Russians are sending money via cryptocurrency to help Ukraine

President of Ukraine Volodymyr Zelenskiy visited soldiers in Kherson, Ukraine. Photo: Reuters

Russians, angered by President Vladimir Putin’s invasion, are sending “significant amounts of money” through cryptocurrency channels to help Ukraine, his deputy digital minister said.

Two days after Putin’s troops and tanks crossed the international border between Russia and Ukraine on February 24, 2022, Ukrainian government Twitter accounts posted requests for cryptocurrency donations.

Blockchains are transparent publicly distributed ledgers, and since then, Ukraine has been analyzing where crypto donations are sent from around the world.

The war-torn country has been able to determine that more than 100,000 people have sent aid to Ukraine through cryptocurrency channels.

“Donations to Ukraine have ranged from one dollar to millions of dollars,” Ukraine’s Deputy Digital Minister said Alex Bornyakov This was reported by Yahoo Finance’s The Crypto Mile.

“Crypto offers an anonymous way of transferring money in certain cases. We have seen that some Russians are donating to us in significant amounts,” added Bornyakov.

“The Russian people who donated sent a large amount of money.

“I understand that there is no other way to do this than with cryptocurrency from within Russia.”

To date, the majority of crypto donations received by Ukraine have been in bitcoin (BTC-USD) and ether (ETH-USD), although USD stablecoins have contributed a significant proportion.

A third of the donated amount came through the Cryptofund Aid to Ukraine initiative, backed by Ukraine-based cryptocurrency Kuna and blockchain company Everstake, and supported by the Ministry of Digital Transformation of Ukraine.

Among the most popular digital asset donations sent to Ukraine are bitcoin, ethereum, cardano (ADA-USD), solana (SOL-USD), polkadot (DOT-USD), and stablecoins such as USDC (USDC-USD) and USDT (USDT). -USD).

“So far, Ukraine has bought about 650 bitcoins, more than 10,000 ethereum, and also a considerable amount of polkadots, almost 1.8 million solans and $2.8 million in USDC stablecoins,” the deputy digital minister added. .

Ukrainian crypto and blockchain industry

Since the beginning of Russia’s invasion of Ukraine, cryptocurrency exchange Kuna, founded in December 2015 by Ukrainian Mykhailo Chobanian, has emerged as the country’s largest crypto-fundraising platform.

The Ukrainian government uses Kuna to cash cryptocurrency sent from around the world.

According to Crystal Blockchain Analytics, as of November 30, more than $184 million in cryptocurrency has been raised to support Ukraine.

These include a $1.86 million transaction from the sale of NFTs Julian Assange and Pak.

And about $200,000 worth of CryptoPunk NFTs were also sent to the Ukrainian government’s Ethereum account.

Ukraine’s Live Return NGO, which supports the country’s military, received several million dollars in crypto donations, according to a study by blockchain analytics firm Elliptic.

However, crowdfunding and content creation platform Patreon suspended the Come Back Alive page on February 24 due to policy violations related to its military activities.

For those who want to send cryptocurrency to help the country and its citizens, a donation in cryptocurrency can be made through the website. However, since the collapse of FTX in November 2022, the website link now redirects to the official Ukrainian government donation site.

Ukraine’s war-torn economy

Electricity has been curtailed across the country due to Russia’s recent missile strikes on Ukraine’s energy infrastructure. The window during which Bornyakov could be interviewed by Yahoo Finance UK was limited.

Russia’s occupation seriously affected the economy of Ukraine. The country has faced declining industrial production, rising inflation and a depreciating currency.

The loss of Crimea and its industries during Russia’s annexation of the region in February 2014 also disrupted trade and investment, causing Ukraine’s GDP to fall and unemployment to rise.

In addition, the country has had to cope with increased military spending and support for internally displaced people, further exacerbating the economic impact.

The International Monetary Fund (IMF) estimates that the conflict cost Ukraine at least a third of its GDP in 2022. Ukraine’s own economic data shows a 30.4% drop in GDP since the start of the war.

“In 2022, Ukraine’s economy suffered the biggest loss and damage inflicted on it by the Russian Federation in the entire history of its independence,” Ukraine’s economy minister and first deputy prime minister, Yuliya Sviridenk, said in a statement in January.

The drop in GDP is characterized as the largest drop in any year since Ukraine gained independence from the Soviet Union in 1991.

Ukrainian DAO and Russian political activist Nadya Tolokonnikova

Leading political activist and member of Pussy Riot in July 2022 Nadia Tolokonnikova NFTs can make powerful statements about civil disobedience and protest, he told The Crypto Mile.

Tolokonnikova is a co-founder Ukrainian DAO (decentralized autonomous organization) raising $6.75m (£5.66m) in ethereum in five days for organizations helping war-torn Ukrainians who have devastated their country. Funds were collected by selling NFT with the image of the Ukrainian flag.

Speaking on episode 4 of The Crypto Mile, he said that NFTs can be used for political purposes: “Ukraine DAO actually allowed a lot of people from Russia to donate to Ukraine, otherwise they couldn’t send money because it was blocked by the Russian banking system “.

While blockchain is a publicly visible distributed ledger that transparently records all transactions, the system is outside of centralized authorities and crypto wallets that send and receive money can remain anonymous.

Read more: UK unveils ‘world first’ plans to regulate crypto and digital assets

“When you raise money for activism, it’s often for very sensitive topics that can cause trouble, so cryptocurrency can provide a layer of anonymity,” Tolokonnikova said.

The co-founder of the art-activist group Pussy Riot also launched the Unicorn DAO in May 2022.

The Unicorn DAO has pledged to use the NFT space to “redistribute wealth and visibility to create equality for women-defined and LGBTQ+ people.”

The movement cites ArtTactic’s 2021 report that found only 5% of NFT sales were by female-identified artists.

Alex Bornyakov, Deputy Minister of Digital Transformation for Ukraine, speaks at the SALT conference in Manhattan, New York, USA.

Alex Bornyakov, Deputy Minister of Digital Transformation for Ukraine. Photo: David ‘Dee’ Delgado/Reuters

The integration of NFTs, DAOs and Decentralized Finance (DeFi) is changing the way charities collect donations and distribute funds to those in need.

Crypto advocates told the Cointelegraph news agency that the new technology has led to the creation of “new wealth distribution mechanisms.”

According to crypto-author Anne Connelly, every organization will eventually have a crypto donation platform just like they accept credit cards.

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See: Bitcoin Set to Explode Ahead of Fed Rate Meeting – The Crypto Mile Weekly Update

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