Pro-Russian Groups Raise $2 Million in Bitcoin, Ethereum to Fund War: Chainlight
by James · July 29, 2022
Both sides of the conflict between Russia and Ukraine are financed by crypto.
Over 54 pro-Russian volunteer groups have collectively raised $2.2 million in cryptocurrency donations to fund war efforts in Ukraine, according to a report from Chainalysis on Friday.
The blockchain the research firm said the vast majority of funds were submitted Bitcoin ($1.45 million) and Ethereum ($590,000), with “significant amounts” submitted Tether, Litecoinand Dogecoin also. Most of the funds were donated to just a few top groups, with one account receiving over $1 million in crypto.
“Social media posts by the groups indicate that a large portion of these funds are being used to equip paramilitary groups,” Chainalysis said. The report claims that about half of the accounts collecting donations have publicly solicited support for militias located in Donetsk and Luhansk – territories sanctioned by the Office of Foreign Assets Control (OFAC).
American politicians, such as Senator Elizabeth Warren, raised concerns earlier this year about the possibility that Russia could use crypto to avoid sanctions. Chainalysis today highlighted a pro-Russian group that claims to be doing just that. Project Terricon, which has solicited crypto donations to support Russian militia groups, “explicitly states on its website that it uses cryptocurrency due to the imposition of sanctions,” the report said.
Chainalysis co-founder Jony Levin argued back in March that the potential for crypto to be used to evade sanctions was limited, given that large amounts (of more than $1 billion, for example) could be easily traced on public blockchain networks. However, the crypto-tracking firm’s report today suggests that small crypto donations are indeed possible, and perhaps even attractive, for sanctioned entities.
According to Chainalysis, the $2.2 million received by Russian groups is still dwarfed by tens of millions donated to the Ukrainian side of the war effort in March. Deputy Minister of Ukraine’s Ministry of Digital Transformation, Alex Bornyakov, has publicly solicited donations in crypto since the start of the war.
In March, crypto-analytics firm Elliptic put the total raised by Ukrainian groups in crypto-donations at $64 million, although Bornyakov himself said it was “close to $100 million” at the time.
