Pro-Russian groups receive $2.2 million in crypto support in Ukraine

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2022-08-01 01:56:42

Not only Ukraine is receiving crypto donations, but pro-Russian groups operating in the country are also receiving aid. Donations are used to buy military equipment, equipment and weapons for the Russian army.

According to a report coming from blockchain intelligence firm Chainalysis, the company has identified 54 pro-Russian groups that have “received over $2.2 million worth of cryptocurrency. They are paramilitary groups operating in Ukraine. Mainly donations are received in Bitcoin and Ether, but also in Tether, Litecoin and Dogecoin.

54 “Pro-Russian” groups receive crypto donations

54 “Pro-Russian” groups receive crypto donations

If, many of Ukraine’s allied countries are directing aid to this Eastern European country, Russia is also reported to receive $2.2 million in crypto donations from pro-Russian websites. In it, pro-Russian, pro-Russian, is described as a group of parties that support Russia or are allied with Russia.

Chainalysis notes that over $2.2 million worth of crypto assets were acquired by pro-Russian paramilitary groups in the Donbas region of Ukraine. More specifically, Chainalysis said the recipients were in Donetsk and Luhansk.

Until now, the conflict in Donbas and the Donetsk and Luhansk regions of Ukraine has been going on for quite some time. Separatists insist Donbas declared independence from Kyiv in 2014 and pro-Russian military groups agree with the separatists’ claims. Also according to the study, it was discovered that around 54 pro-Russian groups have donated with crypto assets.

Distribution chart from Chainalysis report published on July 29, 2022
Distribution chart from Chainalysis report published on July 29, 2022

According to the data sheet, they received donations: 1.45 million USD BTC; 590,963 USD ETH; 206,822 USD TRX; 21,174 USD LTC and 2,363 USD DOGE. However, the total amount of donations is not concentrated in one fund but divided into many levels of organization. In which, 5 organizations received from 100,000 USD; 17 organizations received from 10,000 USD and 35 organizations received from 1,000 USD.

Since the Ukraine-Russia war began in February, 54 pro-Russian groups in the Donbas region have raised $1.45 million in Bitcoin (BTC) donations and $590k in Ethereum (ETH) donations ).

In addition, Chainalysis also aggregates the goal of using aid from funds. It is known that the donation will be used to buy air force planes, equipment and weapons for the Russian army. Notably, a few pro-Russian organizations have been identified that are under the same sanctions.

“Military support accounts often publish pictures of purchased equipment and descriptions of how future donations will be used,” Chainalysis said.

The Chainalysis report also includes a photo of military equipment purchased with crypto (below) with the following caption: “Sometimes the posts even record purchases.

Pictures of items allegedly purchased with crypto assets (included in report)
Pictures of items allegedly purchased with crypto assets (included in report)

Activities in favor of the Russians

News from Chainalysis was announced on July 29, 2022, as the Ukraine-Russia war continued without end. Recently, a specific mining study revealed that Russia is a popular destination for crypto-asset miners. Research published by Intelion Data Systems has found that cryptocurrency miners are flocking to Moscow and Moscow Oblast, Karelia and Buryatia.

Furthermore, many believe that Russia, China and the BRICS nations are targeting the hegemony of the US dollar by creating a new international reserve currency. Recently, both Russia and Ukraine were blamed for a deadly attack on a prison of war in a breakaway region in Ukraine.

The Chainalysis report added that the funds are being sent to people named on the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) list of sanctioned individuals. For example, Alexander Zhuchkovsky, a Russian citizen appointed by OFAC, used social media to solicit donations for the Russian Imperial Movement.

While $2.2 million in crypto is no small sum, Chainalysis researchers commented that this information is very useful. The company report concludes:

“Because the public blockchains are transparent, we are able to track each transfer in the payment chains of these accounts, gathering details about pro-Russian activities that would be difficult to extract from fiat investigations”.

40% of aid money is suspected of being “dirty money”

Many recent updates show that Russia has suffered severe economic losses from the war. However, this is not to justify soliciting aid by illegal activity.

Follow Chainalysis’s reveal, pro-Russian institutions received “about 11% of the funds indirectly from the “money laundering machines” and sent more than 29% of their funds to the Bitzlato exchange.” However, the Bitzlato exchange was found to be laundering money from the darknet. In a document dated February 2022, Bitzlato extracted a transaction of $1 million from the relevant black market.

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