According to recent reports, a Russian citizen named Alexander Vecherko from the Khabarovsk Krai region has been arrested by the secret service for allegedly donating cryptocurrencies to support the Ukrainian army. The accusation is that Vecherko supported Ukraine by donating an unknown amount of cryptocurrencies through a third party in Ukraine. Sources speculate that Vecherko donated USDT, which the FSB claims enabled the enemy to purchase gear such as night vision goggles, ammunition, and medicine.
Treason Charges Pressed
As shown in a circulating video, Vecherko’s actions are being viewed by the FSB as treason, leading to his arrest. He will face legal proceedings and be tried in a court of law. He is currently being held in Moscow, Russia’s capital city.
The arrest of Vecherko has brought attention to the vulnerabilities of public cryptocurrencies, particularly in the ongoing war with Ukraine. Likely, Vecherko did not utilize privacy-focused coins like Monero or ZCash, which incorporate obfuscation features to prevent third parties, including law enforcement, from tracing transactions. Privacy-centric techniques employed by these coins, such as ring signatures in Monero, help protect the privacy of both the sender and receiver, as well as conceal the transaction amount.
Since Vecherko likely used a token or coin whose transfers are public and where the identities of the sender and receiver can be deciphered, the FSB was able to track the movement of funds. There may have been evidence suggesting that the recipient of the funds served as a conduit for receiving donations intended for the Ukrainian military.
Most public blockchains, including Bitcoin, Ethereum, and Cardano, operate pseudonymously and transparently. Although transactions are converted into machine-readable code using cryptographic elements, the participants’ identities can be decrypted.
USDT Trading Volumes Spike In Russia
The token speculated to have been used, USDT, can be minted on multiple chains, including Tron and Ethereum—both of which are public and enable pseudonymous transfers. Analysts have observed a notable increase in ruble-USDT trading volumes on Binance during last week’s alleged “coup” attempt by Yevgeny Prigozhin, the founder of Wagner.
Trading volumes surged from $2 million to $8.5 million. Conversely, no significant change was observed in the Ruble-Bitcoin pair, indicating that many Russians preferred USD-tracking stablecoins during times of crisis.
Since the conflict broke out, Ukraine has received over $70 million in cryptocurrency donations, with the majority of these funds being utilized to support the Ukrainian military and provide humanitarian relief.
Additionally, the Ukrainian government has established several crypto fundraising platforms to facilitate donations, including the official website of the Ukrainian Ministry of Digital Transformation and the non-profit organization Come Back Alive.
Featured image from Canva, chart from TradingView