Groups supporting Russia’s war effort in Ukraine have been actively collecting cryptocurrency to fund paramilitary operations and evade sanctions, researchers say. According to a new report, these organizations use Telegram to raise money then used to pay for equipment and training.
Paramilitary Groups Employ Cryptocurrency to Fund Russian Operations in Ukraine
Pro-Russian groups have reportedly raised a serious amount of cryptocurrency for Russia’s military activities in Ukraine, circumventing U.S.-led sanctions. According to a study carried out by the digital asset compliance and risk management firm TRM Labs, the total had reached $400,000 as of Sept. 22, CNBC reported on Monday.
The study unveiled that these organizations were using the popular encrypted messaging app Telegram to offer supporters options to send funds, which were later spent to purchase supplies for Russian-affiliated militia groups and pay for their combat training at locations near the Ukrainian border.
One of these, Task Force Rusich, has been labeled by the U.S. Treasury as a “neo-Nazi paramilitary group that has participated in combat alongside Russia’s military in Ukraine.” The department’s Office of Foreign Assets Control (OFAC) has placed it under sanctions. It was trying to raise money for items such as thermal imaging equipment and radios on a Telegram channel.
Another group identified by TRM Labs, the Novorossiya Aid Coordinating Center, raised about $21,000 in cryptocurrency, mainly bitcoin (BTC), with the aim of buying drones, the report added. The organization was established in 2014 to support Russian operations in Ukraine.
The findings come amid mounting sanctions against Russia over its decision to attack Ukraine in late February, which have severely limited its access to the global financial system. The Russian government is now working to legalize crypto payments for international settlements in order to circumvent the restrictions.
Crypto Said to Lack Liquidity for Large-Scale Russian Transactions
While the crypto space may not have the sufficient liquidity Russia would need to move large sums of money, as experts have pointed out, it has enough to allow paramilitary groups to make transfers for the items they need to acquire. Ari Redbord, head of legal and government affairs at TRM Labs, elaborated:
They’re probably using non-compliant exchanges to off-ramp those funds… Of course, there’ll be more. But will it be billions of dollars?…
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