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The Russian Federation does not have an official regulation on tracking transactions in the blockchain.
• There is no perfect way to completely anonymize cryptocurrency transfers.
• You can make sender identification more difficult.
On October 26, the FSB of the Russian Federation charged a resident of Sovetskaya Gavan in the Khabarovsk Territory with high treason, reports TASS with reference to the special service. According to investigators, 54-year-old Alexander Vechirko financed the Armed Forces of Ukraine through cryptocurrency.
Human rights activists report that this is the first criminal case in the Russian Federation for high treason through cryptocurrency.
What is known about the situation?
Vechirko was born in Vinnytsia and later became a Russian citizen. In 2020, he was listed as an employee of the Daltransugol company. In recent years, Vechirko has been registered in St. Petersburg and Vladivostok. As Dozhd mentions, this information is obtained "from merged databases".
When exactly the alleged donation was made for the needs of Ukraine is unknown, but the detention of the man became known in June 2023.
According to the FSB, Vechirko, through intermediaries living in Ukraine, transferred the cryptocurrency "to the account of a foreign charitable foundation for the purchase of unmanned aerial vehicles, thermal imaging sights, ammunition and medical uniforms by the Armed Forces of Ukraine."
After his arrest, he was placed in a Moscow pre-trial detention center, where he is still being held.
How did you contact the donor?
The FSB press release does not disclose additional details of the case. It is not known in which cryptocurrency the donation was made and whether Vechirko published data about his wallets anywhere.
Law enforcement officers could monitor the man and his social networks, or learn about cryptoaddresses after examining his computers, phones and gadgets, says the head of the public organization "Roskomsvoboda" Artem Kozlyuk.
Access to the latter, according to him, is significantly simplified if the user does not use encryption on devices, does not install two-factor authentication, and conducts sensitive correspondence in unprotected instant messengers.
Despite the fact that transactions are not named in any way, blockchain analysis tools allow you to identify the wallet belonging to a specific person. If the exchange is centralized, the user undergoes a mandatory KYC procedure when registering, indicating their passport data.
In the future, this information will be available to KYT providers. In addition, they mark up addresses by security level, based on the origin of assets on it.
There are currently no official regulations on tracking transactions in the blockchain in Russia, says Andrey Tugarin, founder of GMT Legal, a law firm.:
"The existing decisions are regulated by unofficial internal rules of a particular agency, in this case the FSB. Law enforcement agencies can no longer ignore the turnover of cryptocurrencies."
The authorized body in this case is Rosfinmonitoring, which is obliged to track financial crimes and exchange information with other interested agencies.
In 2021, the agency developed a service for analyzing cryptocurrencies "Transparent Blockchain" and is now actively using it in its activities.
How can I secure my cryptocurrency transactions?
There is no perfect way to completely anonymize cryptocurrency transfers. Information security companies have learned how to calculate the wallets of terrorists and even experienced hackers. But some steps can make it much harder to track digital assets, explains HAPI CCO Mark Letiuk.
First of all, this is the use of cryptocurrency mixers.
Secondly, the transition to anonymous coins like Monero or pseudonymous ones like Zcash and Dash. You can also set up anonymous transactions in other blockchains, for example, in Litecoin using the MimbleWimble function.
The third option is to create a chain of several exchanges:
"The deposit address for each account is different, and the withdrawal of funds is already taking place from the exchange cluster. It is difficult to untangle user transfers between two platforms, especially if you choose competing companies or do not have representative offices in the Russian Federation — this is the same mixer only centralized," notes Letsyuk.
In the same way, the transfer of funds through exchangers will work — the user transfers funds to an intermediary in one network, and from him they already go to the final recipient in another coin.
"You can find a trusted person who is located abroad and whose wallet is not public. And send money through it to the right recipient," the expert adds.
Neither HAPI nor their colleagues keep separate statistics on donations received in Ukraine from the Russian Federation. According to Letiuk, this may also be due to the complexity of tracking them.
"Those who want to donate for real, find ways to hide their identity and disguise their actions," he summarizes.
Recall that in March, finrazvezdka of the Russian Federation announced surveillance of cryptocurrency owners together with the Ministry of Internal Affairs, the FSB and the Investigative Committee. At that time, the agency controlled transactions with bitcoin and 20 other assets in relation to more than 25,000 users.
