According to a recent report by on-chain analytics firm Chainalysis, pro-Russian groups in Ukraine are raising funds in Bitcoin, Ethereum, Litecoin and other cryptocurrencies to support their operations. The report claims that these groups have collectively raised over $2.2 million across social media platforms.
As can be seen below, most of the donations were made in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE) and USDT based on the TRON network. The report linked those funds to around a dozen social media accounts.
Source: chain analysis
The Chainalysis report showed the following message as an example of the post shared on social media platforms to raise funds in different cryptocurrencies. As the post shows, the proceeds are intended for the purchase of equipment and war material for resistance against the Ukrainian armed forces:
(…) We only need to collect 150,000 rubles for a drone that will be able to bring “gifts” to the positions of our Ukrainian “friends”. We hope that we can shoot it on video and please you with interesting shots.
Other posts show that these militias are investing in medical supplies such as first aid kits, communications hardware, SIM cards, gun maintenance supplies and more. Those responsible for this alleged account often provide their donors with detailed accounts of the devices they have purchased.
The report claims that even those groups with less success at raising funds can make a difference in the war effort. The groups, which have raised about $1,000, could pool their funds to purchase radio equipment and improve the militia’s reconnaissance capabilities using unmanned aerial vehicles (UAVs) at a cost of $3,000.
BTC price with minor gains on the 4-hour chart. Source: BTCUSDT Trading View
Pro-Russia militia funds in Bitcoin compared to those of Ukraine
The report claims that some of the funds raised by these militias are linked to US Office of Foreign Assets Control (OFAC) organizations and individuals. These companies have publicly stated that they are looking for a way to circumvent international currency restrictions via crypto and non-fungible tokens (NFTs).
Chainalysis has had little success with the latter, as many of these individuals’ NFT offerings see zero bids before being removed from the digital asset marketplace. Some of these units have been identified as Project Terrico, Alexander Zhuchkovsky, Bitzlato, Rybar, Rusich, SouthFront and others.
The report found the following about the direct connection between these individuals, the funds and the pro-Russian groups:
Several social media account operators have indicated that donations sent to them directly benefit the Donetsk People’s Militia and the Lugansk People’s Militia, which appear to be linked to the Donbas People’s Militia, an organization recognized by OFAC on December 19, 2014 was sanctioned.
However, the report acknowledged that the $2.2 million raised by these militias “pales in comparison to the tens of millions in crypto donated to Ukraine.” In addition, the company claims that cryptocurrencies are a transparent way to transfer money.
Therefore, donations to these pro-Russian militias can be easily tracked by the international community, removing the tactical advantage of similar fiat currency donations. chain analysis said:
(…) Public blockchains are transparent, we can trace every transaction in the payment chains of these accounts and gain insights into pro-Russian activities that would be harder to extract from fiat money investigations.
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