Pro-Russia groups raise $2 million in crypto to support Russia’s war against Ukraine

• There have also been pro-Ukraine groups that have raised various amounts in crypto.
• Ukraine’s minister for digital transformation recently stated that the country had received nearly $100 million in digital currencies.

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Russia and Ukraine have received crypto funding as the war between both nations continues. A new report by Chainalysis published on July 29 states that various pro-Russia volunteer groups have raised $2.2 million in cryptocurrencies from various donors to support the nation’s war against Ukraine.

The report’s analysis of the donations revealed that $1.45 million of the funds were in bitcoin, $900,000 in Ethereum, and the remaining shared in varying proportions in Dogecoin, Litecoin, and Tether. Thus, indicating that donations in Bitcoin and Ethereum were the highest.

A few of the top groups received the majority of the funds. An account from one of these groups received more than $1 million worth of cryptos. The blockchain analytics study of the group’s social media posts showed that they used most of these funds to equip paramilitary groups.

The report also said that nearly 50 percent of these paramilitary groups have public requests for funds, especially those in Luhansk and Donetsk. These are territories under the approval of the Office Of Foreign Assets Control (OFAC).

During the early stages of the Russia-Ukraine war, the IMF, United Nations, and some top economies in the world sanctioned Russia in various ways. However, US Senator, Elizabeth Warren, expressed fears that Russia could use cryptos to evade these sanctions.

A few other senators also agreed with her. Hence, this Chainalysis report confirmed Senator Warren’s fears. The pro-Russia groups named its crypto fund-seeking scheme Project Terricon. These funds donations aim to support Russia’s militia groups in various stations.

Project Terricon already has a website, and content from part of the website clearly states that “it is receiving donations in virtual currencies to avoid economic sanctions imposed on Russia.” When Senator Warren expressed her fears, many crypto players, such as Chainalysis co-founder, Jomy Levin, argued that it was near impossible to evade sanctions with cryptos.

Their reason was that it is easy to track large amounts of donations through public blockchain networks, especially over $1 billion worth of donations. However, the new report by the analytics company proves that small donations are possible and might not be easily tracked. Also, many sanctioned states would even prefer these small crypto donations.

Comparing Ukraine and Russia’s crypto donations

Nevertheless, Ukraine has received tens of millions of funds since march 2022 in its fight against Russia. A March 2022 report by crypto analytics company, Elliptic, stated that total crypto donations to various Ukrainian groups should be $64 million.

However, a few weeks later, Alex Bornyakov, Ukraine’s digital transformation minister, said the country had received nearly $100 million in crypto donations. That proves that Ukraine’s crypto donations are nearly 50X that of Russia’s. The amount of crypto donations received by Ukraine must have nearly doubled between March and now.