A Blockchain intelligence agency asserts that pro-Russian armed organizations raise funding through crypto
As a result of Russia’s invasion of Ukraine, which has resulted in international economic sanctions, cryptocurrencies have emerged as an attractive way to conduct transactions and fundraise.
CNBC reported on October 3 that blockchain startup TRM Labs’ study found that pro-Russian organizations are gathering cash in cryptocurrencies to finance paramilitary activities and circumvent U.S. sanctions.
According to the company’s CEO, Chris Janczewski, the groups had collected at least $400,000 by September 22.
TRM Labs analyzed a mix of publicly accessible wallet addresses and cross-referenced websites to identify Russian-affiliated entities before determining the amount raised. However, it has not yet been determined if the organizations are collaborating with the Russian government.
Notably, the organizations are apparently using the messaging app Telegram to generate donations by disseminating information on how donors may help Russian-affiliated militia groups and conduct military training near the Ukrainian border. Some monies have been allocated for the acquisition of radios and thermal imaging equipment.
Task Force Rusich, defined by the U.S. Treasury Department as a “neo-Nazi paramilitary outfit,” has been identified as one of the groups involved.
Following the invasion of Ukraine, Russia has been subjected to a number of sanctions. The purpose of the sanctions is to cut Russia off from the global financial system.
“I find it intriguing that cryptocurrency is only a way of payment in these instances. It is a method of moving money. In this context, there are examples of its application for good and for evil, according to Ari Redbord, director of legal and government relations at TRM Labs.”
Concerns have grown in recent months around the likelihood of Russia using cryptocurrency to escape sanctions. Intriguingly, Russia may have difficulty using cryptocurrency due to a lack of sufficient liquidity to offset the severity of the restrictions.
Simultaneously, as a result of the restrictions, Russian authorities have sought to introduce crypto-friendly rules. For example, the Russian Ministry of Finance (Minfin) has said that it is willing to support any law that encourages the usage of stablecoins.