NATO eyes Russian oligarchs as funds for Ukraine hit $63m

By Raffaele Redi

G7 cracks down on oligarchs’ wallets as donations give hope to Ukraine

Ukrainian and Russian flags                                 
Cypto donations for Ukraine are still flooding in – Photo: Shutterstock

Crypto wallets belonging to Russian oligarchs have largely been frozen as G7 members step up their hunt for Russian crypto hoards, while on the other side of the front, the Bank of Russia limited withdrawals to roubles until next September, to stop the drainage of US dollars from Russia.

The measures – combined with the stop placed on MasterCard and Visa transactions in Russia, which halted transactions on Binance – have restricted oligarchs’ scope for action on the crypto market, with only dark markets really left open to them. The volume of roubles being exchanged for USD-backed stablecoins has, therefore, lessened to well below the average in the last few hours.

Meanwhile, the Ukrainian government revealed for the first time how donations from crypto users have been used, saying they “helped in saving soldiers’ lives”.

The G7 crackdown

Group of Seven (G7) members have been seeking to clamp down on oligarchs’ crypto transactions, implementing measures to better detect and interdict any illicit activity while imposing punitive fees on any Russian actors who might be using digital assets to transfer their wealth.

The move came as a high volume of roubles was seen being exchanged for stablecoins last week, suggesting that Russian oligarchs were trying to bypass NATO sanctions and convert their wealth to cryptocurrencies, while ordinary Russian users tried to get rid of a depreciating rouble that is currently worth less than one US cent.

“We are making sure that the Russian state and its elites cannot use crypto assets to circumvent the sanctions. We will stop the group close to Putin and the architects of his war from using these assets to grow and transfer their wealth,” said the president of the European Commission, Ursula von der Leyen. Her words were then echoed by the White House, and in Japan.

Bank of Russia

Russian crypto users, alongside oligarchs, also received a communication from the Bank of Russia, which banned withdrawals from e-wallets being made in foreign currencies, restricting such withdrawals to roubles only.

The move, which forces crypto users in the Russian Federation to withdraw only in roubles until September 2022, effectively froze oligarchs’ accounts, fuelling the Russian black market. Activity on dark crypto exchanges has reportedly been increasing in the last few days, with underground exchanges having increased their turnover by a factor of at least five.

The Ukrainian front

On the Ukrainian side, crypto donations from all over the world gave Ukrainian forces hope, but, above all, lunches, medicines and bulletproof vests.

According to a report shared by the Ukrainian deputy minister of digital transformation, Alex Bornyakov, Ukraine used crypto donations to purchase 5,550 bulletproof vests, 410,000 packed lunches, 500 ballistic plates for bulletproof vests, 3,125 thermal imagers and other optical equipment, 3,427 doses of medicine, 500 helmets and 60 walkie-talkies

“Crypto assets proved extremely helpful in [the] facilitation of funding flows to the Armed Forces of Ukraine. Huge thanks to everyone who donated to the Crypto Fund of Ukraine. Every helmet and vest bought via crypto donations is currently saving Ukrainian soldiers’ lives,” said Bornyakov.

According to Elliptic, crypto donations made to Ukraine since the Russian invasion currently total over $63m.

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