Russia and Iran Use Cryptocurrency to Buy Military Drones

Blockchain analytics firm Chainalysis reports that groups linked to Russia and Iran are increasingly using cryptocurrency to procure low-cost military drones and components from global e-commerce platforms. Since the 2022 invasion of Ukraine, pro-Russian organizations have raised more than $8.3 million in crypto donations specifically for drone acquisitions.

Iranian actors, including the Islamic Revolutionary Guard Corps Research and Self-Sufficiency Jihad Organization, employ digital currencies to circumvent export controls. These actors often utilize third-country networks, such as a supplier in Hong Kong, to secure parts. Additionally, the Ministry of Defence Export Center has negotiated military contracts that permit payment in digital currencies.

While the overall volume of these transactions is small compared to total military spending, the public nature of the blockchain allows investigators to map transactions. Andrew Fierman, head of national security intelligence at Chainalysis, noted that the technology enables the matching of crypto transactions to drone price points and reveals the intent behind purchases that would otherwise remain opaque.