For the first time, the Security Service of Ukraine (SBU) has implemented a mechanism to restrict fundraising via cryptocurrency for the forces fighting on the Russian side in the recent hostilities in the country. The dispute escalated into an unreduced war when the Russian troops infiltrated the borders of Ukraine later this February, which Moscow called a “special military operation” in support of the pro-Russian breakaway regions of Luhansk and Donetsk.
In a press release organized on Tuesday, the SBU announced that a crypto wallet operated by someone in the Russian Federation and used to financially support the military effort of Russia in Ukraine had been restrained. The man, who introduced himself as a volunteer, had been collecting money for the requirements of the Russian forces since the beginning of the invasion.
The wallet had gathered digital currencies worth 800,000 hryvnias (approx $22,000 at present rates) by the time it was restricted, the SBU said, adding that the amounts have since been seized. Experts are now working to track the related transactions and transfer custody to Ukraine. The agency did not give particulars on how it seized the wallet but revealed that foreign crypto companies assisted it.
Ukrainian investigators have established that the wallet’s owner devoted a significant portion of the donated crypto to purchase military supplies for the separatist fighters of the self-proclaimed Luhansk and Donetsk People’s Republics. Representatives of the National Police of Ukraine and the Prosecutor General’s Office also participated in the operation.
The Russian activist has been seeking financial help on social media platforms since the late phase of the dispute started. To promote this, the person has been creating and posting photos and video content regularly, distributed posts published by fellow activists, and alleged the use of the gathered funds, the SBU explained, without exposing the Russian’s identity.
The blockchain forensics firm Chainalysis reported last month that 54 pro-Russian groups have altogether collected more than $2.2 million worth of cryptocoins. The organizations, based out of Donetsk and Luhansk, attained most of the donated funds in bitcoin (BTC), ether (ETH), and other digital currencies.
Ukraine has been relying on crypto donations, with the government in Kyiv and volunteer groups raising digital money to fund defense efforts. Ukraine’s Minister of Digital Transformation, Mykhailo Fedorov, shared on Twitter that $54 million worth of crypto funds fathered through the Aid For Ukraine initiative have been drained to purchase body armor, night sights, medicines, and even vehicles for the Ukrainian forces.
The people in Ukraine have also received purely humanitarian help from the crypto community and industry. European crypto exchange Whitebit, which has Ukrainian roots, supported Ukrainian refugees through its overseas representative offices. The largest crypto trading platform in the world, Binance, issued a dedicated crypto card for Ukrainians who were forced to leave their homes.
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