Crypto Fuels Modern Warfare: Funding Missile Programs and Militias
Cryptocurrency is increasingly used to finance military operations and arms development. North Korea’s state-backed Lazarus Group stole $1.5 billion in crypto—20% routed to untraceable wallets and an estimated 40% funding ballistic missile research. In Ukraine, legal reforms enabled $78 million in crypto donations since 2022, of which $54 million purchased helmets, weapons, and vehicles; however, only 1% was in Bitcoin. Russia raised $2.2 million via 54 sanctioned entities for drones and armor. Hamas also solicits crypto, though U.S. authorities seize such funds. Meanwhile, defense-analytics firm Palantir accepts Bitcoin payments and holds a $10 billion U.S. Army contract, sparking speculation about a future corporate crypto reserve. This trend underscores crypto’s dual role as both a store of value and a weapon of war.
Bearish
News that cryptocurrencies are facilitating financing of missiles, militias and sanctioned groups will likely prompt stricter regulation and heightened risk aversion. Traders may react negatively in the short term due to potential legal crackdowns, leading to volatility and sell-offs. In the long term, persistent regulatory pressure could dampen adoption and institutional inflows, weighing on market sentiment. Historical parallels include regulatory responses after major thefts (e.g., Mt. Gox) which triggered multi-month downturns. Overall, the article’s focus on illicit use cases creates a bearish outlook for crypto markets.