In the Russia-Ukraine war, both sides of the conflict have used cryptocurrencies to gain the upper hand.
Pro-Ukraine causes have collected about $200 million from crypto donations, showing how unlimited and uncensorable money can be useful in times of emergency.
But the Russian side also took advantage of crypto: a total of about $5 million was raised by pro-Kremlin groups and propaganda outlets during the invasion, as revealed by a new Chainalysis report. These entities are small grassroots organizations that use crypto to bypass western financial sanctions.
“We’re really looking at individual actors. So the people who are on the front lines, the people who are trying to help put more military resources on the front lines […] like bulletproof vests or drones,” explained Andrew Fierman, head of Sanctions Strategy at Chainalysis and one of the authors of the report.
But these figures do not take into account ransomware attacks: As shown in Chainalysis data, in 2022, more than $450 million was paid to these entities, the majority of which are believed to be based in Russia. Some of them, like the cybercriminal group Conti, openly support the Russian government in its war effort.
“When it comes to ransomware payments, many bad actors have some sort of political agenda behind what they do,” Fierman said.
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