Blockchain intelligence firm claims pro-Russian military groups are using crypto to raise money
With Russia facing international economic sanctions following its invasion of Ukraine, cryptocurrencies have emerged as an ideal avenue for trading and supporting courses such as fundraising.
In this line, blockchain firm TRM Labs’ research has revealed that pro-Russian groups are raising funds in cryptocurrency to support paramilitary operations and avoid US sanctions, CNBC reported on October 3.
According to the company’s CEO, Chris Janczewski, the groups had raised at least $400,000 by September 22.
When coming up with the amount raised, TRM Labs reviewed a combination of publicly available wallet addresses along with cross-checking websites to detect Russian-linked groups. However, it has not been determined whether the groups are cooperating with the Russian government.
Using Telegram to raise funds
In particular, the groups allegedly leveraged the messaging app Telegram to raise money by sharing ways funders could support Russian-linked militia groups and combat training in locations near the Ukrainian border. Some funds have been channeled into purchasing items such as thermal imaging equipment and radios.
Interestingly, one group involved has been identified as Task Force Rusich, which the US Treasury Department described as a “neo-Nazi paramilitary group.”
It is worth noting that Russia is facing a series of sanctions after the Ukraine invasion. The sanctions are intended to cut off Russia from the global financial system.
“I think an interesting part of this story is that crypto is just a form of payment in these cases. It’s a way of moving funds. And it’s an example of it being used for good and an example of it is used for the bad in this context, says Ari Redbord, head of legal and government affairs at TRM Labs.
Concerns about using crypto to avoid sanctions
In recent months, concern has grown over the possibility of Russia opting for cryptocurrencies to avoid the sanctions. Interestingly, Russia may face a hurdle in the use of cryptocurrencies due to a lack of enough liquidity to offset the scale of the sanctions.
At the same time, Russian agencies, after the sanctions, have been working to unveil crypto-friendly rules. For example, the Russian Ministry of Finance (Minfin) recently noted that it was ready to support any legislation supporting the use of stablecoins.
