Weaponry and cyberwar: How Bitcoin funds anti-Russia efforts in Ukraine

In Ukraine, activists use Bitcoin to develop weaponry, fund cyberattacks, and create facial recognition apps to spot Russian "war criminals."

Bitcoin donations to Ukraine’s non-governmental organizations (NGOs) and volunteer groups rose 900% last year, as the country bolstered defenses over fears of Russian incursion, found analytics unit Elliptic.

Russia continues to deny a planned invasion despite around 100,000 troops reportedly stationed within reach of the Ukraine border.

According to Elliptic, Bitcoin and other cryptocurrencies have become a key fundraising method for groups essential to previous Ukraine conflicts.

Bank wires and payment apps remain the main income source for Ukrainian NGOs and other groups. So, Bitcoin and crypto gifts have risen as donors look to preserve privacy and avoid censorship.

Elliptic said Bitcoin wallets tied to those groups received just over $570,000 in BTC throughout 2021, a sharp increase from the $6,000 raised in the previous year.

“We found that financial institutions had closed accounts belonging to these fundraising campaigns. This cannot happen with a crypto wallet,” said the firm.

“Cryptocurrency is also particularly suited to cross-border donations, allowing easier access to wealthy overseas donors.”

Crypto-powered cyberwarfare

Russian President Vladimir Putin this week more-or-less promised war with the West should Ukraine join the North Atlantic Treaty Organisation (NATO).

But a significant amount of modern global warfare happens in cyberspace. Cyber-activist collective Ukrainian Cyber Alliance (UCA) depends entirely on crypto donations.

UCA hacktivists have waged war online since 2016, launching cyberattacks on Russian targets: pro-Russian propaganda websites, government sites, and individuals. It shares the information it gathers with Ukrainian authorities.

Last year, they’ve received nearly $100,000 in Bitcoin, Ether, Litecoin, and stablecoins, noted Elliptic, while hacktavists north of the border in Belarus have made $84,000 from Bitcoin donations in six months.

The Belarussian Cyber-Partisans work to disrupt movements of Russian troops headed to the Ukrainian border.

In January, the Cyber-Partisans launched a ransomware attack on the Belarussian rail network. Unlike Russian ransomware groups, this group demands release of political prisoners and an end to Moscow’s troop deployment along the border.

Ransomware, but for political prisoners rather than Bitcoin.

There’s also a doxxing crew, the Myrotvorets, which outs pro-Russian individuals with links to activity in Ukraine.

The Myrotvorets website hosts a public database of personal information belonging to those deemed to war criminals, mercenaries, as well as pro-Russian propagandists and journalists.

The group has raised $268,000 across 100 Bitcoin donations in total.

  • Researchers found the group had received a spike in Bitcoin donations during fundraising for its “IDentigraf” project, a facial recognition app allowing users to cross-check identities with its database.
  • The Myrotvorets reportedly ramped up pleas for crypto after PayPal closed its account and withheld donated funds.
  • They remain somewhat controversial following the 2015 murder of Ukrainian writer and legislator days after their home addresses appeared on the Myrotvorets database.

Still, the Myrotvorets continue to find global support through Bitcoin. It claims to have received contributions from folks in 40 countries.

Bitcoin helps develop Ukraine’s military defenses

Some Ukrainian activists operate in hardcore reality. Come Back Alive donates military equipment to the Ukrainian army; the group takes its name from inscriptions on the bulletproof vests it first gave in 2014.

The Kyiv-based entity has accepted cryptocurrency since 2018. It’s now received upwards of $200,000 thanks to a surge in Bitcoin donations last year.

Combined with traditional methods of donations, Come Back Alive contributes to training and the purchase of medical supplies and military equipment

The group also funded development of a reconnaissance and targeting system that utilizes drones.

Speaking to Reuters, Come Back Alive said it had raised nearly $167,000 from 14 crypto donations since August, which it’s yet to spend.

“We have made a Bitcoin wallet because people keep asking for it, and we want to give opportunities for everyone to support us comfortably,” said the organization (via Reuters).

Ukrainian soldiers with equipment donated by Come Back Alive (source: Elliptic).

Read more: [Navalny nets steady stream of Bitcoin donations during prison camp stint]

Indeed, Bitcoin continues to fund anti-Putin sentiment. Jailed political opponent Alexei Navalny has been drip fed Bitcoin by supporters since 2016.

  • Protos found Bitcoin addresses controlled by Navalny’s team netted around 9 BTC ($404,000) in the past year.
  • Navalny, who Time called “the man Putin fears,” has received well over 700 BTC in total.
  • That Bitcoin stash would be worth over $30 million had it been held until today.

Blockchain data shows Bitcoin is quickly taken out after it’s donated, but it’s not clear exactly what Navalny’s team does with it after withdrawal.

All this while Moscow attempts to take control of crypto activity within Russia.

On Tuesday, a document appeared on the Russian government website outlining plans for sweeping crypto regulations, including strict know-your-customer checks and declarations for transactions over $8,000.

Refusing to report transactions above that limit would be considered a criminal offence — a likely tool for clamping down on Russia-based activists using Bitcoin.

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