A Russian citizen from Yakutsk has been sentenced to seven years in prison for providing financial support to the Ukrainian armed forces through cryptocurrencies. This is the first time a Russian court has issued a public verdict regarding the use of cryptocurrencies to finance a military organization that Russia considers hostile.

Financial support is classified as treason.

According to Russian media outlet Izvestia, the man has been charged with "treason in the form of providing financial assistance to a foreign state or organization", which is considered a threat to the security interests of the Russian Federation. Criminal proceedings have been initiated under Article 275 of the Russian Criminal Code.

The Federal Security Service (FSB) reported that the man, born in 1988, was detained and placed in a high-security facility. Although his identity has not been released, it is known that he worked for a diamond mining company in the Sakha Republic, also known as Yakutia.

How was it funded?

The man claims to have joined an online group that connected him to the Ukrainian Armed Forces. Through this group, he received instructions to transfer funds via a cryptocurrency wallet. The funds were then used to support the Ukrainian military, which Russia officially classifies as a “terrorist organization.”

Cryptocurrencies and the Ukraine Conflict

Since the start of Russia’s invasion of Ukraine in 2022, Ukraine has received millions of dollars in cryptocurrency donations. In 2024 alone, DeFi transactions in Ukraine increased by more than 362%, surpassing $10 million by October.

The Ukrainian government plans to legalize cryptocurrencies by 2025, treating them as securities. Even after converting cryptocurrencies into traditional currency, the funds will be taxed to prevent tax evasion.

Russia and Cryptocurrencies: A Tool for Sanctions Evasion

The Ukrainian government is also pushing for sanctions against Russia’s use of cryptocurrencies. Russia’s finance minister has previously said the country is using cryptocurrencies as a way to bypass Western sanctions, further escalating tensions between the two countries.

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