Groups supporting Russia’s war effort in Ukraine have been actively collecting cryptocurrency to fund paramilitary operations and evade sanctions, researchers say. According to a new report, these organizations use Telegram to raise funds, which are then used to pay for equipment and training.
Paramilitary Groups Employ Cryptocurrency to Fund Russian Operations in Ukraine
Paramilitary groups are reportedly raising serious amounts of cryptocurrency to fund Russian military operations in Ukraine, circumventing U.S.-led sanctions. According to a survey conducted by digital asset compliance and risk management firm TRM Labs, the total amount reached $400,000 as of September 22, CNBC reported Monday.
The investigation revealed that these organizations used the popular encrypted messaging app Telegram to offer supporters the option of sending money, which was later used to purchase supplies for Russian-backed militia groups and for their combat training at locations near the Ukrainian border. spent.
One of the groups, Task Force Ruzich, was labeled by the U.S. Treasury Department as a “neo-Nazi paramilitary group that participated in combat alongside Russian forces in Ukraine.” The Department’s Office of Foreign Assets Control (OFAC) has placed it under sanctions. They were trying to raise funds to purchase items such as infrared cameras and radios on the Telegram Channel.
Another group identified by TRM Labs, the Novorossiya Aid Coordinating Center, raised about $21,000 in cryptocurrency, primarily bitcoin (BTC), for the purpose of purchasing drones, the report added . The organization was established in 2014 to support Russian activities in Ukraine.
The findings come amid tightening sanctions against Russia over its decision to attack Ukraine in late February, which severely restricted access to the global financial system. The Russian government is currently working to legalize crypto payments for international payments in order to circumvent the restrictions.
is said to lack liquidity for large-scale transactions in Russia.
The crypto space may not have enough liquidity for Russia to move large sums of money, but as experts point out, it has enough liquidity to allow for transfers for items that paramilitary groups need to acquire.
TRM Labs’ head of legal and government relations Ari Redbord elaborated as follows.
They probably use non-compliant exchanges to off-ramp these funds … Of course, it will be more. But will it be in the billions of dollars? Very unlikely
TRM Labs used publicly available wallet addresses and cross-checked other websites and online activity to identify this group. However, Redbord has stated that it is impossible to establish with certainty whether they are working with the Russian government.
“The interesting part of this story is that crypto is only one form of payment in these cases. It is a way to transfer funds. And in this context, there are examples of it being used for good and for bad,” the executive added. Voluntary organizations and governments in Ukraine also use cryptographic donations to fund defense and humanitarian activities.
The latest research on this topic comes after a report earlier this year by blockchain analytics firm Chainalysis identified 54 pro-Russian groups that collectively received more than $2.2 million in various cryptocurrencies. While most of the crypto money went to some of these organizations, the remaining organizations also received substantial amounts, the firm said.
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