Pro-Russian groups raised nearly $400,000 in cryptocurrency to fund Moscow's war with Ukraine and evade US sanctions, report says

• Pro-Russian military groups raised nearly $400,000 in crypto to fund Moscow's war with Ukraine.
• The groups promoted donations via Telegram and used funds to purchase equipment like drones.

Pro-Russian groups raised hundreds of thousands of dollars in cryptocurrency to fund Moscow's war with Ukraine and evade US sanctions, according to research conducted by blockchain intelligence company TRM Labs.

The Monday report, viewed by Insider and first reported by CNBC, revealed groups used the encrypted messaging app Telegram to solicit donations in the form of tokens like bitcoin, ethereum, litecoin and tether, then purchased supplies for Russian-linked militias and supported combat training near the Ukraine border.

As of September 22, these groups raised $400,000 in cryptocurrencies since the start of Moscow's invasion of Ukraine, according to TRM Labs.

For example, "Task Force Rusich" — a neo-Nazi Russian paramilitary group sanctioned by the US — received over $144,000 in cryptocurrency since the start of the war and used that money to purchase items like radios and thermal imaging equipment. Meanwhile, other groups have supplied the Russian army with body armour and drones, per TRM Labs.

Since Russia's war with Ukraine, cryptocurrencies emerged as a way for Russian individuals and businesses to escape Western sanctions. In March, the volume of rubles being exchanged for crypto notched its highest point since May 2021.

In May, Russia's central bank said it's open to using cryptocurrency for international payments as a way to dodge Western sanctions, after previously calling for a ban on it. That's after the EU, the US, and other allies cut off Russia's access to half its more than $600 billion of foreign currency reserves and blocked Russian banks from Swift, the international financial messaging system.

According to TRM Labs, fundraising via cryptocurrencies to finance Russia's war is likely to persist.

"Sanctions and observed service disruptions to the Russian electronic banking infrastructure will likely lead to further adoption of cryptocurrency amongst Telegram channels fundraising for the invasion of Ukraine," TRM Labs said in its report.