Crypto Fundraising by Pro-Russian Groups Continues as More Sanctions Put in Place

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Groups in Rus­sia are report­ed­ly rais­ing mon­ey in cryp­to to sup­port para­mil­i­tary oper­a­tions and cir­cum­vent U.S. sanc­tions while the war with Ukraine continues.

As of Sept. 22, these fundrais­ing groups had raised $400,000 in cryp­tocur­ren­cy since the inva­sion began on Feb. 24, accord­ing to a report by TRM Labs cit­ed by CNBC.

Telegram becomes the crypto fundraising platform of choice 

The study found that groups are pro­vid­ing options for peo­ple to donate mon­ey through the encrypt­ed mes­sag­ing app Telegram. The fund is sub­se­quent­ly used to finance com­bat train­ing at sites near the Ukrain­ian bor­der, sup­ply Russ­ian-affil­i­at­ed mili­tia groups, and fund ther­mal imag­ing equip­ment and radios, as per the report.

In addi­tion, as per a CNBC report, the Novorossia Aid Coor­di­nat­ing Cen­ter gath­ered rough­ly $21,000 in cryp­tocur­ren­cy, pri­mar­i­ly bit­coin, intend­ing to pur­chase drones to sup­port Russ­ian operations.

Accord­ing to Ari Red­bord, head of legal and gov­ern­ment affairs at TRM Labs, these groups are prob­a­bly using exchanges that don’t always adhere to anti-mon­ey laun­der­ing and oth­er standards.

“They’re prob­a­bly using non-com­pli­ant exchanges to off-ramp those funds [into fiat cur­ren­cy],” Red­bord told CNBC.

Fresh sanctions by the EU

Mean­while, the Euro­pean Union pro­posed a new round of sanc­tions on Moscow on the back of the country’s war esca­la­tion. A source famil­iar with the sit­u­a­tion recent­ly told Bloomberg the new sanc­tions extend to cryp­to, lim­it­ing Euro­pean com­pa­nies from offer­ing cryp­tocur­ren­cy wal­let, account, or cus­tody ser­vices to Russ­ian nation­als and enti­ties based in Russia.

Despite the glob­al sanc­tions, a Russ­ian offi­cial con­firmed in Sep­tem­ber that a bill on dig­i­tal cur­ren­cies draft­ed by the Finance Min­istry should estab­lish a frame­work for cryp­to trans­ac­tions. Ivan Chebeskov of the Finan­cial Pol­i­cy Depart­ment of the Finance Min­istry stat­ed that a list of cur­ren­cies and coun­ter­par­ty nations for a set­tle­ment frame­work would be out­lined in the bill.

“I think an inter­est­ing part of this sto­ry is that cryp­to is just a pay­ment method in these cas­es. It’s a way to move funds. And here’s an exam­ple of it being used for good and exam­ple of it being used for bad in this con­text,” Red­bord said.

Amid the war, Ukrain­ian cryp­to exchanges also report­ed an increase. Vik­tor Kochetov, CEO of the Kyrrex cryp­to exchange, pre­vi­ous­ly told Be[In]Crypto that the cryp­to busi­ness kept his finan­cial ecosys­tem afloat and has grown it while immersed in war.

Accord­ing to Mykhai­lo Fedorov, min­is­ter of dig­i­tal trans­for­ma­tion, the gov­ern­ment of Ukraine uti­lized some of the $54 mil­lion earned via cryp­tocur­ren­cies to buy arms and weapons. The tweet high­light­ed that there is still $6 mil­lion left to spend.

Chainal­y­sis also not­ed in its Sep­tem­ber report that Ukraine ranked in the top 10 emerg­ing mar­kets dom­i­nat­ing the Glob­al Cryp­to Adop­tion Index and the top 20 globally.

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.



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