Crypto News: Russia’s Allies Are Funding Ukraine’s Invasion Attempt With Crypto
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Some of the most interesting crypto news in recent weeks has come out of Russia. The country, which has a short but very complicated history with digital assets, appears to be doing what many political commentators and financial experts have feared by embracing crypto as a way to avoid sanctions. Helping to prove that today there is news about the country’s military allies using crypto to pay for equipment that was used directly in the invasion of Ukraine.
Blockchain intelligence group TRM Labs released a report in mid-September about the Russian paramilitary group Task Force Rusich. It was around this time that the US Office of Foreign Affairs Control (OFAC) sanctioned crypto wallets linked to the group, along with military groups based out of Iran. The report identifies Task Force Rusich as a Russian-founded neo-Nazi paramilitary group. The group is known for its brutality, and accusations of war crimes have followed it since its founding in 2014.
The group has played a significant role in Russia’s invasion of Ukraine, which began earlier this year. Since then, it has received more than $100,000 in crypto donations from around the world. These donations, obtained through Task Force Rusich’s Telegram channel, are used to pay for military equipment it deploys in Ukraine to assist Russian forces. The activities have helped Russia finance military operations while undermining sanctions from large parts of the world.
Another report from TRM since the first shows that groups like Task Force Rusich are only becoming more adept at obtaining these donations. Groups use these funds to buy things like thermal imaging technology and drones for Russian forces.
Crypto News: Pro-Russia groups just one part of Russia’s crypto problem
The crypto news from TRM Labs is worrying from an international relations perspective. It is a disturbing revelation to see pro-Russian forces raising funds in a relatively public manner. However, it is nothing new for investors who have been closely watching Russia’s change in attitude towards crypto.
In July, Russian President Vladimir Putin had signed a bill banning crypto within Russian borders. Like neighboring China, Russia at the time looked to drive out digital assets completely, and most government agencies took a hard line against them.
In late August, however, Iran legalized crypto as a means of importing goods while violating longstanding sanctions from Western nations. After the law was signed, the country saw its first car import in several years. Seeing this signal, several Russian government bodies reversed their positions, including the country’s central bank, its proprietary security agency and others.
By mid-September, it became very clear that the country has noticed Iran’s success in this endeavour. The head of Russia’s Finance Ministry stated the public body’s intention to produce and support legislation allowing Russian businesses to make international payments using cryptocurrency. The news of Task Force Rusich and other groups successfully using the space for the same goals is clearly helping to build support for this change.
At the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
