Pro-Russian Paramilitary Groups Raise $400,000 in Bitcoin, Crypto to Avoid Sanctions: TRM Labs

Pro-Russian groups conduct crowdfunding campaigns and collect a significant amount Bitcoin and other cryptocurrencies to avoid US sanctions and support paramilitary operations in war-torn Ukraine, according to research by blockchain intelligence firm TRM Labs.

“As of last week, we identified about $400,000 that has been raised since the beginning of the invasion in February,” Chris Janczewski, head of global investigations at TRM Labs, said in an interview with CNBC.

One of those groups, according to Janczewski, is “Task Force Rusich,” described by the US Treasury’s Office of Foreign Assets Control (OFAC) as a “neo-Nazi paramilitary group that has engaged in combat alongside Russia’s military in Ukraine.”

Task Force Rusich, which is accused of committing horrific atrocities against Ukrainians, was sanctioned by OFAC last month along with two of its leaders and five crypto addresses linked to the group.

TRM Labs discovered that this group was looking to raise money to buy thermal imaging units and radios, among other things.

Another pro-Russian group that turned to cryptocurrencies to raise money is “The Novorossia Aid Coordinating Center,” which raised about $21,000 — mostly in Bitcoin — to buy drones, according to the report.

TRM Labs has yet to respond Decryptits request for comment.

Crypto as a way to avoid sanctions

The research also revealed that these groups use encrypted messaging apps like Telegram to provide ways to send cryptocurrencies that are later converted to fiat to support combat training in locations near the border with Ukraine.

“They are probably using non-compliant exchanges to move these funds [into fiat]”, said Ari Redbord, head of legal and government affairs at TRM Labs CNBC.

While the amount of money raised by pro-Russian groups may seem insignificant compared to the millions of dollars in crypto donations received by Ukraine since the start of the war, Janczewski believes it is “an indication of where things could go.”

“Obviously, you may see a higher number of dollars in the traditional fiat banking system, but as sanctions tighten against various groups, they may flee the traditional financial systems, and cryptocurrencies are certainly an avenue they may pursue,” Janczewski said. adding that this number is likely to increase.

In July, blockchain analytics firm Chainalysis reported that groups linked to Russia had raised $2 million in cryptocurrency, with the vast majority of funds sent in Bitcoin and Ethereumfollowed by “significant amounts” i Tether, Litecoinand Dogecoin.