Over the past eight months, as Russian troops invaded Ukraine's borders and hundreds of thousands of people continued to be mobilized, the Western world took drastic measures to sever the economic ties that underpin Russian invasion and occupation. But even as these global sanctions have carefully closed Russia off from global commerce, billions of dollars continue to flow to Russian military and paramilitary groups in a form that is hard to trace directly: cryptocurrency.
Researchers have found that since February, when Russia launched a full-scale invasion of Ukraine, groups supporting the Russian military in Ukraine have raised at least $4 million in cryptocurrencies. According to analysis by Chainalysis, Elliptic, and TRM Labs, as well as researchers at Binance, the world's largest cryptocurrency exchange, the buyers are paramilitary groups, military contractors, and weapons manufacturers who supply ammunition and equipment. This influx of funds to often officially sanctioned groups shows no signs of slowing down and could even accelerate: in the past two months, Chainalysis has raised nearly $1.8 million from Russian military groups, compared to 2, $2 million from established groups. received in the previous five months. And while they can track these funds, they have been difficult to freeze or block because largely unregulated or sanctioned cryptocurrency exchanges, most of which are based in Russia, collect millions in donations from bad actors.
"Our goal is to identify all crypto wallets used by Russian military groups and the people who support them, to find, seize and block this activity that buys cartridges and ammunition for this profession," Sergey said. Kropiva, until recently deputy. He worked as Ukrainian cyberpolice and as an adviser to the country's chief prosecutor. “Thanks to the close cooperation of companies like Chainalysis and Binance, we can see all the wallets involved in this criminal activity, the flow of millions of dollars. But, unfortunately, we see that the translation continues uninterrupted.
In separate reports, cryptocurrency tracking firms and research group Binance tracked donations to the Russian military, which often began with public posts on Telegram, a messaging app that solicits donations via the crowdfunding. For example, Chainalysis found messages on Telegram from Russian media organizations linked to the infamous Wagner mercenary group, including Russian media websites Rybar and Yuzhny Front, and paramilitary group Rusich, posting donation addresses on Telegram. Messages to viewers informed viewers that the money raised would be used for everything from armed drones to radios, gun accessories and body armor. In another case, Chainalysis cites a fundraiser by a group called Project Terricon that attempted to auction off NFTs to support pro-Russian militias in eastern Ukraine, even though the NFTs were removed from the market. main market before the auction.
In its report, the Binance research team discovered that a total of $4.2 million worth of cryptocurrencies have been sent to Russian military groups since February. The groups mentioned in his research do not exactly match the groups mentioned in the Chainalysis report, suggesting that the total funding could be far greater than the sum of Binance or Chainalysis. For example, Binance refers to a pro-Russian “cultural heritage” group known as MOO Veche, which raised funds for military equipment funded by Chainalysis-funded groups. While Binance, TRM Labs, and Elliptic list MOO Veche as a major fundraiser, Elliptic has provided the team with $1.7 million in crypto donations, far more than any other explorer.