A staggering $40 million dollars worth of cryptocurrency was transferred last year from wallets to exchanges, mainly Binance, that were used to provide funds for Russia's war efforts in the Ukraine,according to new research. Hapi Labs, recently conducted an analysis of the transactions and found that the main purpose of the transfers to the crypto trading platforms was to launder the money.
While it's not possible to say with certainty whether the money was indeed used in connection with Russia's aggression, the findings support the recent report by Elliptic that more than $4.8 million in cryptocurrency had been collected and moved by Russia-backed entities. Furthermore, Hapi Labs noted that the amount sent from wallets associated with the Russia-backed self-proclaimed republics in Donetsk and Luhansk regions was much more substantial, topping $40 million.
In response to such findings, Binance points out to its obligations under the existing anti-money laundering (AML) and know-your-customer (KYC) regulations. They also cite Chagri Poyraz, Head of Global Sanctions on Binance, who highlights the use of analytical tools from highly-regarded firms such as Elliptic, Chainalysis, and TRM Labs for proper surveillance of transactions.
However, some aspects of the sanctions measures remain unclear. For example, Hapi Labs suggest that the crypto exchanges do not react quickly enough to the requests from law enforcement agencies, as they only block these accounts after the "dirty" funds had already been passed through. On the other hand, representatives of Whitebit, another crypto platform, confirmed their quick response when alerted by Hapi Labs and the Ukrainian services, who jointly tracked the donations for weapons and ammunition.
Cryptocurrency has been increasingly connected to acts of aggression as, based on estimates from Elliptic, a total of $4.8 million and $212 million has been sent in transactions associated with the Russian military and pro-Ukraine forces, respectively. While cryptocurrency transactions allow for a significant increase in the speed and anonymity of transactions, better regulatory response must be implemented to ensure they are not used to fund illegal activities.
Maria Anderson
- 2023-03-30
Exposing the Dirty Money: $40 Million Worth of Cryptocurrency Used to Fund Russia’s War Efforts
A report by Hapi Labs suggests that more than $40 million worth of cryptocurrency was used for funding Russia’s war efforts in the Ukraine. Binance points out its obligations under the existing AML and KYC regulations but some aspects of the sanctions still remain unclear.
