JAKARTA - In the midst of increasingly complex global conflicts, cryptocurrencies are now emerging as a new funding channel that is difficult to monitor. The latest report reveals that digital assets are used to buy military drones - connecting financial technology with modern battlefields.
Blockchain analytics firm Chainalysis has found groups linked to Russia and Iran using crypto to fund the purchase of drones and related components through global e-commerce platforms.
The findings show how digital supply chains and crypto assets now intersect directly with armed conflict, particularly in regions such as Ukraine and the Middle East, where commercial drones are increasingly being used in military operations.
Digital Footprint That Cannot Be Hidden
Although crypto is often associated with anonymity, blockchain technology actually provides high transparency. Chainalysis said investigators were able to track the flow of funds from digital wallets linked to drone developers or paramilitary groups to sellers on online platforms.
Chainalysis' head of national security intelligence, Andrew Fierman, emphasized that the main strength of the blockchain lies in the visibility of its data.
"In the blockchain, there are tremendous opportunities - once you identify the vendor, you can see the activity of the counterparty to the transaction and make judgments that help understand the use and intentions behind the purchase," he said.
Researchers even matched crypto transactions worth around 2,200 to 3,500 US dollars with the price of drones and their components listed on e-commerce platforms. Not only that, the analysis was also strengthened with visual evidence and purchase requests.
"We saw everything from requests for drones and parts, the number of desired ones, to photos showing the goods were obtained," said Fierman.
Since Russia's massive invasion of Ukraine in 2022, pro-Russian groups have reportedly raised more than $8.3 million in crypto. Some of the funds were specifically used to purchase drones.
In addition, Chainalysis also identified activity associated with Iranian entities, including a crypto wallet associated with the Islamic Revolutionary Guard Corps. The wallet is known to buy drone components from suppliers based in Hong Kong.
Furthermore, groups connected to Iran are said to not only use crypto for purchases, but also to sell military equipment - demonstrating the increasingly widespread use of digital assets in this network.
Although the scale is still relatively small compared to the total global military spending, the use of cryptocurrencies creates new challenges for international oversight. Digital payment systems and cross-border online markets make tracking more complex - although on the other hand they also leave a data trail that can be analyzed.
"Blockchain can provide a lot of insights that are not always available in traditional financial systems," said Fierman.
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