Ukrainians are using bitcoin to crowdfund Russian war, says blockchain analyst

Ukrainian paramilitary groups have been fighting Russian-sponsored forces in the eastern part of the country at varying levels of intensity since the 2014 Russian invasion, but only recently have these groups begun to fund themselves with bitcoin donations, according to a Tuesday analysis published by blockchain analytics. firm Elliptic.

“These groups are funded by private donors, who have used bank wires and payment apps to donate millions of dollars,” the report says. Bitcoin BTCUSD,
-2.40%
has also emerged as an important alternative funding method, allowing international donors to bypass financial institutions that are blocking payments to these groups. ”

Elliptic identified a series of cryptocurrency wallets used by Ukrainian volunteer groups, which have received a total of $ 570,000 in bitcoin donations since the start of the conflict, with the vast majority of the donations being made in 2021.

Elliptic

Among the groups that have accepted bitcoin donations are Come Back Alive, which donates military equipment to Ukrainian fighters, the Ukrainian Cyber ​​Alliance, which Time Magazine described as “online shock troops in Ukraine’s conflict with Russia” and the Kiev-based organization Myrtvorets Center.

The Elliptic report says that Ukrainian groups are emulating techniques that the Russians have employed since the start of the war, when it launched online campaigns to raise money for pro-Russian seperatists in Eastern Ukraine, often using cryptocurrencies.

The report added that crypto donations still represent a small portion of donations received on both sides of the conflict but that “cryptocurrency has proved to be a robust and increasingly popular alternative.”

“Some of the Ukrainian volunteer groups and NGOs accepting crypto donations have very close links to the Ukrainian government – and this adds to a trend of nation states turning to cryptocurrency as a means of raising funds,” the report said. “Iran is using Bitcoin mining as a way to monetise its energy reserves, while North Korea is believed to be stealing cryptocurrency to support its missile development program.”

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