A report by Chainalysis takes a closer look at the role of crypto in Russia’s war on Ukraine.

Crypto crowdfunding has facilitated Russian military purchases worth millions of dollars.

The majority of the crypto received by pro-Russia groups was stored in centralized crypto exchanges.

A recent report by blockchain intelligence firm Chainalysis took a closer look at the role of cryptocurrencies in the war between Russia and Ukraine. One year into the Russian invasion of Ukraine, it has become clear that crypto’s cross-border payment utility is being leveraged to circumvent sanctions imposed by the United States and the European Union.

According to Chainalysis’ report, pro-Russian groups and war sympathizers have been soliciting donations for more than a year now. These donations are often in the form of cryptocurrencies. The report found that within five months of the invasion, as many as 54 volunteer groups had received nearly $2.2 million in crypto donations to fund Russian military purchases.

The report mentions that figure has since climbed to $5.4 million, sent to more than 100 pro-Russian organizations that are using the funds to create pro-invasion propaganda and spread misinformation. Additionally, this includes Task Force Rusich, a sanctioned Russian paramilitary organization that is currently operating in Ukraine.

The data compiled by Chainalysis shows that crypto donations are often diverted to high-risk crypto exchanges, which include sanctioned and blacklisted exchanges. However, the majority of the crypto assets are stored in mainstream centralized crypto exchanges. High-risk exchanges accounted for just 4.4% of the crypto assets.

Significantly, the sanctions imposed on Russian entities and high-profile individuals had led to speculation about crypto being used to evade said sanctions and transfer money out of the country. However, Chainalysis’ report found that the crypto markets did not have the required liquidity to support the billions of dollars in transactions that would be made to evade the sanctions.

As per the report, Russia’s war on Ukraine seems to have intensified the ransomware campaigns operated by bad actors in Russia. These groups made away with the majority of the $456 million ransomware payments last year. Importantly, one particular Russian ransomware group called Conti reportedly saw $66 million in ransomware payments in 2022.

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