Chainalysis assesses the dynamics of cryptocurrency transfers in Ukraine and Russia since the start of the war

From July 2021 through June 2022, the total volume of cryptocurrency transactions across Eastern Europe stood at $630.9 billion, according to Chainalysis’s analytical report.

The market is the fifth-largest, accounting for just over 10% of global transaction activity in the period studied.

18.2% of all assets received by Eastern Europe were linked to high-risk or illicit activity — these figures were higher than in any other region.

Experts noted a sharp rise in cryptocurrency transfers to Ukraine and Russia shortly after the start of Russia’s full-scale invasion.

In March, the volume of trading in Ukrainian hryvnia on the Binance and LocalBitcoins platforms rose by 121%, to $307 million, and in Russian rubles by 35%, to $805 million.

“However the trend diverged. In the following months, Russia saw fluctuations in the number of transactions within a relatively narrow range. In Ukraine, by contrast, there was a steady growth in cryptocurrency transfers from the start of the war through June 2022,” said Chainalysis.

In July, trading volumes on platforms in hryvnia began to fall. According to Finance Ministry adviser Tatiana Dmitrenko, this may be linked to the relaxation of currency controls by the National Bank.

In Russia, the most common use cases involved moving funds abroad. Since February, there has been a spike in visits to Russian crypto services from the UAE, Turkey, Kazakhstan and Georgia.

Experts at Chainalysis also noted growth in the use of stablecoins in Russia since the start of the war. In January these assets accounted for 42% of transaction volume, predominantly on Russian services. This share rose sharply to 55% in February and to 67% in March.

Analysts suggest that the use of cryptocurrencies could undermine the efficacy of sanctions imposed on Russia. At the same time, for Ukraine digital assets open an additional channel for donations.

Earlier, analysts Chanalysis found that since February 2022 no fewer than 54 different groups from Russia had been soliciting funds to finance the military invasion of Ukraine. By the end of July, their wallets had collectively received $2.2 million in various digital currencies.

As reported in the September Chainalysis report, Ukraine surpassed Russia in the global cryptocurrency adoption index for 2022. The fastest-growing Bitcoin market, according to the analysts, was the region Middle East and North Africa.

Follow ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analytics.