Key Takeaways
- Russian authorities are working on building blockchain-based payment infrastructure for trade between BRICS members and legitimizing crypto mining.
- In 2023, 69% of all ransomware attacks involving crypto came from Russian-speaking entities.
- Western authorities are increasingly clamping down on Russian crypto exchanges, linked wallets, and entities.
The pressures of a wartime economy and mounting sanctions have fueled a surge in Bitcoin (BTC) and cryptocurrency use across Russia.
As the state works to regulate crypto, domestic crypto crimes are rising. At the same time, Western authorities are stepping up efforts to crack down on both legal and illicit elements of Russia’s crypto infrastructure.
Russia Crypto Crime
Speaking at the annual meeting of judges of general jurisdiction, military, and arbitral tribunals, which President Vladimir Putin attended, Russia’s Chairman of the Supreme Court, Irina Podnosova, has called attention to the rise of crypto-related crimes.
In recent years, citizens have increasingly turned to crypto as economic sanctions continue to squeeze the nation’s finances.
Furthermore, the Russian government itself has urged citizens and businesses to use crypto and has also begun implementing regulations and legislation for digital assets, including legitimizing cryptocurrency mining.
Podnosova notes that crypto is an increasingly common vector of attack and explains that the Supreme Court is taking legislative action to recognize digital assets as “property for criminal proceedings.”
In the closing months of 2024, Russian authorities got to work passing numerous crypto-related bills and legislation as part of a broader effort to bootstrap its struggling wartime economy.
Notably, in December 2024, Putin signed legislation classifying crypto as property in foreign trade settlements.
Interestingly, Russian officials have a difficult task ahead of them as Russia is currently considered a global hotbed of crypto crime.
An October 2024 report from TRM found that 69% of all crypto proceeds from ransomware attacks in 2023 came from Russian-speaking sources.
In addition, Russian darknet markets comprised 95% of all illegal drug sales using crypto on the dark web in 2023.
However, it’s not just Russia that will be working extremely hard to keep its citizens safe from crypto criminals.
Seemingly, Western authorities also have their hands full, keeping Russian crypto platforms suppressed.
Western Actions
A Feb. 19, 2025, crypto crime report from Chainalysis examines the interplay of international sanctions and crypto in Iran and Russia.
It notes that geopolitical tensions have also led to Western agencies targeting Russian-linked crypto entities.
This saw the U.S. Office of Foreign Assets Control (OFAC) sanctioning a Russian Unmanned Aerial Vehicle (UAV) maker who had supplied drones to Russian forces, leveraging crypto donations and “likely” using crypto in UAV sales.
The report notes the sanctioned address processed some $40 million in transfers.
Other efforts include German authorities “seizing the infrastructure” of 47 Russian-language crypto exchanges that were closely linked with darknet markets, cybercriminals, and other sanctioned entities.
Most notably, OFAC sanctioned Cryptex, a Russian crypto exchange that has handled over $5.88 billion in transactions since 2018.
However, much like a hydra, they bring down one non-KYC/sanctioned exchange or platform and sprout another in its place.
The report notes that these efforts are working as “overall inflows” are declining.
Furthermore, decentralized finance (DeFi) platforms and crypto mixers such as Tornado Cash continue to give authorities unique challenges, as decentralized platforms are not as easy to target and shut down.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
