Areeba Rashid

How Crypto Became a Weapon in the Russia-Ukraine Rivalry: Report

AFU, Crypto News, Cryptocurrency, Digital Currency, Regulations

Crypto
  • A Russian man has recently been charged with high treason for reportedly using crytocurrency to finance the Ukrainian military, a first in Russia.
  • The authorities stated that the accused sent and received funds on behalf of a “terrorist organization” through crypto transactions.
  • Ukraine and Russia are using cryptocurrencies during the war; Ukraine is set to introduce regulation by 2025, while Russia is using cryptocurrencies to evade sanctions.

A Russian man was arrested and charged with high treason for supposedly helping the Ukrainian Armed Forces (AFU) through the use of cryptocurrency. This is the first time a case has been made public in Russia where cryptocurrency transactions are linked to supporting another military force. 

The FSB confirmed the charges and said that the case is under article 275 of the Russian criminal code. The accused, born in 1988, is said to have given funds to a foreign organization that is considered by the Russian authorities as detrimental to their security.  

Crypto-Funded Transactions

The man has not been named by the authorities; however, they said he is a inhabitant of the Sakha Republic, which is also known as Yakutia. He is said to be an employee of the diamond mining industry. The FSB stated that he became a member of a group in a social network, which is connected with the AFU, and received guidance on how to transfer the funds via cryptocurrency.  

These transactions allegedly involved the man contributing to the AFU, a group that according to Russia is a “terrorist organization”. This case is an illustration of how digital currencies are becoming a part of geopolitical rivalry.  

Cryptocurrencies have been rampantly used since the beginning of Russia’s invasion in 2022, where Ukraine has found a way to get funds to support its defense. By the end of 2024, the number of decentralized finance transactions for Ukraine Increased by 362%; the total amount of donations was more than $10 million.  

Crypto’s Geopolitical Impact

As a result of increased crypto-activity, Ukraine revealed its intention to regulate cryptocurrencies by 2025. The new law seeks to treat cryptocurrencies as securities and impose taxes on them when they are exchanged for the conventional currency. Neither would tax breaks be granted to avoid misuse, according to the Ukrainian authorities.  

However, Russia has also used the cryptocurrency to overcome the economic difficulties instigated by the western sanctions. In 2024, Russia’s finance minister reported using Bitcoin for the settlement of foreign trade, which underlined the geopolitical value of cryptocurrency.  

Thus, this case reveals the interaction between cryptocurrency, international finance and contemporary armed conflict. Digital currencies are transparent and efficient but the problem with them is that they can be easily misused.  

With cryptocurrency now playing an increasingly important role in the global political landscape, its effects on regulation and conflict will probably expand. The Russian man’s case is a clear illustration of how digital finance influences the process of warfare and diplomacy.

Areeba Rashid

Areeba Rashid