As Russia’s war in Ukraine enters its sixth month, much of the active fighting has become concentrated in the Donbas region of eastern Ukraine, where Russian forces are accompanied by various militia groups and emboldened by war propaganda. A number of volunteer groups and their supporters have taken to social media to crowdfund military purchases and the spread of disinformation by soliciting cryptocurrency donations.
Since the start of the war, we’ve identified 54 such organizations that have collectively received over $2.2 million worth of cryptocurrency, primarily from Bitcoin and Ether donations. Considerable quantities of Tether, Litecoin, and Dogecoin have been sent as well.
As we’ll explore later, social media posts from the groups indicate that a large portion of these funds are being used to equip paramilitary groups. Roughly half of the donation-collecting accounts have publicly solicited support for militias located in the Donbas region of Ukraine, specifically Donetsk and Luhansk – two territories subject to comprehensive OFAC sanctions as of February 22.
Most of the cryptocurrencies donated thus far have been sent to just a few organizations in particular. However, many more have received still-considerable sums. Five organizations have received over $100,000, 17 have received over $10,000, and 35 have raised more than $1,000 worth of cryptocurrency.
How the crypto donations are being spent
The crypto donations sent to these organizations have reportedly been used to support everything from the financing of pro-Russian propaganda sites to the purchase of military items, like drones, weapons, bulletproof vests, communication devices and various other supplies.
The accounts that support militias often publish pictures of the purchased equipment and descriptions of how future donations will be used. Here is one such post (translated from Russian):
… we have only 150 thousand rubles left to collect for a drone that will be able to bring “gifts” to the positions of our Ukrainian “friends.” We hope that we will be able to shoot it on video and delight you with interesting shots.
Sometimes the posts even itemize the purchases, as this one does:
Hello dear friends! We once again brought a consignment of cargo to our fighters. Our car arrived on July 16, but the report is being written only now, since we did not have time and communication. This time we brought:
- 2 pcs. collimator sight – 27,000 r;
- 7 pcs. medical pouches – 6,500 rubles;
- medicines for first-aid kits – 9,500 rubles;
- 1 PC. satellite dish – 20,000 r;
- payment for a satellite sanctuary – 2,500 rubles;
- 3 pcs. satellite SIM cards – 63,000 rubles;
- 10 pieces. canisters for cleaning weapons (5.45 mm and 7.62 mm) – 3,000 r;
- weapon grease – 3,000 r;
- 3 pcs. mobile inflatable mattresses – 5,000 r;
- 7 pcs. lanterns – 16,000 rubles;
- 15 pcs. handheld radios – 38,000 r;
- 2 pcs. car radios – 17,500 rubles;
- UAV components – 200,000 rubles;
- 3 pcs. radio-controlled cars – 17,000 rubles.
With one ruble valued at less than $0.02, the components required to construct a UAV – a big upgrade to a unit’s reconnaissance capabilities – cost this group only $3,400. Similarly, 15 radios cost only $630. So while many of the organizations we looked at in the last section have only reached the low four figures from cryptocurrency fundraising, those funds could still make a significant contribution to those militias’ effectiveness.
Donation links to sanctioned individuals and entities
Our investigators identified a number of sanctioned entities that have promoted the collection of cryptocurrency donations in support of Russia’s war in Ukraine.
Alexander Zhuchkovsky, an OFAC-designated Russian national, has used social media to solicit donations for the Russian Imperial Movement, a Specially Designated Global Terrorist group. Recently, Zhuchkovsky also posted support for Project Terricon, which is soliciting cryptocurrency donations to support Donbas militia groups. Terricon explicitly states on their website that they are using cryptocurrency due to the imposition of sanctions, and have even offered several NFTs for fundraising. However, no bids were placed before they were removed from the NFT marketplace where they were listed.
Terricon’s on-chain exposure reflects its illicit nature. The organization has received roughly 11% of its funds indirectly from mixers and sent over 29% of its funds to Bitzlato – a Moscow City-headquartered exchange that has facilitated approximately $1 billion worth of crypto money laundering since 2019.
Our investigators have identified other potential sanctions affiliations to donation accounts as well.
Posts from Rybar – a pro-Russian military blog that publishes information about the Russian offensive – have been re-shared by a wide range of pro-Russian social media accounts, including the Union of Donbas Volunteers, which was sanctioned by OFAC on June 28, 2022.
Multiple social media account operators have indicated that donations sent to them will directly benefit the Donetsk People’s Militia and Luhansk People’s Militia, which appear to be affiliated with the Donbas People’s Militia, an organization sanctioned by OFAC on December 19, 2014.
Rusich, a paramilitary group that has been associated with PMC Wagner, among other sanctioned entities, has raised thousands of dollars in cryptocurrency donations thus far. Its donation addresses have been circulated across multiple social media accounts.
SouthFront, a Russian disinformation site that was sanctioned by OFAC on April 15th, 2021, has continued to promote war propaganda and solicit crypto donations.
Several of the donation addresses identified by Chainalysis have also been cross-promoted across multiple channels, including some operated by sanctioned actors, suggesting a potential degree of coordination among these groups.
Monitoring the situation
While significant, the $2.2 million worth of crypto donated to pro-Russian organizations still pales in comparison to the tens of millions in crypto donated to Ukraine. Furthermore, because public blockchains are transparent, we can follow each transfer in these accounts’ chains of payments, gleaning insights into pro-Russian activities that would be harder to extract from fiat money investigations.
We will continue to work with our partners in the public and private sectors to track these accounts and add new ones as they are identified. We will also continue to pay close attention to further indicators of Russian sanctions evasion and cryptocurrency-based money laundering. Sign up for our newsletter at the bottom of this page or follow us on Twitter to stay tuned.
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