The ongoing conflict between Russia and Ukraine has taken on a new dimension with the use of cryptocurrencies. Both sides of the conflict have leveraged digital currencies to gain the upper hand in the war effort. In this article, we explore how crypto has been used by the opposing forces to achieve their objectives.
Crypto Donations for Ukraine
Pro-Ukraine causes have been able to collect approximately $200 million from crypto donations. This demonstrates how borderless and uncensorable money can be helpful during times of emergency. The ability to donate without any limitations imposed by financial institutions has made it possible for people from around the world to contribute to the cause.
Pro-Kremlin Groups and Propaganda Outlets
On the other hand, pro-Kremlin groups and propaganda outlets have also used crypto to buy military supplies and spread propaganda. In the course of the invasion, a total of around $5 million was raised by these entities, as revealed by a recent report by Chainalysis. These small grassroots organizations have utilized crypto to bypass western financial sanctions.
Individual Actors on the Frontline
According to Andrew Fierman, head of Sanctions Strategy at Chainalysis and one of the authors of the report, the focus is on individual actors who are trying to provide more military resources to the front. These resources can range from bulletproof vests to drones. The use of crypto has enabled these actors to bypass traditional financial systems, allowing them to acquire resources needed to fight the war.
Ransomware Attacks
The use of ransomware attacks has also played a role in the conflict. Chainalysis data shows that in 2022, over $450 million was paid to these entities. The majority of these entities were believed to be based in Russia. Some of these groups, such as the cybercriminal group Conti, have openly supported the Russian government in its war effort.
Fierman points out that there are often political agendas behind ransomware payments. Bad actors may use ransomware attacks as a means of furthering their political objectives.
Conclusion
The use of crypto in the Russia-Ukraine conflict highlights the role that digital currencies can play in times of crisis. Both sides have utilized crypto to achieve their objectives, with pro-Ukraine causes using it to collect donations and pro-Kremlin groups using it to buy military supplies and spread propaganda. The ability to bypass traditional financial systems has made it easier for individual actors to provide resources to the frontlines. While ransomware attacks have also played a role in the conflict, it remains to be seen how this will impact the outcome of the war.
