Ukraine Security Service Blocks and Seizes Wallet Tied to Russian Military Funding

Updated by Kyle Baird
In Brief
  • The Security Service of Ukraine has identified and blocked a crypto wallet tied to Russian military financing.
  • The wallet in question had $19,500 worth of cryptocurrency.
  • The agency says the owner of the wallet has been arrested.
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The Security Service of Ukraine (SSU), for the first time, blocked a digital asset wallet involved in financing the Russian military forces.

According to the SSU, the agency seized and blocked a crypto wallet allegedly tied to financing the Russian military actions in Ukraine.

“This man [the crypto wallet owner] calls himself a volunteer and since the beginning of Russia’s full-scale invasion [of Ukraine] has been collecting money for the invading army,” the statement reads. When seized, the wallet had $19,500 worth of cryptocurrency. 

The “volunteer” sent a significant amount of assets to ”purchase military gear for the militants of the terrorist organizations L/DNR,” the investigation revealed. They also used social media platforms to incentivize the financing of “illegal armed groups” with visual and video content, reportedly sharing this content with other participants of their network and keeping their followers updated on how the money was spent.

The security service shares that it was able to detect and seize the wallet and arrest the wallet’s owner with assistance from “foreign crypto companies.”

The funds – the $19,500 worth of cryptocurrency – now await the “decision on their tracking and transfer to Ukrainian jurisdiction.”

The SSU warned about a “similar fate” for everyone whose activities are connected to sponsoring the war in Ukraine.

Since Putin’s invasion of Ukraine, cryptocurrency has played a significant role in the war from both sides of the conflict.

The Ukrainian government has been able to benefit from crypto initiatives launched in an effort to support the country’s military efforts. 

Aid for Ukraine, for instance, is a DAO launched by Solana co-founder Anatoly Yakovenko and CEO of Everstake and is supported by FTX, Kuna Exchange, and the Ministry of Digital Transformation of Ukraine to raise funds to help Ukraine fight the invasion.

By Aug. 17, the DAO was able to raise $54 million, the Vice Prime Minister and Minister for Digital Transformation for Ukraine, Mykhailo Fedorov, shared.

Meanwhile, Russian citizens, heavily affected by sanctions from the West, have been looking into cryptocurrency as a payment method and investment.

The government of Russia has accelerated the launch of its digital ruble, which it had been postponing before, as a way to avoid sanctions and support the falling economy. According to the Central Bank of Russia, individuals and enterprises in Russia will be able to use the digital ruble “ as real money” by 2023.


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