Cryptocurrency has played a significant role in the ongoing conflict between Russia and Ukraine, with millions of people in both countries turning away from traditional fiat currencies and avoiding banks for their transactions.
Notably, both the Russian and Ukrainian militaries have embraced the use of cryptocurrencies to fund their operations. While Ukraine has been more successful in attracting cryptocurrency payments, the Russian military has also managed to raise substantial amounts through crypto in recent times.
On June 28, Elliptic, a prominent research firm, published a report revealing that the Russian military has successfully received funds through cryptocurrency. According to Elliptic’s findings, the Russian military’s cryptocurrency fundraiser has attracted around $20 million so far, with the majority of the funds paid in Bitcoin. This surge in cryptocurrency funding comes as NATO allies have started imposing sanctions on new Russian financiers.
Elliptic’s research team discovered that pro-Russian crypto donations amount to approximately $20 million, which is considerably less than what Ukraine has raised. The various Russian entities that received crypto include US-sanctioned entities that raised around $10.6 million, the military fundraiser that raised approximately $7.7 million, entities under investigation by Ukraine that raised around $1.1 million, disinformation channels that raised $0.4 million, cybercriminal groups that raised around $0.2 million, NFT collections worth approximately $0.1 million, and humanitarian groups that raised around $36,000. In total, these entities raised around $19.8 million, significantly less compared to Ukraine’s fundraising efforts.
Since the war began in February 2022, the Russian military and various fundraisers have managed to raise only $4.2 million. In contrast, the Ukrainian military raised a total of approximately $212 million through cryptocurrency payments.
In February 2023, another report revealed that around $70 million in crypto donations had been raised to support Ukraine during the war, with the majority of donations made in Bitcoin and Ethereum. Additionally, some donations were made in the form of non-fungible tokens (NFTs). One notable example was the auction of a Ukrainian flag NFT, which raised approximately $6.5 million for the country.In response to organizations attempting to raise funds for Ukraine’s armed forces, Russia’s Federal Security Service (FSB) has implemented a new rule. This rule stipulates that individuals who try to support Ukraine’s war using cryptocurrency or any other means can face imprisonment for 12 to 20 years.