Ukraine has received over $70 million in cryptocurrency since the start of the Russo-Ukrainian conflictproviding the nation with funds for military equipment and humanitarian aid.
The figures come from a February 24 report by blockchain data platform Chainalysis, which found that most of the funds have come in the form of ether (ETH) and bitcoin (BTC).
ETH donors topped the list with $28.9 million, while BTC and Tether (USDT) contributed 22.8 and 11.6 million.respectively.
Donations have also come in the form of non-fungible tokenssuch as UkraineDAO’s auction of an NFT Ukrainian flag that sold for $6.1 million.
About 80% of the total USD 70 million donated came in the first months of the war; the speed of cryptocurrency payments accelerated the country’s ability to respond to the Russian invasionexplained Ukrainian Deputy Digital Minister Alex Bornyakov in an interview with Yahoo Finance on February 24:
“If we used the traditional financial system, it would take us days […] We were able to secure the purchase of vital items in a very short time through cryptocurrency, and what is surprising is that around 60% of the vendors were able to accept cryptocurrency, which I did not expect.”
Bornyakov added that the Crypto Fund Aid For Ukraine was an “absolute success” and that he was amazed not only by the amount of donations that came in, but by the ease with which the digital ministry was able to access those funds for the defense of Ukraine.
Alona Shevchenko, co-founder of Ukraine DAO, also explained to Yahoo Finance that cryptocurrencies provided a solution when restrictions were placed on the Ukrainian central banking system:
“The central bank introduced limits on currency transfers in and out of Ukraine to stop the run on the hryvnia […] Thanks to cryptocurrencies we were able to cover some of the immediate needs of our defenders; there was literally no other way at the time.”
According to an August tweet from Mykhailo Fedorov, Ukraine’s Deputy Prime Minister and Minister of Digital Transformation, Much of the cryptocurrency payments to the digital ministry have been used to finance the country’s military equipment, armored clothing, and a number of vehicles and medicines..
With $54M raised by @_AidForUkraine, we’ve supplied our defenders with military equipment, armor clothes, medicines and even vehicles. Thanks to the crypto community for support since the start of the full-scale invasion! Donation by donation to the big victory. Report below. pic.twitter.com/lifHAP8R4f
— Mykhailo Fedorov (@FedorovMykhailo) August 17, 2022
With $54 million raised by @_AidForUkraine, we have supplied our supporters with military equipment, armored clothing, medicines and even vehicles. Thanks to the crypto community for the support since the start of the large-scale invasion! Donation to donation to the big win. Report below. pic.twitter.com/lifHAP8R4f
Increased reliance on cryptocurrencies in Ukraine seems to have increased adoption in the country; a September report from Chainanalysis found that Ukrainians are the third most adopters, behind Vietnam and the Philippines.
However, pro-Russian military groups have also used cryptocurrencies to raise money for their war effortsincluding the use of crypto donations to finance military purchases, spread disinformation, and create pro-invasion propaganda, according to Chainalysis.
The 100 groups have received a total of USD 5.4 million over the course of the warhowever, incoming donations have dropped considerably since July.
It is not clear what impact the sanctions have had on this downward trend, but the February 24 a tenth package of sanctions against Russia was introduced.
Meanwhile, a recent crime report by Chainalysis found that of the total $456.8 million paid for ransomware in 2022, most of these funds were stolen by “actors” believed to be based in Russia.
Chainalysis explained that These types of attacks are often used by malicious actors for political gain, such as Russia-based pro-conflict ransomware group Conti, which collected $66 million from victims in 2022 and has previously announced its “full support.” to the russian government.
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