Crypto sleuths claim to have sniffed out digital wallet

with millions tied to sanctioned Russian oligarchs and officials

Crypto forensics firm Elliptic said it has passed on to authorities information on a digital wallet that may be linked to sanctioned Russian officials and oligarchs.

The wallet has “significant crypto-asset holdings,” in the millions of dollars, Elliptic co-founder Tom Robinson said in an interview Monday.

The finding comes amid a heated debate on whether cryptocurrencies can be used to evade additional sanctions imposed on Russian oligarchs and officials since Russia’s invasion of Ukraine. With authorities confiscating the oligarchs’ yachts and overseas fiat assets, some worry they’ll turn to Bitcoin, Tether and privacy-enabling coins.

“Crypto can be used for sanctions evasion,” Robinson said. “What’s in question is on what kind of scale. It’s not proving out realistic that oligarchs can completely bypass sanctions by moving all their wealth into crypto. Crypto is highly traceable. Crypto can and will be used for sanctions evasion, but it’s not the silver bullet.”

Elliptic, whose clients include government agencies and crypto exchanges, has already identified more than 400 virtual-asset services that let their mostly anonymous users buy crypto with rubles. Last week, activity on these exchanges tripled versus the week before the war broke out in late February, Robinson said.

Elliptic also linked more than 15 million cryptocurrency addresses to criminal activity tied to Russia. It also found several hundred thousand crypto addresses linked to Russia-based sanctioned actors and their associates, Robinson said.

Crypto exchanges from Binance to Coinbase Global Inc. have said they will abide by the imposed sanctions. Both exchanges have also said they won’t stop servicing all Russian customers — which is what the Ukrainian government asked for.

“In general, the level of sanction compliance is very high,” Robinson said.