Binance Froze Russian Gun Maker's Crypto Assets, Amid Ukrainian Pressure

Vladislav Lobaev, a Russian gun manufacturer, raised $21,000 in crypto for the war in Ukraine before the world’s largest crypto exchange locked down the funds.

AccessTimeIconAug 31, 2022 at 3:10 p.m. UTC
Updated Aug 31, 2022 at 7:43 p.m. UTC
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Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.

Binance, the world’s largest crypto exchange by volume, froze a wallet related to Vladislav Lobaev, a Russian gun manufacturer who raised funds for the country's troops in Ukraine, according to a Lobaev representative and blockchain data analysis.

While the Ukrainian government did not mention Lobaev or anyone else by name, last week the Security Service of Ukraine (SSU) published a press release saying the agency “blocked a crypto wallet belonging to a Russian citizen who is sponsoring Russian war in Ukraine.” CoinDesk has confirmed that the wallet was Lobaev’s Binance account.

This article is part of CoinDesk’s Sin Week series.

Lobaev is a founder of Lobaev Arms, a private firm producing rifles and other military ammunition. He is an enthusiastic supporter of Russia’s invasion of Ukraine and regularly asks subscribers to his Telegram channel to donate money so that Lobaev can provide more ammunition for the Russian troops in Ukraine.

The channel listed several payment methods for subscribers to donate, including blockchain addresses for bitcoin (BTC), ether (ETH) and tether (USDT).

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Call for donations in Lobaev's Telegram channel

After the Ukrainian law enforcement discovered the fundraising activity, it apparently persuaded Binance to freeze the account, which by then had received over $21,000 in bitcoin, ether and USDT. Security Service of Ukraine do not respond to CoinDesk’s requests to comment.

Binance would not discuss the ownership of crypto wallets in question.

“Any government or law enforcement agency in the world can make lawful requests regarding users in their jurisdiction provided these are accompanied by the proper legal authority," a spokesperson for Binance said. "However, Binance also protects its users and reserves the right to reject law enforcement requests that don’t stand up to legal scrutiny, where no legal purpose is served or there are flaws in the investigative approach. We apply the same level of scrutiny to requests as any leading bank, financial institution or multinational company would."

‘Lobaev Z’

Vladislav Lobaev is a well-known gun manufacturer with right-wing views. Lobaev Arms, which Vladislav Lobaev runs with his brother Nikolay, has been producing firearms since 2003, specializing in sniper rifles. The firm benefitted from earlier sanctions on Russia, when the import of Western ammunition in Russia stopped, the state-run news service Sputnik wrote. The use of Lobaev’s rifles during the war in Ukraine has been advertised by Russian state media.

In his Telegram channel, Lobaev has been actively supporting Russia’s invasion of Ukraine and even re-named his channel as “Lobaev Z,” adding the letter Russian troops put on their vehicles, which became an unofficial symbol of Russia during this war. Lobaev praises Russian troops, analyzes weapons used by the Ukrainian army, and badmouths Ukraine, NATO and the LGBT community.

CoinDesk reached out to Lobaev via a feedback bot in his Telegram channel and got a response from a person saying he was Lobaev’s son Evgeny, who was in charge of the crypto fundraising. He confirmed Lobaev’s Binance account was frozen and said he did not know what to do in this case.

He also sent CoinDesk a screenshot of a chat with the exchange’s support team: According to the customer service rep, the account was “locked due to an account review.”

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Chat with Binance support team Lobaev's representative shared with CoinDesk

The exchange stopped accepting Russian bank cards this spring, following the international sanctions on Russia and the exit of MasterCard (MA) and Visa (V) from the country. Asked how he was able to cash out crypto from a Binance account, “Evgeny Lobaev” said he used over-the-counter (OTC) brokers.

He also said cryptocurrencies constituted “not a big part” of all the incoming donations. (Lobaev also uses Russian fiat payment service Yoomoney and an account at the Russian financial institution Sberbank.)

Evgeny Lobaev is not a public person and the rare mentions of him on the internet are usually related to the war. There is a LinkedIn account for a Evgeny Lobaev working as a supply chain coordinator at Lobaev Arms. The person who corresponded to CoinDesk via the Telegram bot did not respond to a question asking whether it was his LinkedIn account or not.

Evgeny Lobaev, according to some accounts, participated in the war himself. In an amateur video published on YouTube March 1, a man in military fatigues is smiling in front of artillery machines shooting. Another amateur video said this person was Evgeny Lobaev and he was captured by Ukrainian forces. Later, a Russian blogger known as WarGonzo published a clip showing a similar looking person, saying it was Lobaev and that he was not captured.

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Screenshot of a video of Evgeny Lobaev

“Lobaev” told CoinDesk he was not captured and he was now in Russia.

Blocked wallets

In its press release, the Security Service of Ukraine (SSU) said it “blocked a crypto wallet belonging to a Russian citizen who is sponsoring Russian war in Ukraine.” The agency said it identified the crypto wallets a certain individual used to raise funds for ammunition and arms that later was being sent to the troops invading Ukraine. The SSU said it was working on ways to confiscate the funds.

The individual, whom SSU did not name, managed to raise an amount equivalent to 800,000 Ukrainian hryvnias (US$21,700), the announcement said, and used that money to buy equipment for the troops of the self-proclaimed People’s Republics of Donetsk and Luhansk – breakaway Eastern regions of Ukraine that have received clandestine armed support from Russia since 2014. Since Russia started a full-fledged invasion of Ukraine in February, it has been actively recruiting the population of these regions for helping its own troops.

The Ukrainian news website Liga.net identified the individual SSU talked about by the photos in the press release with pro-Russian forces carrying weapons, which match photos on Lobaev’s Telegram channel (for example, this one and this one).

According to the blockchain analytics firm Crystal Blockchain, all crypto addresses Lobaev published for fundraising belong to Binance, the largest centralized crypto exchange.

This explains how the Ukrainian authorities were able to block the wallets. Decentralized blockchains, such as Bitcoin and Ethereum, do not allow anyone to block or freeze any addresses or transactions. However, centralized custodial exchanges, such as Binance, Coinbase (COIN), FTX, which hold cryptocurrency on their users’ behalf, can refuse service to individual users at the request of authorities.

This happened in the past to accounts that received money stolen from hacked exchanges or designated terrorists. Also, smart contracts for tokens created on top of blockchains, such as the contract that issues USDT, allow freezing individual wallets. Tether, the issuer of USDT, has done so in the past.

According to the blockchain data, the bitcoin wallet Lobaev listed for fundraising received over 6.4 BTC (about $19,700) since late April. The ether wallet received 3.25 ETH (over $1,500), a USDT wallet on the Tron blockchain received a little over $840 in the U.S. dollar-pegged stablecoin.

All the wallets have been mostly drained of funds, with the latest transactions recorded between late July and Aug. 14. This does not necessarily mean Lobaev was able to cash out all of his crypto donations: deposit addresses for exchanges can be just temporary storage for coins, and what is actually happening to users’ money is not fully reflected on the public blockchain, only in exchanges’ private records.

In July, analytics firm Chainlalysis said 54 pro-Russian militant and volunteer groups raised over $2,2 million on crypto via social media channels. These organizations used donations to buy firearms, medical supplies, satellite communication hardware and other products. The list included Terricon, a group led by the sanctioned Russian citizen Alexander Zhuchkovsky; Rusich, a group associated with the Russian mercenary group known as Wagner; and anonymously written blogs Rybar and SouthPost.


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Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.

CoinDesk - Unknown

Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.