Russia is turning crypto into a weapon on Britain’s streets

Yet one crucial detail has barely entered the national conversation: the alleged payment mechanism.

According to court reporting, the arsonist was promised thousands of pounds in cryptocurrency by a Telegram handler known as “El Money”. Police have not proved that the Starmer-linked attacks were directed by the Russian state, and that caveat matters. But the case still exposes the method hostile networks now use: encrypted messaging, disposable recruits, and digital payment. Between online anonymity and real-world violence, cryptocurrency has become an operational tool.

This is not a niche financial-crime problem. It is a national security threat. Cryptocurrency is increasingly used to move funds for sanctions evasion, proxy sabotage, terrorist-linked activity and organised crime. For the UK, the danger is already visible.

Consider the Ukrainian aid warehouse in Leyton. A London warehouse storing humanitarian aid and Starlink satellite equipment destined for Ukraine was set alight in an attack carried out on behalf of the Wagner Group. The fire caused around £1 million in damage and required 60 firefighters. The judge described the plot as part of a planned campaign of terrorism and sabotage in the interests of the Russian state.

That attack was not “over there”. It was here, in east London, aimed at Britain’s support for Ukraine.

Nor is arson the ceiling of ambition. European investigators have uncovered a Russian-linked parcel-bomb network in which incendiary devices were hidden inside ordinary packages and sent through courier systems bound for the UK. Parcels caught fire in Germany, Poland and at a DHL warehouse in Birmingham. Lithuanian prosecutors said suspects were recruited through Telegram, compartmentalised to preserve secrecy and promised payment in cryptocurrency. The apparent objective was chilling, to test whether devices could move through logistics networks and, potentially, onto aircraft.

This is modern hostile-state warfare. It arrives as a Telegram message, a crypto wallet, a local criminal, a courier job, a warehouse fire, a parcel. A few hundred or a few thousand pounds can buy reconnaissance, vandalism, arson or transport.

Crypto is the connective tissue.

Russia’s use of digital assets now sits at the intersection of three threats.

First, sanctions evasion. Moscow is building financial rails outside the conventional banking system. The ruble-backed stablecoin A7A5 is the clearest warning. It has been the main use for Russia’s sanctions evasion activity, and has processed over $100 billion in its first year of operation alone. This displays how quickly a politically aligned stablecoin can become infrastructure for a war economy.

Second, proxy warfare. Russia can recruit online, pay remotely and discard operatives when they are caught. Cryptocurrency lowers the barrier to entry for sabotage. It makes recruitment cheaper, attribution slower and payments easier to route across borders.

Third, the merger of hostile-state activity and organised crime. The same no-KYC cash-out routes that serve ransomware gangs and sanctioned oligarchs can also serve intelligence-linked operations. The old distinction between “financial crime” and “national security” is collapsing.

Britain’s response must catch up.

First, the UK should treat Russian-linked crypto infrastructure as hostile infrastructure. Exchanges, brokers, issuers and facilitators connected to A7A5, Garantex, Grinex and successor networks should face aggressive sanctions and exclusion from the legitimate financial system. A platform helping Russia evade sanctions is not a neutral technology business. It is part of the Kremlin’s war machine.

Second, Britain needs a dedicated hostile-state crypto-finance taskforce, bringing together the intelligence agencies, police, the National Crime Agency, HM Treasury, OFSI, the FCA and private blockchain analytics firms. Crypto moves in minutes; government often moves in months. If a wallet is being used to pay saboteurs, intelligence must be identified and acted upon quickly.

Third, the UK must attack the conversion layer: the brokers, over-the-counter desks and informal cash-out services that turn digital assets into usable money. The blockchain often leaves a trail. The weak point is where crypto becomes cash, prepaid cards, commodities or local currency. No-KYC cash desks should not operate as blind spots in Britain.

This does not mean treating every crypto user as a criminal. Britain should not ban innovation or punish responsible digital-asset firms. But there is a vast difference between legitimate financial technology and a ruble-backed sanctions-evasion coin serving Russia’s war economy.

The public debate is behind the threat. We talk about Russian tanks, missiles, drones, disinformation and cyberattacks. We talk far less about the payment rails that turn Moscow’s intent into action on British streets.

Money is operational. A hostile state that can pay anonymous proxies in cryptocurrency can reach inside our borders, burn warehouses, test aviation routes, intimidate politicians and undermine support for Ukraine while hiding behind disposable recruits and fragmented wallets.

The fires in London were not just fires. They were a warning. Russia has found a way to turn digital money into physical danger. Britain must shut that system down.

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Alexander Browder is an associate fellow at the Henry Jackson Society. He was recently sanctioned by Russia due to his work exposing how Russia uses cryptocurrencies to bypass sanctions. He is the youngest person to be sanctioned by the Kremlin.

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