According to an article in the International Business Times, weapons, ammunition, and information for the civil war in Eastern Ukraine are bought with bitcoin on the dark web.
As the conflict between Ukrainian loyalists and pro-Russian separatists intensifies, the dark web is becoming a popular source of military information and materiel for both sides of the conflict, says the IBT article by Alex Holden, a specialist in the dark web. He refers to popular forum topics such as “Need prices for grenade launchers”, “Buying bulletproof vests in bulk”, or “Need instructions on how to blow up a bridge”.
Various stores located in different parts of the world can sell all kinds of weapons and ammunition including sniper rifles, machine guns, and assault weapons, offering worldwide shipping for free or for a small fee. All of these stores accept bitcoin and do not collect the buyers’ personal information. Customer ratings are used to choose more reliable stores.
Indeed, according to some insider reports, weapons and ammunition for the Ukrainian military and voluntary loyalist battalions fighting in the east of the country are often bought in Europe illegally. “Phoenix Wings”, a Ukrainian loyalist website run by Yuri Biryukov, President Petro Poroshenko’s aide, is collecting donations to purchase supplies and equipment for the Ukrainian army and accepts bitcoins. At press time, the blockchain records showed that 5.88 BTC have been given by 68 donors.
Several separatist websites and pro-rebel activists also try to capitalize on support for their cause and solicit donations in digital currency. A brief investigation of blockchain records shows that in many cases their bitcoin addresses remain empty. Other, more influential pro-rebel organizations maintain active digital currency accounts with daily transactions. The main websites of pro-Russian separatists do not appear to accept bitcoins, but in summer 2014 spam emails sent to Russian and Ukrainian addresses asked people to send their donations for separatist fighters in bitcoin.
Bitcoin became very popular in Ukraine in 2014. In July 2014, the btcu.biz service made bitcoin available through 4,000 self service kiosks all over the country. At the Bitcoin Conference Kiev, held on September 26th, 2014, it was announced that there were 236,000 bitcoin users in Ukraine. The popularity of the cryptocurrency is widely believed to be connected with the spectacular collapse of the national currency, hryvna. On November 11th, the National Bank of Ukraine warned against the use of bitcoin, stating, among other things, that “bitcoin may be used to finance terrorism”.
Still, according to an article in Forbes Ukraine, this may have been no more than a formality. As Forbes reported, since the beginning of the conflict in Eastern Ukraine, the Financial Action Task Force, an international organization dedicated to fighting money laundering, has become concerned at, among other things, the popularity of bitcoin in Ukraine. To evade sanctions, the authorities had to state they do not support the use of bitcoin.