December 9, 2023

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Pro-Russian groups are raising funds in cryptocurrency to fuel paramilitary operations and war with Ukraine wage war to evade US sanctions, a research report published on Monday revealed.

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

Research has shown that groups using the encrypted messaging app Telegram are offering people ways to send money, which can be used to supply Russian-affiliated militia groups and support combat training in locations close to the border with Ukraine. is done to.

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One group TRM Labs identified as raising funds is Task Force Rusich, which the US Treasury describes as a “neo-Nazi paramilitary group that has participated in the war with Russia’s military in Ukraine.” The Treasury Department’s Office of Foreign Asset Control (OFCA) has approved Task Force Rasich.

On a Telegram channel, TRM Labs found that the group is looking to raise funds for items such as thermal imaging equipment and radios.

The report says the Novorossia Ad Coordinating Center, which was established in 2014 to support Russian operations in Ukraine, raised about $21,000 in cryptocurrencies, primarily bitcoin, with the aim of buying drones.

Russia was subjected to a series of sanctions after an unprovoked invasion of Ukraine earlier this year aimed at isolating it from the global financial system. At the time, there were concerns that Russia might use cryptocurrencies to evade these penalties. However, experts said that the crypto system does not have enough liquidity on the scale that Russia would need to move money.

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

According to Ari Redbord, Head of Legal and Government Affairs at TRM Labs, these groups are using exchanges that do not necessarily comply with anti-money laundering and other regulations.

“They are probably using non-compliant exchanges to lock those funds [into fiat currency]RedBoard told CNBC.

“And you can do it. You can’t do it on a large scale. And I think that’s where … we’ll say, will there be more? Of course, there will be more. But will it be billions of dollars? ? Highly unlikely.”

Redboard said TRM Labs conducted a combination of publicly available wallet addresses as well as other websites and activities online to identify Russian-linked groups. However, he said it was not possible to know whether these groups were working with the Russian government or supported by the Kremlin in any way.

Cryptocurrency has been in the limelight during the war between Russia and Ukraine. Ukraine is asking for donations through digital coins, which can be quickly sent around the world. But now they are also being used by Russian paramilitary groups.

“I think an interesting part of this story is that crypto is a form of payment in these cases. It’s a way to move money. And one example of that being used for good and that’s an example of this. The context is being used for bad,” Redbord said.