The Fight to Cut Off the Crypto Fueling Russia’s Ukraine Invasion
Like the Russian army has flooded Ukraine’s border in the past eight months — and with the mobilization of hundreds of thousands more underway — the Western world has taken drastic measures to sever economic ties. Invasion of Russia and job. But even as those global sanctions have carefully removed Russia from global commerce, millions of dollars continue to flow directly to Russian military and paramilitary groups in a proven form. proof is harder to control: cryptocurrencies.
Researchers have found that since Russia launched its all-out invasion of Ukraine in February, at least $4 million in cryptocurrency has been collected by pro-Russian military groups in Ukraine. According to analysis by crypto tracing firms Chainalysis, Elliptic, and TRM Labs, as well as investigators at Binance, the world’s largest cryptocurrency exchange, recipients include paramilitary groups providing ammunition and equipment suppliers, military contractors and weapons manufacturers. That flow of money, normally destined for officially sanctioned groups, shows no sign of abating and may even be accelerating: Chainalysis has traced about $1.8 million in funding to Russian military groups in the last two months alone, roughly matching the $2.2 million it found groups received in the previous five months. And despite the ability to track those funds, freezing or blocking them has proven difficult, largely because crypto exchanges are unregulated or sanctioned – most of them. that’s based in Russia – making millions in donations for the invaders.
“Our aim is to identify all crypto wallets being used by Russian military groups and their helpers; Serhii Kropyva, who recently held the post of Deputy Cyber Police of Ukraine and an adviser to the Prosecutor General of the country said. “With the close cooperation of companies like Chainalysis and Binance, we can see all the wallets involved in this criminal activity, these flows are in the millions of dollars. But unfortunately, we can see that the transfer is still going on all the time.”
In separate reports, crypto tracing firms and Binance’s investigative team both tracked donations to the Russian war effort, which often began with public posts on the messaging app. believe Telegram call for donations to raise capital from the community. Chainalysis, for example, found Telegram posts from organizations including pro-Russian media websites Rybar and Southfront, as well as paramilitary group Rusich—has ties to the infamous Wagner mercenary group—All post crypto donation addresses on Telegram. These posts tell followers that the money raised will be used for everything from weaponized drones to radios, rifle accessories and body armor. In another case, Chainalysis points to a fundraiser by a group called Project Terricon that attempted to auction off NFTs to support pro-Russian militia groups in Eastern Ukraine, even though the NFTs were removed. from the market in which they were held before any bids were placed.
Binance’s investigative team, in its own report, found that a total of $4.2 million in cryptocurrency has been transferred to Russian military groups since February. The groups named in its study do not quite overlap with those named in the Chainalysis report, suggesting that the total amount of funding may be much larger than the total amount of Binance or Chainalysis. For example, Binance points to a pro-Russian “cultural heritage” group called MOO Veche that has been conducting fundraisers for military equipment similar to those sponsored by groups that Chainalysis flags. While Binance, TRM Labs, and Elliptic all call MOO Veche a major fundraiser, Elliptic has tracked down $1.7 million in crypto donations to the team, far more than other researchers.