Russian national sentenced to 7 years for crypto funding

A Russian national has been sentenced to seven years in prison for high treason related to cryptocurrency transactions.

The individual was convicted for transferring funds to a unit of the Ukrainian Armed Forces amid the ongoing conflict between Russia and Ukraine.

This case marks one of the first instances where cryptocurrency funding has been linked to treason charges.

According to local news outlet Izvestia, the accused was charged with “high treason in the form of providing financial assistance to a foreign state, international or foreign organisation or their representatives in activities directed against the security of the Russian Federation.”

The individual, who remains unnamed, worked for a diamond mining company and allegedly supported enemy forces in conducting reconnaissance and subversive operations against Russian national security.

This sentencing follows another case where a different Russian citizen was apprehended for funding digital accounts associated with Ukrainian Armed Forces officials.

In response to the challenges posed by cryptocurrency's pseudonymous nature, Russian authorities have implemented a regulatory framework that enhances government agencies' ability to access digital currency identifiers.

This regulatory change allows for improved tracking of transactions linked to money laundering or terrorist financing activities.

Cryptocurrency has been utilised as a funding mechanism for both sides of the conflict.

An analysis by Hapi Labs revealed that over $40 million in crypto was used to support Russian efforts in 2022.

Conversely, Ukraine has also embraced crypto donations during this conflict.

In 2022, Ukraine partnered with Coingase, a cryptocurrency payment processing firm, to facilitate donations for its Armed Forces.

Notably, Polkadot (CRYPTO:DOT) creator Gavin Wood contributed $5 million, encouraging further contributions from others.