... hardly ever about issues. Of course, on the always forgotten issues of military spending and foreign policy, the Two Party/One Party duopoly agree more than not. When a libertarian or true progressive candidate are the only folks speaking of that horror... no one can hear them! Why? They are hardly on the boob tube, in person or through campaign ads. No money! Boy, the Fat Cats who run this empire have it down to a science: Keep the duopoly powerful and never give the suckers an even break, as in the 2008 election regarding health care. You see, Obama sounded sincere about wanting Medicare for All and a ' Public Option ' giving we suckers under 65 a chance to have what senior citizens have ( by paying in of course, but less than the private insurer way). Those of us who looked beyond the hype and spin knew that his opponent McCain received around $ 7 + million from the health care industries, while Mr. Hope and Change got.... over $ 21 million! And what we suckers got was ObamaCare, which was another way of saying that the private insurance industry got tens of millions of new customers, with high deductibles and co pays.

Bottom line: The only hope for this Republic to become what they say we already are, but are not, a democracy, is to have Total public funding of ALL elections. I don't care if it is for dogcatcher, NO private money in elections! Period! Oh, they say we cannot do that due to the 1976 Supreme Court ruling in Buckley vs. Valeo. The court ruled against laws that restricted private money in elections, citing that ' Money is free speech' . Really? Maybe they should have stated it as it is: The super rich have lots of free speech. Well, as former Senator Bill Bradley once said: " We have many amendments to the Constitution, why not one more?" Folks, sit back and watch another election cycle go by and see how big money runs the show. If working stiffs out there, regardless of labeling themselves as conservative or progressive, stop supporting this decayed electoral system....

By Patrick Martin, wsws.org

Pelosi and fellow hypocrites. Constant deception and lesser evilism keep the masses—especially affluent liberals— in the Dems corral.

[dropcap]T[/dropcap]wo major polls made public Sunday project a sizeable Democratic Party victory in the US midterm elections set for November 6. A Fox News poll found a seven-point Democratic Party lead in the generic congressional ballot, while an NBC-Wall Street Journal poll found a 12-point Democratic lead among registered voters, and an eight-point lead among likely voters. Both polls found that opposition to President Trump is the driving force in the election, with particular hostility to his persecution of immigrants and his tax cuts for corporations and the wealthy.

The likely swing to the Democrats comes as the two-party system as a whole faces mounting popular opposition. According to another recent poll, nearly two-thirds of voters want an alternative to the two existing parties, whose candidates are reviled as corrupt representatives of the rich who lie shamelessly and have nothing but contempt for ordinary working people. Other polls show a rising interest in and support for socialism, particularly among young people.

The Democratic Party is now expected to make the gain of 23 seats needed to win control of the House of Representatives, and perhaps much more than that, while a Democratic takeover of the US Senate, previously thought unlikely because only nine Republican-held seats were up for election, is now considered a significant possibility. The Democrats are also projected to win a large number of Republican-held governorships, including nearly every state in the industrial Midwest. What would such a political shift mean?

While working people are looking for an alternative to the reactionary policies of the Trump administration, they will not find it in the Democratic Party, a political alliance of Wall Street, the military-intelligence apparatus, and privileged sections of the upper middle class. Congressional Democratic leaders have chosen to focus their efforts first on promoting the Russia investigation, based on bogus claims of massive Russian intervention in the 2016 elections. More recently, they sought to link Republican candidates to the Supreme Court nomination of reactionary jurist Brett Kavanaugh, who is under attack due to allegations of sexual misconduct in high school, invoking the themes of the #MeToo campaign.

Neither campaign has evoked any popular enthusiasm. Only 38 percent in Sunday’s polls said that it was important that a congressional candidate share their views on the nomination of Brett Kavanaugh to the Supreme Court. An even lower number, 34 percent, said that a candidate should share their views on the Russia investigation. Large majorities said that healthcare and the economy—issues of class, not race or gender—were the most important. 

With only two exceptions, the CIA Democrats are not drawn from among the rank-and-file soldiers who comprised the bulk of those sent as cannon fodder to the wars in Iraq and Afghanistan, and came back, in many cases, damaged in mind and body, and hostile to the wars in which they fought. Thirteen had roles as intelligence agents, war planners or diplomatic apologists for war. Fifteen were officers in the Army, Navy, Air Force or Marines—commanders, captains, majors, a lieutenant-colonel.

Not a single one is running as an opponent of the wars in which they fought/led, or of new wars against Iran, Russia, or China. One actually demands as part of his program, “an uncompromising victory over Russia and its tyrannical regime.”

