Ukrainian groups have also raised crypto donations, but at a much higher rate. Cryptocurrency is funding both sides of the Russia-Ukraine war.
According to a report by Chainalysis, over 54 pro-Russian volunteer organizations have collectively raised $2.2 million in cryptocurrency donations for war efforts in Ukraine.
According to blockchain analytics company, the majority of funds were sent in Bitcoin ($1.45million) and Ethereum ($590,000), but there was also significant amounts sent in Tether and Litecoin. The majority of funds were given to a handful of top organizations, with one account receiving more than $1 million in crypto.
Chainalysis stated that social media posts by the groups suggest that large amounts of these funds are being used for paramilitary organizations. According to the report, about half of accounts that collect donations have solicited support from militias in Donetsk or Luhansk–territories sanctioned under the Office of Foreign Assets Control.
U.S. politicians such as Senator Elizabeth Warren raised concerns earlier in the year about Russia using crypto to bypass sanctions. Chainalysis today identified a pro-Russian group that claims to be doing just that. Project Terricon, a group that solicits donations in crypto for support of Russian militia groups, “explicitly declares on their website that they use cryptocurrency because of the imposition sanctions,” according to the report.
Jony Levin , Chainalysis’ co-founder, argued in March that crypto could not be used to evade sanction. Large amounts, such as $1 billion, could be easily tracked on public blockchain networks. However, the report by crypto-tracing firm today suggests that small crypto donations may be possible and even desirable for sanctioned entities.
Chainalysis reports that the $2.2 million Russian groups received is still far less than the millions of donations to Ukraine’s war effort in March. Alex Bornyakov (Deputy Minister of Ukraine’s Ministry of Digital Transformation) has solicited crypto donations publicly since the beginning of the war.
Crypto analytics firm Elliptic put the total amount raised by Ukrainian groups through crypto donations at $64 Million as of March. However, Bornyakov said that it was close to $100 million at the time.