Blockchain Forensics Firm Finds Millions in Sanctioned Crypto Wallets

Blockchain security and forensics firm Elliptic has been working with authorities to uncover crypto wallets linked to sanctioned individuals or organizations.

The U.K.-based firm has uncovered a wallet holding "significant amounts of crypto assets" worth millions of dollars that may be linked to sanctioned Russian officials and oligarchs.

On March 14, Elliptic co-founder Tom Robinson said in an interview with Bloomberg that cryptocurrencies could be used to evade sanctions. However, it has now been widely reported and generally accepted that Russia is unlikely to turn to crypto assets to circumvent sanctions.

Elliptic’s report did not specify the exact value of the cryptocurrency it found in the wallets, nor the nature of the assets it held. Robinson added that there are questions about the scale of cryptocurrency adoption, explaining:

“It turns out that it is unrealistic that oligarchs can bypass sanctions entirely by transferring all their wealth to cryptocurrencies. Cryptocurrencies are highly traceable. Cryptocurrencies can and will be used to evade sanctions, but it is not powerful."

Elliptic has identified more than 400 crypto services that allow anonymous users to trade digital assets using rubles. It also linked more than 15 million crypto addresses to Russia-related criminal activity.

Robinson added that there was a spike in ruble-related activity on some of these services in the week leading up to the war. Tornado Cash, which anonymizes Ethereum and ERC-20 transactions, is one such provider that refuses to restrict service or comply with sanctions.

“Overall, compliance is very high,” Robinson said, referring to high-profile exchanges such as Coinbase and Binance that have complied with sanctions from global regulators.

Elliptic has also been tracking cryptocurrency donations in support of humanitarian efforts in Ukraine. Its latest update at 23:30 UTC on March 11 shows that the Ukrainian government and an NGO supporting the military have received a total of $63.8 million.

Merkle Science dug into several sources for its report, which revealed that Ukraine received a total of $93.6 million in cryptocurrency donations.

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