While the WSWS has consistently called attention to the CIA Democrats, the corporate-controlled media has been largely silent about the friendly takeover of the Democratic Party by the military-intelligence apparatus. In its lone reference, the New York Times referred last month, in a gross underestimate, to “more than a dozen Democratic candidates this year with strong background in national security through service in the military or at the intelligence agencies.”

In another exception to the media blackout, NBC News noted, under the suggestive headline, “Their New Mission?” that “an unusually large number of former intelligence officers and operatives are campaigning for office as Democrats in this fall’s midterm elections.” This is the only time that the corporate media has even raised the most urgent question: whether the influx of state agents into the Democratic Party is itself an operation by the national-security apparatus.

The rise of the military-intelligence candidates in the Democratic Party shows the false and cynical character of the claims by “left” politicians like Bernie Sanders and Alexandria Ocasio-Cortez of the Democratic Socialists of America that the Democratic Party can be reformed and turned into an instrument for social justice and peace.

The handful of “lefts” like Ocasio-Cortez will be dwarfed by the dozens of military-intelligence Democrats in the new Congress, to say nothing of the millionaires and political hacks who constitute the bulk of the Democratic caucus. More fundamentally, the role of the DSA and the other political appendages of the Democratic Party is to justify and provide a left cover for this fundamentally reactionary party of imperialism.

Asked by a WSWS reporter how she could square her ostensibly “antiwar” politics with so many running mates from the CIA and Pentagon, Ocasio-Cortez replied that she did not believe “a person’s life experience in one way or another necessarily precludes them from running for office.” Even if that “experience” includes, like Elissa Slotkin, the Democratic candidate in Michigan’s Eighth Congressional District, three CIA tours of duty in Baghdad where she was a top aide to Ambassador John Negroponte, a war criminal many times over.

There is nothing socialist about a campaign that is waged shoulder-to-shoulder with CIA agents, war planners and military commanders—and with multimillionaire capitalist politicians like Nancy Pelosi and Debbie Dingell. The only socialist campaign in the 2018 elections is that of Niles Niemuth, the Socialist Equality Party candidate in Michigan’s 12th District, who is challenging the Dingell family dynasty that has held the seat for 85 years.

As the WSWS has warned, the 2018 election campaign marks a new stage in the growing influence of the military-intelligence apparatus in American life. The Democratic Party is not a lesser evil, compared to Trump and the Republicans. If Trump represents the danger of authoritarian rule based on appeals to racism, anti-immigrant bigotry, and police violence, the Democrats are paving the way to a regime in which all political dissent will be branded the product of “Russian meddling” and anyone to the left of the Democratic Party will be censored and suppressed.

Patrick Martin

Two Washington-based financial intelligence analysts explain how Pyongyang is avoiding global banking laws to turn its crypto-currency into dollars

[dropcap]N[/dropcap]orth Korea is increasingly using crypto-currencies to successfully circumvent US sanctions, according to two Washington-based experts.

Lourdes Miranda, an independent financial intelligence analyst and a financial crimes investigator who specializes in intelligence collection and analysis, and Ross Delston, an independent Washington-based attorney and expert witness who specializes in anti-money laundering and combating the financing of terrorism (AML/CFT) compliance matters, said it was also likely that Pyongyang was both trading with established crypto-currencies and also creating its own.

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“International criminals everywhere prefer crypto-currencies and the DPRK is no exception. Crypto-currencies have the added advantage to the DPRK of giving them more ways to circumvent US sanctions. They can do so by using multiple international exchangers, mixing and shifting services – mirroring the money laundering cycle – to exploit international financial institutions that have correspondent banking relationships with the United States,” the pair said in a joint written response to Asia Times questions.

“DPRK can create their own crypto-currencies or use established ones like Bitcoin. Having their own crypto-currency would also facilitate their ability to open online accounts under the guise of a non-adversarial nation using anonymous communication to conceal the user’s locations and usage on the internet,” they added.

Is it possible that DPRK as part of creating its own crypto-currency could create its own blockchain to manipulate their own public record of transactions? Yes, the pair said, and this would be done in order “to appear that transactions are coming from legitimate sources.”

Taking this one step further, Miranda and Delston made it clear that the DPRK could create its own online wallet services – virtual bank accounts – that store, receive and send crypto-currencies into European online wallets that have limited or no Personally Identifiable Information (PII) requirements and/or do not have US sanctions imposed against them.

