Pro-Russian paramilitary groups are raising bitcoin (BTC)and other cryptoassets to fund their operations and evade sanctions as the invasion of Ukrainecontinues, reported CNBC, citing a research report published Monday by TRM Labs, a digital asset compliance and risk management company.

From the start of the invasion on February 24 this year until September 22, these groups had raised $400,000 in cryptocurrency, the report claimed.

The groups are using the encrypted messaging app Telegram to offer ways in which supporters can send funds. This money is then used to supply Russian-affiliated militia groups, as well as to support combat training close to the border with Ukraine, said the report.

Ari Redbord, head of legal and government affairs at TRM Labs, told CNBC that these groups are “probably using non-compliant exchanges to off-ramp those funds [into fiat currency],” referring to crypto exchanges that are less compliant with anti-money laundering (AML) and other regulations.

As they are raising smaller amounts of money, it is easier to move the funds – which helps their effort to avoid various sanctions, Redbord said, adding that,

“You just can’t do that at scale. And […] will there be more? Of course, there’ll be more. But will it be billions of dollars? Highly unlikely.”

He argued that,

“I think an interesting part of this story is that crypto is just a form of payment in these cases. It’s a way to move funds. And there’s an example of it being used for good and example of it being used for bad in this context.”

Task Force Rusich, a group sanctioned by the Treasury Department’s Office of Foreign Assets Control (OFCA), is one of these organisations identified by TRM Labs. They are asking for funds that they will spend on items such as radios and thermal imaging equipment.

On its website, the US Treasury included Task Force Rusich back in September on the list of designated individuals and entities that are facilitating Russia’s aggression in Ukraine, saying that,

It is “a neo-Nazi paramilitary group that has participated in combat alongside Russia’s military in Ukraine, as well as two of its senior leaders.”

Another named entity is the Novorossia Aid Coordinating Center, which raised some $21,000 in crypto, mostly in BTC, for buying equipment – specifically drones, said the report.

While TRM Labs used publicly available wallet addresses, while cross-checking websites and activity online to identify the Russian-linked groups, Redbord said that it’s impossible to know if these groups were working with the Russian government or were somehow backed by it.

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