Russia may have been using cryptocurrencies to fund espionage operations across EU countries, according to a Polish security official, Sławomir Cenckiewicz.

Speaking to the Financial Times,  Cenckiewicz, who serves as the chief of Poland’s national security, said Moscow was probably using this payment method to fund its shadow fleet to launch drone incursions and carry out acts of sabotage across European airspace, alongside other covert operations aimed at destabilizing the region.

The report comes just days after the Bank of Russia allowed select commercial banks to engage with the crypto market.

Cenckiewicz recalled that back in 2023, Polish authorities had uncovered a network of agents linked to Russia’s GRU military intelligence agency that had “to a high extent been financed with cryptocurrency,” and they are believed to be using a similar tactic.

Russia’s intelligence operatives and locally recruited agents have also infiltrated Poland, according to the Financial Times, and over the past years, several individuals have already been charged with spying or carrying out acts of sabotage on behalf of Moscow.

To counter Russia’s crypto funding efforts, Polish regulators are advancing a bill to strengthen digital asset regulation and oversight, which Cenckiewicz said was an important tool to close loopholes that could allow foreign powers to finance espionage or influence operations through cryptocurrencies.

“The Polish intelligences services are very much interested in this whole legislative process, to ensure there are no gaps that would allow foreign powers to use [crypto] to finance their agents,” Cenckiewicz said.

Russia’s reliance on crypto

Cryptocurrencies like Bitcoin are pseudonymous in nature and have the ability to move value across borders without traditional banking intermediaries. As such, they have long been used to conceal financial trails that are often difficult to trace.

Russia has a history of using cryptocurrencies to bypass sanctions, with some past reports suggesting the Kremlin may have also used them to fund acts of espionage.

According to researchers at TRM Labs, the GRU was allegedly involved in misinformation campaigns and spear-phishing attacks during the 2016 U.S. elections, which were funded using Bitcoin. Bitcoin was allegedly used to purchase servers, domains, and other tools to run the operation.

A more recent discovery came from blockchain analytics firm Elliptic, which flagged a vast operation linked to Russian oligarch Ilan Shor’s A7 group. The group allegedly processed billions of dollars in stablecoin transactions to evade sanctions and fund political interference in Moldova.

Data uncovered in the leaks revealed how Shor’s network used Tether (USDT) and the ruble-backed stablecoin A7A5 to move funds through intermediaries in Central Asia.