Some of the most interesting crypto news in recent weeks has been coming out of Russia. The country, which has a short but very complicated history with digital assets, appears to be doing what many political commentators and finance experts alike have feared by embracing crypto as a way to avoid sanctions. Helping to evidence that today is news of the country’s military allies using crypto to pay for equipment directly used in its invasion of Ukraine.
Blockchain intelligence group TRM Labs released a report in mid-September on Russian paramilitary group Task Force Rusich. It was around this time the U.S. Office of Foreign Assets Control (OFAC) sanctioned crypto wallets associated with the group, alongside military groups based out of Iran. The report identifies Task Force Rusich as a Russian-founded neo-Nazi paramilitary group. The group is known for its brutality, and war crime accusations have followed it since its founding in 2014.
The group has played a sizable role in Russia’s invasion of Ukraine, which began earlier in the year. Since then, it has received more than $100,000 in crypto donations from around the world. These donations, sourced through Task Force Rusich’s Telegram channel, are used to pay for military equipment it is deploying within Ukraine to assist Russian forces. The activities have helped Russia fund military operations while subverting sanctions from much of the world.
Another report from TRM since the first shows groups like Task Force Rusich are only becoming more adept at sourcing these donations. Groups are using these funds to buy things like thermal vision technology and drones for Russian forces.
Crypto News: Pro-Russia Groups Just One Part of the Russia Crypto Problem
The crypto news out of TRM Labs is concerning from an international relations perspective. It’s a disturbing revelation to see pro-Russian forces sourcing funds in a relatively public way. However, it’s nothing new for investors who have been paying close attention to Russia’s shift in attitude toward crypto.
In July, Russian President Vladimir Putin had signed into law a bill banning crypto within Russian borders. Like neighboring China, Russia was looking at that time to exorcise digital assets entirely, and most government agencies took a hard stance against them.
However, in late August, Iran legalized crypto as a means for importing goods while skirting longstanding sanctions from western nations. Following the law’s signing, the country saw its first vehicle imports in years. Seeing this cue, several Russian government bodies reversed their stances, including the country’s central bank, its proprietary security agency and others.
By mid-September, it became very apparent the country has noticed Iran’s success in this endeavor. The head of Russia’s Finance Ministry publicly stated the body’s intention to produce and support legislation allowing Russian business to conduct international payments using cryptocurrency. Certainly, the news of Task Force Rusich and other groups successfully using the space to the same ends is helping to build support for this change.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
