Blockchain analytics platform Elliptic has identified “several hundred thousand” crypto addresses that are linked to sanctioned Russia-based individuals or entities.

Elliptic clarifies that these addresses are not necessarily all owned by entities currently on sanctioned lists, but includes addresses "that we have been able to associate with these actors through our own analysis." Elliptic also does not specify when in time the sanctioned entities were sanctioned.

Elliptic’s data has also identified more than 400 virtual asset service providers (VASPs)—most of which are crypto exchanges or wallet providers—that allow for cryptocurrencies to be purchased with the Russian ruble. 

“Most of these services are unregulated, and can be used anonymously,” Elliptic said. 


The blockchain analytics firm has also directly linked more than 15 million crypto addresses to criminal activity, with a “nexus in Russia.” Elliptic said it is continuing to “actively” investigate crypto wallets that are “believed to be linked to Russian officials and oligarchs subject to sanctions.” 

These findings are the latest in a growing line of concerns that sanctioned Russian entities and individuals may pivot to crypto in order to circumvent economic sanctions.

Is Russia actually using crypto to evade sanctions? 

In an email to Decrypt, Elliptic's Director of Policy and Regulatory Affairs David Carlisle said, "Cryptocurrencies can’t facilitate the large-scale sanctions evasion Russia will require to completely plug the gap it faces from severe sanctions... The total assets of the Russian banks subject to US sanctions is approximately equivalent to the entire market cap of crypto. Crypto simply can’t absorb the scale of transactions Russia needs to operate fully outside the scope of these restrictions."

However, it is "inevitable," Carlisle said, that some sanctioned Russian entities and individuals "will look to crypto to raise funds and evade sanctions on a more limited scale."


There are several ways in which Russian-affiliated individuals or entities could use cryptocurrencies to evade sanctions. 

One primary method is ransomware, an industry that—in 2021—lined the pockets of Russia-affiliated criminals more so than any other group. A recent UN report also found that North Korea—likely the most-sanctioned nation on earth—part-financed its nuclear and ballistic missile programs through cryptocurrency

Former FBI agent Crane Hassold, now the Director of Threat Intelligence at cloud security firm Abnormal Security, recently told Decrypt that cryptocurrencies are the “primary factor” in today’s ransomware industry. 

Bitcoin mining, which President Putin has said Russia has a competitive advantage in, is another option. 

Lastly, there are examples of crypto exchanges that have failed to block sanctioned users, such as SUEX, the example cited by Carlisle during a recent Elliptic webinar. “We’ve seen instances before of crypto asset exchange services that were complicit in enabling Russia-based criminals to launder large amounts of money," he said.

SUEX was sanctioned by the U.S. Treasury’s Office of Foreign Assets Control in September 2021 as an entity responsible for, or complicit in, cyber-related activity against the interest of the United States. 

The case for crypto

An array of crypto advocates have repeatedly said cryptocurrencies are an unlikely tool for Russian sanctions evasion. 

Blockchain Association’s head of policy Jake Chervinsky took to Twitter to make the case. 


Marta Belcher, president of Filecoin Foundation and general counsel at Protocol Labs, a staunch privacy advocate, told Decrypt the idea that cryptocurrencies will be used to evade sanctions is simply wrong. 

“Cryptocurrency is a terrible technology to use to commit crimes. There is a permanent, public record of all transactions. This is why law enforcement has been so effective at catching criminals when they use crypto,” she said

Even Coinbase—one of the industry’s most well-known exchanges—said “digital assets have properties that naturally deter common approaches to sanctions evasion.” The exchange made this case after blocking over 25,000 addresses linked to Russian-associated illicit activity

John Hopkins University economics professor Steve Hanke offers a slightly different perspective—namely, that cryptocurrencies can be used to skirt sanctions, but with limited effectiveness. “There will be attempts at crypto workarounds,” Hanke told Decrypt, but “in the short-run, the impact will not be more than a footnote.” 

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