Ukraine’s Government Is Offering a Bounty for Information Leading to the Wallet Addresses of Russian Politicians
Ukraine’s government is offering a reward to anybody with actionable information on Russian lawmakers’ crypto wallet addresses.
In a tweet, Ukraine’s Minister of Digital Transformation Mykhailo Fedorov requested tip-offs on the addresses of crypto wallets used by Russian officials, as well as action against “war crimes.”
“War crimes must be investigated and prosecuted!” he said on Twitter, alluding to Russia’s recent invasion on Ukraine.
The tips will be rewarded with a bounty, given in cryptocurrency, at the politician’s choice. The money will be raised via private cryptocurrency contributions in the form of ETH, Bitcoin, and other cryptocurrencies made by members of Ukraine’s crypto community.
Artem Afian, a lawyer, has been nominated by the government to lead the tipoff campaign. As of this writing, Afian has received 500 suggestions and plans to reveal a list of politicians’ addresses in the coming days for distribution to the world’s top exchanges.
The government’s goal in establishing this initiative is to label politicians’ addresses as “toxic,” disincentivizing transactions involving them and eventually blacklisting them from major exchanges. “We want them to realise that they are not welcome in Ukraine or in the cryptocurrency world,” Afian said.
Afian said that the addresses would be shared with crypto analytics company Chainalysis. Chainalysis remarked in a Twitter thread that sanctioned persons are unlikely to transfer substantial amounts of cryptocurrency at the moment. Nonetheless, it is “watching for on-chain evidence of Russian actors evading sanctions using crypto.”
Could cryptocurrency bounty programmes be weaponized?
The continuing war in Ukraine is exposing the cryptocurrency field to the difficulties of geopolitical sanctions targeting Russia’s behaviour.
It might be an excellent learning opportunity for global regulators, allowing them to draught the required legislation requiring crypto exchanges that do business with sanctioned states (and/or persons) to blacklist and disclose their wallet addresses for national security purposes.
Governments might potentially establish their own reward programmes utilising bitcoin confiscated in the course of cryptocurrency criminal arrests, incentivizing people to come forward with actionable information on blockchain criminals.
We have previously seen P2P systems, such as Uniswap, required to do sanctions checks under the Bank Secrecy Act. According to Mondaq, a “money transmitter” is defined under the Financial Crimes Enforcement Network’s BSA laws as “any individual involved in the business of providing money transmission services or any other person engaged in the business of fund transfer.” This seems to place Defi within FinCEN’s authority.
Centralized exchanges are likewise covered by FinCEN’s BSA, as shown by a recent Congressional hearing with FTX CEO Sam Bankman-Fried.
Bankman-Fried said during the hearing that FTX conducts sanctions checks on anybody who joins up for their platform, ensuring that those subject to international penalties are unable to trade.
The granting of cryptocurrency to tippers who provide actionable information demonstrates that Ukraine is a pioneer in the use of crypto on two fronts since the request for politicians’ addresses is an aggressive manoeuvre to pressure Russian lawmakers.
On the other side, the country has requested contributions through its official Twitter account in bitcoin, ETH, and Tether, with estimates indicating that upwards of $9 million has been collected.
Both ventures highlight how cryptocurrency may be used to effortlessly cross international boundaries for humanitarian purposes as well as to support political and military activities.