Cryptocurrencies have featured heavily in the war, with nearly $30 million worth of crypto donations being sent in to support Ukraine’s defense and relief efforts. Even Russia is attempting to sidestep imposed sanctions by resorting to crypto payments.
Ukraine Receives Record Crypto Donations
According to the blockchain analytics firm Elliptic, around $17.2 million worth of funds have been raised through crypto donations by the Ukrainian government and other NGOs. The crypto exchange Binance is also raising an additional $10 million emergency fund to provide relief to Ukrainians affected by the war. As donations continue to flow into the country, mainly as Bitcoin, Ethereum, USD stablecoins, as well as NFTs, the total amount will exceed $30 million quite soon. Ethereum co-founder Vitalik Buterin has been strongly advocating crypto donations to fund humanitarian initiatives.
Martial Law Turns Citizens To Crypto
In addition to donations, the country’s citizens are turning to cryptocurrencies as martial law imposed across the country suspended all e-money transactions, including fiat currencies typically held on PayPal and Venmo. Furthermore, a ban has also been imposed on the issuance of foreign currency from retail bank accounts. As a result, Ukrainians and other people stuck in the country at the moment have now turned to crypto for local transactions. Local crypto exchange Kuna has pointed out that low faith in the Ukrainian banking system has pushed the citizens to opt for Tether’s USDT instead of their local currency.
Putin’s Plans To Evade Sanctions With Crypto
On the other hand, it looks like cryptocurrency is also being used as a tool by Russia to evade financial sanctions imposed by NATO. By staying out of the purview of any global financial system, cryptocurrencies function on a decentralized model. The Russian central bank has recently changed its stance from anti to pro-crypto, with President Vladimir Putin speaking out favorably for the digital asset. It is now obvious that Putin had preemptively paved the way for Russia to avoid financial sanctions by banking on cryptocurrency in preparation for the attack on Ukraine.
Addressing this issue, Mykhailo Fedorov, vice prime minister and minister of digital transformation of Ukraine, has requested crypto exchanges to freeze the accounts of both Russian and Belarusian users.
“I’m asking all major crypto exchanges to block addresses of Russian users. It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users.”
However, Jesse Powell, CEO of the crypto exchange Kraken, noted that such a move could not be taken without any legal precedent. He also added a warning to Russian users that a legal order demanded the same could be imminent.
In related news, local TV host and honorary ambassador of the United Nations Population Fund in Ukraine has claimed that Russian soldiers surrendering arms will receive $45,000 (or 5 million rubles) worth of crypto or cash, followed by amnesty after trial.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.