Forensics Firm Finds Digital Wallets Tied to Sanctioned Russians

A crypto forensics firm said it has uncovered information on a digital wallet that could be linked to Russian oligarchs and officials facing sanctions.

As Bloomberg News reported Monday (March 14), the wallet has “significant crypto-asset holdings,” according to Tom Robinson, co-founder of the forensics company Elliptic.

The firm’s discovery comes as Western nations worry that wealthy Russians — facing sanctions over the country’s invasion of Ukraine — will use things like bitcoin, tether and privacy-enabling coins to get around these financial penalties.

Last week, the U.S., the European Union, U.K. and Group of Seven, or G7, all issued statements saying that sanctions on Russia applied specifically to crypto.

Meanwhile, Ukrainians and ordinary Russians have turned to crypto as the war impacts their countries’ banking and payment sectors. Ukraine has also been successfully soliciting millions in cryptocurrencies to support its defenses.

“Crypto can be used for sanctions evasion,” Robinson said. “What’s in question is on what kind of scale. It’s not proving out realistic that oligarchs can completely bypass sanctions by moving all their wealth into crypto. Crypto is highly traceable. Crypto can and will be used for sanctions evasion, but it’s not the silver bullet.”

Learn more: Ukraine War Tests Crypto’s Ability to Skirt Government Controls

Elliptic said it has identified more than 400 virtual asset services that allow their (typically anonymous) customers to buy crypto with rubles. Last week, activity on these exchanges tripled compared the week before the war began, Robinson said.

The company also connected more than 15 million cryptocurrency addresses to criminal activity tied to Russia and  found several hundred thousand crypto addresses tied to sanctioned individuals in Russia and their associates, Robinson said.

Read more: Citing Libertarian Values, CEOs of Crypto Exchanges Won’t Cut Off Russian Customers

Crypto exchanges such as Binance and Coinbase Global Inc. have said they will abide by the sanctions, but have also said they won’t comply with Ukraine’s request that they stop servicing all Russian customers.

“Ordinary Russians are using crypto as a lifeline now that their currency has collapsed,” Coinbase CEO Brian Armstrong said on Twitter earlier this month. “Many of them likely oppose what their country is doing, and a ban would hurt them, too.”