Blockchain Intelligence Reveals Pro-Russian Groups Raising Funds Through Cryptocurrencies
Pro-Russian paramilitary groups are raising bitcoin (BTC) and other cryptoassets to evade sanctions and fund their operations, as reported by CNBC. The report is based on research published by TRM Labs, a digital asset compliance and risk management company.
It is alleged that these groups have raised over $400,000 since the start of the invasion in February this year.
The groups are using the encrypted messaging app Telegram to offer ways in which supporters can send funds. This money is then used to supply Russian-affiliated militia groups, as well as to support combat training close to the border with Ukraine, said the report.
Ari Redbord, head of legal and government affairs at TRM Labs, told CNBC that these groups are “probably using non-compliant exchanges to off-ramp those funds [into fiat currency],” referring to crypto exchanges that are less compliant with anti-money laundering (AML) regulations.
As they are raising smaller amounts of money, it is easier to move the funds – which helps their effort to avoid various sanctions, Redbord said, adding that,
“You just can’t do that at scale. And […] will there be more? Of course, there’ll be more. But will it be billions of dollars? Highly unlikely.”
He argued that,
“I think an interesting part of this story is that crypto is just a form of payment in these cases. It’s a way to move funds. And there’s an example of it being used for good and example of it being used for bad in this context.”
Task Force Rusich, a group sanctioned by the Treasury Department’s Office of Foreign Assets Control (OFCA), is one of these organizations identified by TRM Labs. They are asking for funds that they can spend on items such as radios and thermal imaging equipment.
The US Treasury included Task Force Rusich on the list of designated individuals and entities that are facilitating Russia’s aggression in Ukraine back in September, saying that,
It is “a neo-Nazi paramilitary group that has participated in combat alongside Russia’s military in Ukraine, as well as two of its senior leaders.”
Another named entity is the Novorossia Aid Coordinating Center, which raised some $21,000 in crypto, mostly in BTC, for buying equipment – specifically drones, said the report.
TRM Labs used publicly available wallet addresses while cross-checking websites and activity online to identify the Russian-linked groups. Redbord said that it’s impossible to know if these groups were working with the Russian government or were somehow backed by it.
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