UK needs crypto special forces to stop Russia funding sabotage on British streets, expert warns
Russia is using cryptocurrency to help turn online recruitment into real-world attacks on British streets, a sanctions expert has warned.
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Alexander Browder, an associate fellow at the Henry Jackson Society, said digital assets are increasingly being used as an “operational tool” by hostile networks involved in sanctions evasion, sabotage, terrorism-linked activity and organised crime.
Writing for LBC Opinion, Mr Browder warned that the UK is already seeing the effects of this threat, from arson attacks and warehouse fires to alleged parcel-bomb plots linked to Russian interests.
He said: “This is not a niche financial-crime problem. It is a national security threat.”
The warning comes after court reporting suggested the man accused over fires at properties linked to Sir Keir Starmer was allegedly promised thousands of pounds in cryptocurrency by a Telegram handler known as “El Money”.
Read more: Two men jailed over arson attacks targeting Keir Starmer
Police have not proved that the Starmer-linked attacks were directed by the Russian state, and Mr Browder stressed that caveat matters.
But he said the case still showed the method now used by hostile networks: “encrypted messaging, disposable recruits, and digital payment”.
He wrote: “Between online anonymity and real-world violence, cryptocurrency has become an operational tool.”
Mr Browder pointed to the arson attack on a Ukrainian aid warehouse in Leyton, east London, where humanitarian aid and Starlink satellite equipment destined for Ukraine were destroyed in a fire carried out on behalf of the Wagner Group.
The blaze caused around £1 million in damage and required 60 firefighters.
A judge later 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’,” Mr Browder wrote. “It was here, in east London, aimed at Britain’s support for Ukraine.”
He also highlighted a Russian-linked parcel-bomb network uncovered by European investigators, 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 have said suspects were recruited through Telegram, kept compartmentalised to preserve secrecy and promised payment in cryptocurrency.
Mr Browder said the apparent aim was “chilling”: to test whether devices could move through logistics networks and potentially onto aircraft.
He wrote: “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.”
Mr Browder said Russia’s use of digital assets now sits at the intersection of three threats: sanctions evasion, proxy warfare, and the merger of hostile-state activity with organised crime.
He warned that Moscow is building financial systems outside conventional banking channels, pointing to the ruble-backed stablecoin A7A5 as a major concern.
He said the coin had become a key tool for Russian sanctions evasion and had processed more than $100 billion in its first year of operation.
Mr Browder said the UK should treat Russian-linked crypto infrastructure as hostile infrastructure, with exchanges, brokers, issuers and facilitators linked to A7A5, Garantex, Grinex and successor networks facing aggressive sanctions and exclusion from the legitimate financial system.
He wrote: “A platform helping Russia evade sanctions is not a neutral technology business. It is part of the Kremlin’s war machine.”
He also called for 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,” he warned.
Mr Browder said Britain must also target the “conversion layer” where cryptocurrency is turned into cash, prepaid cards, commodities or local currency.
He said this does not mean treating every crypto user as a criminal or punishing legitimate digital-asset firms.
But he warned there is a “vast difference” between responsible financial technology and crypto infrastructure being used to support Russia’s war economy.
Mr Browder, who was recently sanctioned by Russia for his work exposing how Moscow uses cryptocurrencies to bypass sanctions, said Britain’s public debate is still behind the threat.
He wrote: “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.”
He added: “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.”