• There is no perfect way to completely anonymize cryptocurrency transfers.
• You can make sender identification more difficult.
On October 26, the FSB of the Russian Federation charged a resident of Sovetskaya Gavan in the Khabarovsk Territory with high treason, reports TASS with reference to the special service. According to investigators, 54-year-old Alexander Vechirko financed the Armed Forces of Ukraine through cryptocurrency.
Human rights activists report that this is the first criminal case in the Russian Federation for high treason through cryptocurrency.
What is known about the situation?
Vechirko was born in Vinnytsia and later became a Russian citizen. In 2020, he was listed as an employee of the Daltransugol company. In recent years, Vechirko has been registered in St. Petersburg and Vladivostok. As Dozhd mentions, this information is obtained "from merged databases".
When exactly the alleged donation was made for the needs of Ukraine is unknown, but the detention of the man became known in June 2023.
According to the FSB, Vechirko, through intermediaries living in Ukraine, transferred the cryptocurrency "to the account of a foreign charitable foundation for the purchase of unmanned aerial vehicles, thermal imaging sights, ammunition and medical uniforms by the Armed Forces of Ukraine."
After his arrest, he was placed in a Moscow pre-trial detention center, where he is still being held.
How did you contact the donor?
The FSB press release does not disclose additional details of the case. It is not known in which cryptocurrency the donation was made and whether Vechirko published data about his wallets anywhere.
Law enforcement officers could monitor the man and his social networks, or learn about cryptoaddresses after examining his computers, phones and gadgets, says the head of the public organization "Roskomsvoboda" Artem Kozlyuk.
Access to the latter, according to him, is significantly simplified if the user does not use encryption on devices, does not install two-factor authentication, and conducts sensitive correspondence in unprotected instant messengers.
Despite the fact that transactions are not named in any way, blockchain analysis tools allow you to identify the wallet belonging to a specific person. If the exchange is centralized, the user undergoes a mandatory KYC procedure when registering, indicating their passport data.
In the future, this information will be available to KYT providers. In addition, they mark up addresses by security level, based on the origin of assets on it.
There are currently no official regulations on tracking transactions in the blockchain in Russia, says Andrey Tugarin, founder of GMT Legal, a law firm.:
"The existing decisions are regulated by unofficial internal rules of a particular agency, in this case the FSB. Law enforcement agencies can no longer ignore the turnover of cryptocurrencies."
The authorized body in this case is Rosfinmonitoring, which is obliged to track financial crimes and exchange information with other interested agencies.
In 2021, the agency developed a service for analyzing cryptocurrencies "Transparent Blockchain" and is now actively using it in its activities.
How can I secure my cryptocurrency transactions?
There is no perfect way to completely anonymize cryptocurrency transfers. Information security companies have learned how to calculate the wallets of terrorists and even experienced hackers. But some steps can make it much harder to track digital assets, explains HAPI CCO Mark Letiuk.
First of all, this is the use of cryptocurrency mixers.
Secondly, the transition to anonymous coins like Monero or pseudonymous ones like Zcash and Dash. You can also set up anonymous transactions in other blockchains, for example, in Litecoin using the MimbleWimble function.
The third option is to create a chain of several exchanges:
"The deposit address for each account is different, and the withdrawal of funds is already taking place from the exchange cluster. It is difficult to untangle user transfers between two platforms, especially if you choose competing companies or do not have representative offices in the Russian Federation — this is the same mixer only centralized," notes Letsyuk.
In the same way, the transfer of funds through exchangers will work — the user transfers funds to an intermediary in one network, and from him they already go to the final recipient in another coin.
"You can find a trusted person who is located abroad and whose wallet is not public. And send money through it to the right recipient," the expert adds.
Neither HAPI nor their colleagues keep separate statistics on donations received in Ukraine from the Russian Federation. According to Letiuk, this may also be due to the complexity of tracking them.
"Those who want to donate for real, find ways to hide their identity and disguise their actions," he summarizes.
Recall that in March, finrazvezdka of the Russian Federation announced surveillance of cryptocurrency owners together with the Ministry of Internal Affairs, the FSB and the Investigative Committee. At that time, the agency controlled transactions with bitcoin and 20 other assets in relation to more than 25,000 users.