On July 29, Chainalysis released a report indicating that several pro-Russian groups had raised more than $2 million in cryptocurrency donations (Bitcoin and Ethereum on top) to fund the war.

According to speakChainalysis identified a total of 54 pro-Russian organizations that received more than $2.2 million in Bitcoin, Ethereum, Tether, Litecoin, and DOGE to provide equipment and logistics to paramilitary groups in Ukraine’s Donbas region.

Russians are exploiting cryptocurrencies:

According to Chainalysis, cryptocurrency donations received by pro-Russia groups are being used to purchase weapons, drones, flak jackets, communication devices and other military supplies.

Blockchain data analytics firm Chainalysis explains that paramilitary groups have used social media to show how they use crypto donations to buy weapons.

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For example, the report cited a statement from a pro-Russian social media account requesting money to purchase a drone:

We only have 150 thousand rubles left to collect for the purchase of a drone that will be able to deliver gifts to the sites of our Ukrainian friends.

We hope we can shoot it on video and it will delight you with interesting shots.

Similarly, other groups have publicly demonstrated their purchases of medical equipment such as first aid kits and medical bags.

Chainnalysis notes that despite not receiving large sums of money, Russian groups have benefited from cryptocurrencies.

Chainalysis explains that although the total amount received by Russian groups is small, it can greatly improve Russia’s effectiveness during the war because the ruble (Russia’s domestic currency) has largely lost its value.

Cryptocurrencies are a hedge against inflation and devaluation of weak fiat currencies.

Cryptocurrencies help Russia evade US sanctions:

According to Chainalysis, paramilitary organizations have used cryptocurrencies to evade international sanctions.

Over 11% of all donations were passed through blackouts such as cryptocurrency mixers.

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Additionally, Chainalysis revealed that pro-Russian groups laundered nearly $1 million via a local trading platform called Bitzlato.

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Likewise, the Chainalysis report notes that the increase in pro-Russian groups receiving donations through cryptocurrency suggests that they may be coordinating their actions to achieve their ends.

On the Ukraine side, thanks to the donations received by Ukraine, and its record adoption in the country, the head of state, Volodymyr Zelensky, legalized the use of cryptocurrencies.

This differs significantly from the recent move by the President of Russia, which banned the use of cryptocurrencies in the country to pay for goods and services.

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