Russian Crowdfund Gun Groups Buy Via Crypto on Telegram: Study

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Photo: Paula Bronstein (Getty Images)

Ever since Russia invaded Ukraine last year, cryptocurrency has played a surprisingly big role. As a new fundraising tool, crypto has helped Ukraine raise millions of dollars as it seeks to supplement the already gargantuan amount of money flowing into the country through official US aid and a constellation of charities. Russia, meanwhile, doesn’t seem as interested in digital assets, although new research shows that pro-Russian groups are using digital assets to raise money for separatist movements in Ukraine. While Ukrainian crypto activities have been largely sanctioned by the government itself, these fundraisers for Russia have occasionally turned to more shady tactics.

Shady Russian Crowdfunding Efforts

A study published Tuesday by blockchain security firm CertiK shows that some pro-Russian web groups are using cryptocurrency as a means of crowdfunding for Russian soldiers. Much of the money is used to finance purchases of weapons, equipment and supplies, according to CertiK. These informal fundraising tactics are pushed by clusters of Telegram channels, which are used to promote crypto wallet addresses, namely Bitcoin and Ethereum. Researchers write that…

After Russia’s exclusion from the global financial system, pro-Russian groups had to turn to other ways of financing the war effort. Cryptocurrency has been one such avenue. The public nature of transactions on the Ethereum and Bitcoin networks makes these flows traceable, which can help identify the source and destination of funds, as well as the groups and individuals involved.

Another recently published report, from blockchain analytics firm Elliptic, also notes that the most widely observed use of crypto-assets by Russian separatist groups is to procure and supply lethal and non-lethal military hardware to Russian soldiers and mercenaries. These groups tend to promote pages with links to crypto addresses and statements about how the funds will be used.

Despite their limited volume, separatist fundraisers often have a connection to cybercrime, sanctioned entities, or entities that openly advocate or glorify potential violations of international law. Black markets are the fourth known source of donations to pro-Russian fundraising campaigns. A significant portion of the donations, however, came from mixers, with smaller amounts coming from similar obfuscation protocols such as privacy wallets and coin exchange services…

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It is not only physical ammunition that is funded, but also digital ammunition. According to CertiK and Elliptic, a number of chains have been seen being crowdsourced for the pro-Russian hacktivist collective Killnet. Since the start of the war, Killnet has been responsible for launching what most security analysts consider to be harmful attacks against targets allied with Ukraine. The hacker group primarily uses DDoS attacks to target NATO and Western-aligned websites, including those belonging to airports, media companies and healthcare organizations. A number of Telegram channels were seen promoting wallet addresses or content for the hacking group, writes CertiK.

Crypto fundraising rush in Ukraine

In contrast, crypto fundraising in Ukraine has been enthusiastic and continuous. It even has a DAO. Research shows that digital assets have flowed into the country from a number of different organizations and sources. The Ukrainian government has also welcomed crypto donations in a number of different formats. In particular, the Aid for Ukraine campaign, an official charity, offers its own crypto donation option for donors. Elliptic reports that the Ukrainian government has raised tens of millions of dollars through direct donations of crypto assets.

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