Ukraine acquires $70 million in crypto donations during Russia’s invasion

Ever since the Russian-Ukrainian issue began, Ukraine has received around $70 million in cryptocurrency, which has helped the country with funds needed for humanitarian support and military equipment.  

Chainalysis has shared the numbers in its report published on February 24 and outlined that most of the funds are in the form of bitcoin or ether. 

ETH donors have led to the accumulation of $28.9 million, while BTC donors have helped with $22.8 million, and lastly, Tether donors have led to $11.6 million.

NFTs are other ways in which donations have been made. For instance, the Ukrainian flag NFT auction by UkraineDAO made $6.1 million. In the entire $70 million donation, 80% came in the initial months of the war.   

Alex Bornyakov, Ukrainian deputy digital minister, said that using the usual financial system was time taking. However, with crypto, it was possible to protect the purchase of important items quickly. Also, over 60% of suppliers accepted crypto, which was unexpected. 

Bornyakov further said that the “Crypto Fund Aid For Ukraine” proved successful and the total donations were surprising. What was even more surprising was the ease with which the funds were accessed by the digital ministry for the defense of the nation. 

The co-founder of Ukraine DAO Alona Shevchenko, shared that cryptos offered a solution at a time when restrictions were regulated on the Ukrainian central banking system. 

Shevchenko added that the limits were introduced on foreign currency transfers to stop the run on the hryvnia. However, cryptocurrencies helped meet certain immediate needs as there was no other way available. 

Ukraine’s vice prime minister and minister of digital transformation, Mykhailo Fedorov, tweeted in August that maximum crypto payments to the digital ministry were used for the military equipment of the country besides vehicles, medicines, and armor clothing. 

Dependency on cryptocurrencies in Ukraine seems to have increased their adoption in the nation, as a report by Chainalysis in September found Ukrainians to be the third-highest adopters. 

Pro-Russian military groups have used crypto for the purpose of crowdfunding their war efforts, which includes funding military purchases through crypto donations, spreading disinformation, as well as creating pro-invasion advertising.

During the period of war, 100 groups got $5.4 million, though incoming donations have decreased since July. 

The effect of sanctions on the downtrend is unclear; however, a 10th package of sanctions was launched on February 24 against Russia. 

According to Chainalysis’ recent crime report, out of the $456.8 million in ransomware payments in 2022, most of the funds were taken by Russian-based actors.

Chainalysis shared that bad actors used such attacks for political agendas. For instance, Conti, a Russian pro-conflict ransomware group, captured $66 million from victims last year.

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