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Ukraine Blocks Cryptocurrency Wallet Used to Raise Funds for Russian Forces

Ukraine’s law enforcement and counterintelligence agency managed to seize funds in a cryptocurrency wallet used to finance the Russian military campaign in the country. Kyiv officials say the money raised through the wallet was spent on military equipment for pro-Russian separatist forces in the east.

Ukraine Seizes Cryptocurrency Donations Funding Russian Invasion

The Security Service of Ukraine (SBU) has for the first time implemented a mechanism to curb fundraising through cryptocurrencies for troops fighting on the Russian side in the ongoing hostilities in the country. The conflict turned into a full-scale war when the Russian army crossed the border into Ukraine in late February in what Moscow calls a “special military operation” in support of the pro-Russian breakaway regions of Luhansk and Donetsk.

In a press release on Tuesday, the SBU announced that a cryptocurrency wallet operated by a citizen of the Russian Federation and used to sponsor Russia’s military effort in Ukraine was blocked. The man, who volunteered, has been raising money for the needs of the Russian forces since the invasion began.

The wallet had accumulated digital coins worth 800,000 hryvnia (nearly $22,000 at current exchange rates) by the time it was blocked, the SBU said, adding that the funds had already been seized. Experts are now working to trace related transactions and transfer custody to Ukraine. The agency did not specify how it seized the wallet, but did reveal that it enlisted the help of foreign cryptocurrency companies.

Ukrainian investigators were able to establish that the owner of the wallet dedicated a significant part of the donated cryptocurrency to the purchase of military supplies for separatist fighters of the self-proclaimed Luhansk and Donetsk People’s Republics. Representatives of the National Police of Ukraine and the Public Ministry also participated in the operation.

Russian “volunteer” active on social media

The Russian activist has been actively seeking financial assistance on social media platforms since the beginning of the latest phase of the conflict. To promote his efforts, he regularly creates and publishes photo and video content, distributes publications published by partners and reports on the use of the funds raised, the SBU detailed without revealing the identity of the Russian.

A report by blockchain forensics firm Chainalysis last month revealed that 54 pro-Russian groups have collectively received more than $2.2 million in cryptocurrency. These organizations, which operate in Donetsk and Luhansk, received most of the donated amounts in bitcoin (BTC) and ether (ETH), but also in other cryptocurrencies.

Ukraine itself has relied on cryptocurrency donations, with the Kyiv government and volunteer groups raising digital money to fund defense efforts. Ukraine’s Minister of Digital Transformation Mykhailo Fedorov recently announced on Twitter that $54 million in cryptocurrency funds raised through the Aid for Ukraine initiative were spent to purchase armor, medicine, night visions, and even vehicles for the Ukrainian military.

The Ukrainian people have also received purely humanitarian aid from the crypto community and industry. European cryptocurrency exchange Whitebit, which has Ukrainian roots, has offered to support Ukrainian refugees through its representative offices abroad, and the world’s largest forex trading platform Binance has issued a card. of cryptocurrencies special for Ukrainians forced to leave their homes.

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