Russian intelligence services have turned to Bitcoin to compensate teenage and amateur spies, a Reuters probe shows. The investigation, carried out with Global Ledger and Recoveris, follows the arrest of Canadian national Laken Pavan.
He was jailed in Poland after admitting he had helped the FSB, Russia’s main security agency, by relaying military information in exchange for cryptocurrency.
Teenage Spy Case
In May 2024, 17‑year‑old Pavan found himself stranded in Copenhagen with little money. Recruited weeks earlier in Russian‑occupied Donetsk, he messaged his FSB handler, known only as “Slon,” to ask for Bitcoin.
A wallet transfer of about $130 arrived minutes later. Pavan then booked a flight to Warsaw, where he confessed to hotel staff while drunk and asked police for help.
Court documents show he planned to pass details on Polish troop movements to his handler. In December, a Polish court sentenced him to 20 months in prison.
On‑Chain Tracing
Reuters, with blockchain analysts, traced the Bitcoin payments through public ledger data.
The funds that reached Pavan came from two smaller wallets. Those wallets, in turn, were funded by a larger account that has handled more than $600 million since June 2022, just months after Russia’s full‑scale invasion of Ukraine.
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While the owner of that main wallet remains unknown, the trail illustrates how the FSB can move large sums of cryptocurrency around the globe without relying on banks.
Broader Crypto Use by Russia
The use of digital coins is not limited to spying. Reuters found that Russia also funds private mercenary groups in eastern Ukraine with cryptocurrency. There is evidence that it has paid European politicians to spread pro‑Russian and anti‑Ukraine messages.
Crypto’s speed and lack of traditional oversight make it ideal for Moscow to skirt international sanctions. Recoveris CEO Marcin Zarakowski noted that Bitcoin transactions can cross borders instantly, with few restrictions until funds are cashed out.
New Rules at Home
At the same time, Russia’s central bank has introduced rules allowing qualified investors to trade financial products tied to crypto prices. Banks and licensed firms can now offer derivatives and securities whose value depends on digital coins.
These instruments must be settled in cash, so no actual cryptocurrency changes hands. The move aims to bring crypto activity under formal oversight, even as state agencies exploit it for covert operations.
Why This Matters?
This pattern shows how lightly regulated digital assets can serve both state power and private profit. High transparency on‑chain lets investigators track big transfers.
Yet hidden links and off‑chain deals keep the real beneficiaries in the shadows. Teenagers like Pavan can find themselves caught between promises of fast cash and the harsh reality of prison.
With sanctions unlikely to ease, Russia will probably continue using cryptocurrencies to fund a variety of covert aims. The FSB and other agencies value the speed and anonymity that digital coins provide.
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