UKRAINE AND CRYPTO
Author: Elisabetta Caglio, Content Creator
It is one year since Russia invaded Ukraine and during this conflict the Ukrainian government have received donations of millions of dollars in the form of cryptocurrency.
Mykhailo Fedorov (a Ukrainian politician) said that the crypto have helped to supply the armed forces and it has allowed the purchase of bulletproof vests, walkie talkies and helmets. Other funds turned to humanitarian causes, and even journalism and intelligence efforts.
Nearly $5 million in cryptocurrencies were donated and these funds represents at least one-fifth of overall aid to Ukraine. Many of these donations were originated from exchanges and mixing services (a particular slice of crypto technology), thanks to Telegram (a messaging platform).
For the first time in history crypto has played a significant role in a major conflict and, especially in Ukraine, it has shown to have some social utility.
But unfortunately, it is necessary also to consider the other side of the coin. In fact, the “particularly brutal” use of crypto has spread. One example is a fighting group known for neo-Nazi symbolism called Rusich, which has been trying to extort bitcoins from families by promising the coordinates of their dead relatives.
Furthermore, despite numerous US and European sanctions that have tried to exclude Russia from traditional and digital global payment systems, illicit Russian cryptocurrency transactions have not stopped. So, this situation has led to an increase of the share of crypto activity associated with illicit operations, going from 0.12% in 2019 to 0.24% in 2021.
Also, the rate of Ukrainian donations declined while Russia is much more stable in terms of funds flowing in. If Russian crypto fundraising doesn’t slowdown in the coming months, it could become a huge issue.
As a result, it cannot be fully stated that crypto as a benefit for all because the truth is not so clear.