“Wallets create both public and private keys for security and privacy purposes,” they said. “For example, DPRK could open an online wallet using a Russia-based service, transfer its crypto-currency into a Bulgaria-based wallet service and then transfer it again into a Greece-based wallet service, all through anonymous communication and using their own blockchain.”

The pair say there are two objectives here.

“(First, in order to) avoid AML/CFT scrutiny from European financial institutions that have US correspondent banking relationships, DPRK could hire people to act as nominees who have legitimate PII to open wallets to receive, store and transfer DPRK-disguised crypto-currency,” they said.

“(Second) once the DPRK miners transfer the crypto-currencies into multiple European wallets that appear to come from legitimate sources, the money laundering can begin by mixing, shifting and exchanging crypto-currency into US financial institutions.”

The complexity of the process of mixing and shifting services can vary considerably depending upon the circumstances, and, the relative value and strategic importance of the transactions in question.

“To obscure the origin of DPRK-mined crypto-currencies, DPRK could transfer its crypto-currency from multiple European-based wallets and use multiple mixing services in order to purchase Bitcoin – the most popular and legitimate crypto-currency. Then, using other mixing services, DPRK could split their Bitcoin and transfer them into multiple mixing services, breaking the linear pattern of transactions on the blockchain while remaining in the same crypto-currency type – Bitcoin,” they said.

“A mixer is also known as a Laundry, Tumbler and a Washer. An example of mixing is sending crypto-currency and receiving the same crypto-currency type back. It is equivalent to requesting change for a $100 and receiving different denominations in return totaling a $100.”

Having the ability to conceal the origin of the funds is an extremely important dimension of the DPRK’s activities in this instance.

“Once DPRK split its Bitcoin using multiple international mixing services, it could use shifting services to convert its Bitcoin into another popular crypto-currency such as Ethereum and/or Litecoin to break the linear pattern of transactions on the blockchain to obscure the origin of funds,” they said.

“Most shifting services do not offer fiat currency conversion – fiat currency is any money declared by a government to be legal tender – and many do not have PII requirements, therefore, DPRK would need to find exchanges that will convert their crypto-currencies into fiat currencies.”

And this is all about making the successful exchange of crypto into fiat currencies, and doing so undetected. You can call it integration or the insertion of the virtual currency flow into the mainstream economy.

“Once DPRK mixes and shifts its crypto-currency, then the final and most important stage of the money laundering cycle is reached – integration – by sending its crypto-currency into exchanger accounts that have the capability of converting crypto-currencies into fiat currencies,” they said.

“This is an excellent opportunity for crypto-currencies that originated – or were ‘mined’ – in the DPRK, then split and transferred into multiple European wallets to then find their way to European exchanges that have US correspondent banking relationships with a US bank.

“Voilà, the DPRK now has US dollars with none of those pesky sanctions attached,” said the pair.

This year there has been a concerted ramping up of resources by the US devoted to tracking and defeating this activity. A number of experts including Priscilla Moriuchi, a former top National Security Agency official charged with overseeing cyber threats from East Asia, have come forward to try and highlight the scope, scale and impact of the DPRK’s expanding crypto campaign.

Moriuchi, who is now with the digital intelligence firm Recorded Future, told the Vox in February that the DPRK could be earning as much as $200 million for its nuclear and ballistic missile programs via its crypto-currency channels.

While she identified a network of operational bases created by the DPRK to support this activity in several countries, possibly including China, India, Malaysia and the Philippines, she also said that much more detailed intelligence gathering was required to identify the locations of these bases let alone identify key operational personnel.

She added that the scale of the DPRK’s crypto-currency operation was unknown as of early 2018.

FILE PHOTO: S-300 air defense system © Uliana Solovyova / Sputnik

‘Criminal negligence’ or disregard to Russia-Israel ties: MoD details chronology of Il-20 downing

"We believe that the blame for the Russian Il-20 aircraft tragedy lies entirely with the Israeli Air Force," said spokesman Major General Igor Konashenkov, before revealing a detailed account of events leading to the downing of the Russian Il-20 military aircraft on September 17. The plane was shot down by the Syrian air defense units as Israeli's F-16s effectively used it as a cover during the attack on its neighbor.

The report featured previously undisclosed radar data and details of communications between Russian and Israeli militaries, and concluded that "the military leadership of Israel either has no appreciation for the level of relations with Russia, or has no control over individual commands or commanding officers who understood that their actions would lead to tragedy."

