Russian Groups Crowdfund Gun Buys Via Crypto on Telegram: Study

Since Russia invaded Ukraine last year cryptocurrency has played a surprisingly large role. As a new fundraising tool, crypto has helped Ukraine raise millions of dollars as it seeks to supplement the already enormous amount of money flowing into the country from official American aid and a constellation of charities. Russia, meanwhile, doesn’t seem nearly as interested in digital assets, even if new research shows it is pro-Russian groups has used digital assets to raise money for separatist movements in Ukraine. While Ukraine’s crypto activities have largely been sanctioned by the government itself, those raising money for Russia have sometimes turned to lighter tactics.

Shady Russian Crowdfunding efforts

Research published Tuesday by blockchain security firm CertiK shows that certain pro-Russian online groups have used cryptocurrency as a way to crowdsource funds for Russian soldiers. Much of the money is used to finance “the purchase of weapons, equipment and supplies,” according to CertiK. These informal fundraising tactics are pushed by clusters of Telegram channels, which are used to promote crypto wallet addresses, namely Bitcoin and Ethereum. Researchers write that…

Following the exclusion of Russia from the global financial system, pro-Russian groups have had to turn to other methods of financing the war effort. Cryptocurrency has been one such avenue. The public nature of transactions on the Ethereum and Bitcoin networks makes these flows traceable, which can help identify the source and destination of funds, along with the groups and individuals involved.

Another recently published reportfrom the blockchain analytics firm Elliptical similarly notes that “the most widely observed use of cryptoassets by Russian separatist groups is to procure and supply military equipment – lethal and non-lethal – to Russian soldiers and mercenaries.” Such groups tend to promote pages with links to crypto addresses and statements about how the funds will be used.

Despite being limited in volume, separatist fundraising is often linked to cybercrime, sanctioned entities, or entities that openly advocate or glorify potential violations of international law. Black markets make up the fourth largest known source of donations to pro-Russian fundraising campaigns. However, a significant portion of the donations came from mixers, with smaller amounts originating from similar obfuscation protocols such as privacy wallets and coin exchange services…

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However, it is not just physical ammunition that is being funded – it is also digital. A number of channels have been seen crowdsourcing donations for the pro-Russian hacktivist collective”Killed“, according to both CertiK and Elliptic. Since the beginning of the war, Killnet has been responsible for throwing what most security analysts consider “nuisance level“attacks on Ukraine-allied targets. The hacker group mainly uses DDoS attacks to target NATO and Western websites, including those belonging to airports, media companies and health organizations. A number of Telegram channels have been seen promoting “wallet addresses or content” for the hacker group, CertiK writes.

Ukraine’s Crypto Fundraising Flurry

In contrast, Ukraine’s crypto fundraising has been enthusiastic and ongoing. It even has one DAO. Research shows that digital assets have flowed into the country from a number of different organizations and sources. Ukraine’s government has also welcomed crypto donations in a number of different formats. In particular, the Aid for Ukraine campaign, an official charity, has its own crypto donation option for donors. Elliptical reports that Ukrainian authorities have raised tens of millions of dollars via direct donations of crypto assets.