Ukrainians made the headlines during the war as they received millions of dollars in cryptocurrency and digital collectibles to help sustain their military defence against Russia’s war effort. On the other side of the coin, Russia too has been the recipient of these donations too. Chainalysis published a report that revealed that several pro-Russian groups have raised over $2 Million from cryptocurrency donations (mostly BTC and ETH) to fund their invasion of Ukraine.
The report revealed that a total of 54 pro-Russian groups were recipients of over $2.2 Million worth of BTC, ETH, LTC, Tether and DOGE. These donations were to be used to fund the provision of military equipment and logistics to Russian para-military groups in Ukraine’s Donbas region.
According to Chainalysis, the donated cryptocurrency was mostly used to purchase communication devices, drones, bulletproof vests, weaponry and other war supplies. The blockchain intelligence company stated that these Russian paramilitary groups have also used social media to explain to the public how their crypto donations are used.
Chainalysis also confirms that the donations are mostly not large amounts of money but they are significant enough to influence the war through these militias. Chainalysis explained further that because the Russian Ruble has lost considerable value due to the war effort and economic sanctions, cryptocurrencies are the perfect hedge against inflation which can drastically improve Russia’s effectiveness during the war.
Paramilitary organizations in Russia have been using cryptocurrencies to evade international economic sanctions. Over 11% of the donations passed through obfuscation processes like coin mixers. In addition, Chainalysis revealed that Pro-Russian organizations laundered almost $1 Million through a local cryptocurrency exchange called Bitzlato.
However, the amount of donations the Russians have received is minute when compared to the amount being donated to Ukraine. The Ukrainian government has raised over $100 Million through cryptocurrencies and NFT sales since March. These donations influenced Ukrainian President Volodymyr Zelensky to legalize the use of cryptocurrencies in the country. This is the opposite of what Russian President Vladimir Putin has decreed as he has banned the use of cryptocurrencies in Russia to pay for goods and services.
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