Misinformation & 'criminal negligence'

On the evening of September 17, the Russian Ilyushin IL-20 with 15 crew on board was circling over the Idlib de-escalation zone on a special reconnaissance mission, when four Israeli F-16 fighter jets left their country's airspace and flew over the neutral Mediterranean waters towards the Syrian coast. The Israeli Air Force gave the Russian side less than a minute's warning before dropping the precision-guided glide bombs, leaving virtually no time for any safety maneuvers, Konashenkov said, calling such actions "a clear violation of the 2015 Russian-Israeli agreements."

Moreover, the Israeli military failed to provide the location of their jets or properly specify their targets, claiming they were going to attack several 'industrial facilities' in northern Syria, close to the Il-20’s area of operation. The misinformation prompted the Russian Command to order the recon plane back to the Khmeimim air base. The Israeli jets, however, instead almost immediately attacked the western Syrian Latakia province.

The misleading information provided by the Israeli officer about the area of strikes did not allow the Russian Il-20 airplane to move timely to a safe area.

Once the Syrian air defenses responded to the initial strike, the Israeli jets switched on radar jamming and pulled back, apparently preparing for another attack. One of the Israeli jets then came closer to the Syrian coast and approached the Russian plane, which was preparing to land at that time.

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An Israeli jet approaching the Russian plane at a time when the Syrian anti-air missile was launched © Russian Defense Ministry

The Israeli pilot must have been well aware of the fact that the Il-20 has a much larger radar cross-section than his F-16, and would become a "preferred target" for the Syrian air defense units, who use different friend-or-foe systems with the Russians, Konashenkov said. Thus, for the Syrians, the reconnaissance plane could appear as a group of Israeli jets.

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Special briefing by The Russian MoD on curcumstances of the Il-20 aircraft crash in Syria

"The Israeli jets saw the Russian Ilyushin Il-20 and used it as a shield against the anti-aircraft missiles, while they carried on maneuvering in the region," Konashenkov said during the news briefing.

The actions of the Israeli fighter pilots, which led to the loss of life of 15 Russian servicemen, either lacked professionalism or were an act of criminal negligence, to say the least.

Finally, the Israeli jets carried out their maneuvers in the immediate vicinity of the Khmeimim air base, which is used both by military and civilian aircraft, including passenger planes, the ministry's spokesman emphasized, saying that the reckless actions of the Israeli pilots could also have posed a threat to any passenger or transport aircraft that may have happened to be there at that time.

Israel 'crossed the line of civilized relations' with 'ungrateful response'

Israel's negligent behavior amounts to a flagrant violation of the very spirit of cooperation between the countries, Konashenkov stated, noting that Russia has never broken its commitment to the deconfliction agreement – it has always informed Israel about their missions in advance and has never used its air defense capabilities against the Israelis, even though their airstrikes sometimes put the Russian servicemen in danger.

Russia has sent as many as 310 notifications to the Israeli Air Force Command, while the latter appeared to be reluctant to show the same level of commitment, notifying only 25 times even though its jets carried out more than 200 strikes against targets located in Syria over the past 18 months alone.

"This is an extremely ungrateful response to all that has been done by the Russian Federation for Israel and the Israeli people recently,"Konashenkov said.

The Russian military supported the Syrian military operation in the Golan Heights to "ensure there were no shelling attacks on Israeli territory" anymore, thus allowing the UN peacekeeping mission to resume patrolling of the contested border between Syria and Israel after "a six-year hiatus."

Russia also managed to secure the withdrawal of all Iran-backed groups from the Golan Heights to a "safe distance for Israel," more than 140 kilometers to the east of Syria, the spokesperson said, adding that this was done at the request of Tel Aviv. "A total of 1,050 personnel, 24 MLRSs and tactical missiles, as well as 145 pieces of other munitions and military equipment were withdrawn from the area,"Konashenkov told journalists.

The Russian Defense Ministry had provided assistance in preserving Jewish sacred places and graves in the city of Aleppo. Putting Russian Special Forces soldiers' lives in danger, it also organized the search for the remains of some Israeli servicemen that died during the past conflicts in an area where the Syrian forces were combating Islamic State (IS, former ISIS) terrorists at that time.

In view of the above, the hostile actions committed by the Israeli Air Force against the Russian Ilyushin Il-20 aircraft cross the line of civilized relations.

While Israel said that it mourned the deaths of Russian troops, the IDF statement following the incident shifted all the blame for the incident solely on Damascus, and its Iranian and Lebanese allies.