Key Takeaways:
- Over 54 pro-Russian groups sourced $2.2 million in cryptocurrency donations to fund the war in Ukraine.
- The $2.2 million in crypto donations amounted to around 4% of crypto sent in support of Ukraine.
The blockchain analytics firm Chainalysis reported that over 54 pro-Russian groups had sourced $2.2 million in cryptocurrency donations to fund war efforts in Ukraine. Over $1 million in crypto went to a single unnamed account.
In the blog post, Chainalysis said it had tracked funds controlled by pro-Russian groups and noticed that the vast majority of funds were sent in Bitcoin ($1.45 million) and Ethereum ($590,000), with “considerable quantities” sent in Tether, Litecoin, and Dogecoin. As per the report, $2.2 million could be used primarily for military equipment and to finance propaganda sites.
The $2.2 million in crypto donations amounted to around 4% of crypto sent in support of Ukraine. “While significant, the $2.2M worth of crypto donated to pro-Russian groups still pales in comparison to the tens of millions in crypto donated to Ukraine,” reports Chainalysis. As of March, the total raised by Ukrainian groups in crypto donations is reported to be $64 million.
Reportedly, aid for Ukraine, a platform backed by the government’s Ministry of Digital Transformation, had received over $45 million in crypto since March. The world’s leading Crypto exchange Binance, which facilitates donations through its Ukraine Emergency Relief Fund, also reported over $10 million received since February.
The Chainalysis report also claims that a portion of accounts collecting donations have publicly solicited support for militias located in Donetsk and Luhansk—territories sanctioned by the Office of Foreign Assets Control (OFAC). These entities have publicly stated that they are planning to circumvent international monetary restrictions via crypto and non-fungible tokens (NFTs).
Since the war erupted in February, the U.S. has imposed many sanctions against Russia to disincentivize them from going forward with the invasion. Many lawmakers have accused Russian firms and businesses of using crypto to evade sanctions potentially.
Reinstating their fears, Project Terricon, which has been soliciting donations in crypto to support Russian militia groups, “explicitly states on their website that they are using cryptocurrency due to the imposition of sanctions,” as per the Chainalysis report. Amidst this, in July, Russian President Vladimir Putin signed a bill into law effectively banning the use of digital assets as payment for goods and services in the country.
Ever since the invasion by Russia, Ukraine has opened its economy to the world of crypto. The country began accepting donations toward its military defense against Russia via digital currencies like BTC, and Ethereum. It has since then expanded the number of cryptocurrencies that it accepts for donations, as well as launched an official website where people worldwide can donate via cryptocurrencies.
