$4.1 Million in Cryptocurrency Funneled to Ukrainian Military Since Russia Invasion

Donations channeled to the Ukrainian military in cryptocurrencies like bitcoin are in the millions of dollars, according to new data from blockchain analytics firm Elliptic.

Research shows that $4.1 million in crypto has been raised by non-governmental organizations and volunteer groups in Ukraine since the invasion began, including a single donation of $3 million early Friday.

On Thursday alone, an NGO received over $675,000 in bitcoins, and by Friday morning that number had jumped to over $3.4 million with this one-time $3 million donation.

For years, volunteer groups have played a crucial role in the Russian-Ukrainian conflict. These organizations increased the work of the Ukrainian army by providing additional resources and manpower. When pro-Russian Ukrainian President Viktor Yanukovych was ousted in 2014, for example, legions of organized volunteers rallied in support of protesters.

Typically, these organizations receive funds from private donors through bank transfers or payment apps, but cryptocurrencies such as bitcoin have become an important alternative funding method, as they enable rapid cross-border donations that bypass financial institutions likely to block payments to Ukraine. .

“Cryptocurrency is particularly suited to international fundraising because it respects national borders and is resistant to censorship – there is no central authority that can block transactions, for example in response to penalties,” said Tom Robinson, Elliptic’s chief scientist.

Activists have deployed the crypto for a variety of purposes, including equipping Ukraine’s military with military equipment, medical supplies and drones, as well as funding the development of a facial recognition app that identifies if someone is a mercenary or a Russian spy.

“Cryptocurrency is increasingly being used to finance war, with the tacit approval of governments,” said Robinson of Elliptic, which sells blockchain analytics tools to banks and some of the biggest platforms. of cryptocurrency in the world, including Binance and Circle.

One such group, Come Back Alive, which began accepting cryptocurrency in 2018, provides the military with equipment, training services and medical supplies. It also funded the development of a drone-based reconnaissance and targeting system for Ukrainian artillery units.

Other groups supporting Ukrainian resistance efforts have asked for donations of crypto assets, such as non-fungible tokens or NFTs.

As Ukraine’s central bank cracks down on digital money transfers under a nationwide declaration of martial law — and Moscow unleashes airstrikes and ground troops — some Ukrainians are also turning to cryptocurrencies.

Kuna, a popular Ukrainian crypto exchange, shows that domestic buyers are paying a premium for Tether’s stablecoin USDT, which is pegged to the price of the US dollar.

“We don’t trust the government. We don’t trust the banking system. We don’t trust the local currency,” Kuna founder Michael Chobanian said in an interview. with Coindesk. “The majority of people have nothing else to choose but crypto.”