Russia-Ukraine war: How both sides of the conflict have used crypto to win

While tens of millions worth of crypto were donated to Ukraine in the last year, pro-Kremlin groups have also leveraged digital currencies to buy military supplies and spread propaganda.

In the Russia-Ukraine war, both sides of the conflict have been leveraging cryptocurrencies to achieve the upper hand. 

Pro-Ukraine causes have collected around $200 million from crypto donations, showing how borderless and uncensorable money could be useful in time of emergency. 

But the Russian side has taken advantage of crypto too: a total of about $5 million was raised by pro-Kremlin groups and propaganda outlets in the course of the invasion, as revealed by a recent Chainalysis report. These entities are small grassroot organizations that have used crypto to bypass western financial sanctions. 

“We're really looking at individual actors. So somebody who's on the front, somebody who's trying to help provide more military resources to the front [...] things like bulletproof vests or drones,” explained Andrew Fierman, head of Sanctions Strategy at Chainalysis and one of the authors of the report.

But those numbers don’t take into account ransomware attacks: As shown in Chainalysis data, in the course of 2022, over $450 million were paid to these entities, the majority of which were believed to be based in Russia. Some of them, like the cybercriminal group Conti, have openly supported the Russian government in its war effort.

“When it comes to ransomware payments, a lot of the time bad actors have some sort of political agendas behind what they're doing,” Fierman pointed out.