Militias in Ukraine raise $2.2 million in Bitcoin to support Russia
According to a recent report by research firm Chainalysis, pro-Russian groups in Ukraine are raising money in Bitcoin, Ethereum, Litecoin and other cryptocurrencies to support their operations. The report claims that these groups have raised over $2.2 million using social media platforms.
As shown below, most of the donations have been made in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE) and USDT based on the TRON network. The report linked those funds to about a dozen social media accounts.
The Chainalysis report showed the following message as an example of the post that was shared across social media platforms looking to raise funds in various cryptocurrencies. As the post shows, the proceeds of the funds are intended to purchase equipment and war material to counter the Ukrainian forces:
(…) we have only 150 thousand rubles left to collect for a drone that will be able to bring “gifts” to the positions of our Ukrainian “friends”. We hope that we will be able to capture it on video and delight you with interesting pictures.
Other posts show that these militias are investing in medical equipment, such as first aid kits, communication hardware, SIM cards, weapons maintenance supplies and more. The people in charge of this purported account often provide their donors with detailed reports on the equipment purchased.
The report argues that even the groups with less success in raising funds can make a difference in the war effort. The groups that raised about $1,000 were able to pool their money to purchase radios and upgrade the militias’ unmanned aerial vehicle (UAV) reconnaissance capabilities at a cost of $3,000.
Comparison of pro-Russian militia funds in Bitcoin with Ukraine’s
The report claims that some of the funds collected by these militias are linked to organizations and individuals by the US Office of Foreign Assets Control (OFAC). These entities have publicly stated that they are looking for a way to bypass international monetary restrictions via crypto and non-fungible tokens (NFT).
On the latter, Chainalysis has little success with many of the NFT offerings from these individuals registering zero bids before being removed from the digital asset market. Some of these entities have been identified as Project Terrico, Alexander Zhuchkovsky, Bitzlato, Rybar, Rusich, SouthFront and others.
The report noted the following about the direct link between these individuals, the funds and the pro-Russian groups:
Several social media account operators have indicated that donations sent to them will directly benefit the Donetsk People’s Militia and Luhansk People’s Militia, which appear to be affiliated with the Donbas People’s Militia, an organization sanctioned by OFAC on December 19, 2014.
However, the report acknowledged that the $2.2 million raised by these militias “pales in comparison to the tens of millions in crypto donated to Ukraine”. Additionally, the firm claims cryptocurrencies are a transparent way to transfer funds.
Thus, donations to these pro-Russian militias are easy to track by the international community removing the tactical advantage of similar donations made in fiat currency. Chainalysis said:
(…) public blockchains are transparent, we can follow every transfer in these accounts’ payment chains, and gain insight into pro-Russian activities that would be more difficult to extract from fiat money investigations.
