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Pro-Russian parties are collecting funds in crypto

Pro-Russian parties are collecting funds in crypto

October 4, 2022: -Pro-Russian groups are collecting funds in cryptocurrency to prop up paramilitary operations and evade U.S. sanctions as the war with Ukraine salary on, a research report written on Monday indicated.

As of September 22, these fundraising groups had raised $400,000 in cryptocurrency since the start of the invasion on February 24, according to TRM Labs, a digital asset compliance and risk management company.

The research revealed that groups using the encrypted messaging app Telegram are offering ways for people to send funds to supply Russian-affiliated militia groups and support combat training at locations close to the border with Ukraine.

One group TRM Labs identified increasing funds is Task Force Rusich which the U.S. Treasury explains as a “neo-Nazi paramilitary group that has participated in combat alongside Russia’s military in Ukraine.” The Treasury Department’s Office of Foreign Assets Control (OFCA) has sanctioned Task Force Rusich.

On a Telegram channel, TRM Labs discovered this group was looking to increase money for items like thermal imaging equipment and radios.

The report said that the Novorossia Aid Coordinating Center, set up in 2014 to support Russian operations in Ukraine, raised almost $21,000 in cryptocurrency, mainly bitcoin, intending to buy drones.

Some sanctions hit Russia after its unprovoked invasion of Ukraine that aimed to cut it off from the global financial system. Similarly, there were concerns that Russia could use cryptocurrency to evade these penalties. Therefore, experts said there is insufficient liquidity in the cryptosystem on the scale Russia would require to move money.

But the paramilitary groups are moving money on a smaller scale, which is enough for the items they need to buy.

These groups are using exchanges that don’t necessarily comply with anti-money laundering regulations, according to Ari Redbord, head of legal and government affairs at TRM Labs.

Redbord says that TRM Labs used a combination of publicly available wallet addresses and cross-checking other websites and activities online to identify the Russian-linked groups. However, he did say it’s impossible to know whether these groups were working with the Russian government or were backed by the Kremlin.

Cryptocurrencies are being thrust into the spotlight during the Russia and Ukraine war. Ukraine seeks donations via digital coins, which can be sent quickly worldwide. But they’re also being used by Russian paramilitary groups.

“I think an actual part of this story is that crypto is just a form of payment in these cases. It’s a way to move funds. And here’s an instant of it being used for good and bad in this context,” Redbord said.

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Pro-Russian parties are collecting funds in crypto