Many charitable initiatives are operating worldwide, and they face the same problem – the restrictions imposed by the traditional banking system slow down the funds’ flow to Ukraine. The critical point is that Ukrainians have no time to wait until all bureaucratic procedures are completed since it’s impossible to ask the war to slow down, artillery shells and missile strikes – make a pause, and invaders – postpone the next offensive to next week.
During one of the U.S. In The Senate hearings, Financial Crimes Enforcement Network (FinCEN) director Michael Mosier claimed that digital funds are getting to Ukraine much faster than UN aid. At the same hearing, Montana State Senator Steve Daines said:
“Cryptocurrencies have the potential to be a tool to revolutionise finance, as evidenced by the speed at which crypto donations are pouring in from all over the world”
The sooner aid arrives, the better. The need for ammunition, weapons, and humanitarian support is constantly growing as the russian army keeps killing and destroying Ukrainian people and cities. The occupiers turn Ukrainian towns into entire ruins, torture, rape, and murder. All that they can’t destroy, they steal and take to russia.
Helping Ukraine is a matter of global security because the stakes are very high. If russia succeeds, it will destroy the world order based on laws and treaties established after the Second World War.
Where It All Began?
As mentioned above, a significant part of the world’s aid to Ukraine since the beginning of the full-scale invasion has come in cryptocurrency. Digital assets have become one of the crucial ways to bypass the bureaucracy of financial systems and quickly raise funds from all over the world for the needs of Ukraine and Ukrainians.
Probably every Ukrainian remembers when Patreon blocked the “Come Back Alive” fund at the beginning of a full-scale war, reasoning that it was “support for violence”, contrary to the platform’s rules. For those who missed this story, about 250 thousand US dollars were blocked on the Patreon of the “Come Back Alive” fund on the second day of the full-scale war.
1/2 We understand people's desire to support humanitarian activities in #Ukraine. Patreon does not allow funds raised on the platform to be used to support violence or purchasing of military equipment.
— Patreon Support (@PatreonSupport) February 25, 2022
Such a tweet was published by the Patreon team at the time when the Russian troops were trying to land in the government quarter of Kyiv.
That was the last straw. After that, the Ukrainian crypto community and the civilized world realized it was time to take the initiative.
Digital assets came to the rescue. “Come Back Alive” added the opportunity to donate cryptocurrencies, facilitating the fund’s work. So what is crypto’s role in Ukraine’s defense, and how did it become a lifeline for donations? Let’s talk about it.
Crypto – a Lifeline in a Sea of Bureaucracy
The cryptocurrency industry has made a giant leap in recent years. Donations in cryptocurrencies have become not just commonplace – they are constantly growing in number, and since the beginning of the war on the territory of Ukraine, crypto donations have increased enormously.
Dynamics of income to the “Return Alive” fund in February-March 2022
Since the beginning of Russia’s full-scale offensive on Ukraine’s territory, the Ukraine government also started to rely on crypto. At the end of February, the Ministry of Digital Transformation opened official accounts for raising donations in digital currencies. Mykhailo Fedorov, who previously tweeted out crypto wallet codes so Ukraine could accept donations in the form of Bitcoin and Ethereum, announced that the government is minting 54 non-fungible tokens (NFTs) to raise awareness and cash to fight against invading Russian forces.
To facilitate the sales, Fedorov launched the Meta History: Museum of War NFT site, so buyers could purchase their digital artwork from 5 p.m ET on Mar. 30. The NFTs can be seen as a pseudo-war bond, where people can invest in the certificates of ownership for digital assets as debt security. The Ukrainian government will mint the NFTs on the Ethereum blockchain using a platform built by the company Fair.xyz. It will sell each NFT for 0.15 ETH, or around $500, and buyers can then sell or auction the NFTs on secondary markets, which the Ukrainian government will also take a cut from.
As of the beginning of the summer of 2022, that is, for more than three months of a full-scale war, the total amount of donations in crypto assets exceeded $100 million, of which more than $60 million went to the Aid For Ukraine crypto fund. With this money, the crypto fund buys transport for the front line, drones and other necessary ammunition for the Ukraine armed forces.
Ukrainian crypto businesses joined the fundraising company too. Blockchain company Everstake donated $10 million in crypto – $3.4 million went to the Aid For Ukraine crypto fund. That is enough to purchase over 5,000 pieces of body armor, each of which saves the lives of Ukraine’s defenders.
Statistics of receipts to the Aid For Ukraine crypto fund
Bitcoin Strikes Occupiers: the Largest Donations in Support of the Armed Forces of Ukraine
In the first months of a full-scale war, crypto worked miracles. Starting from February 2022, large crypto donations began to flow into the funds. Until February 24, the role of cryptocurrency was insignificant – donations did not exceed a few hundred dollars a day, but then everything changed dramatically.
Roman Kiyashko, manager of the “Come Back Alive” fund, said that in February-March, one-time donations amounted to hundreds of thousands and even millions of US dollars. On February 25, the Come Back Alive Foundation received one of its largest single donations from an anonymous millionaire. The donation amount was 80 BTC or the equivalent of $3 million (at the exchange rate at the time of the donation).
Important to mention that donations arrived not only in Bitcoins. As a matter of fact, popular BTC and ETH accounted for only a third of donations each. The rest donations came in other cryptocurrencies, mostly stablecoins, primarily in USDT.
Advantages of Crypto Transfers
Crypto donations have become popular due to the high speed and efficiency of transaction processing. Decentralization is the core of the crypto industry, and it matters a lot.
- Speed. While cross-border transfers in traditional fiat currencies take several days or even weeks, transactions in crypto take minutes or hours (depending on the coin). Moreover, without the need for bank approvals, crypto purchases are faster than fiat currencies since banks usually require a bunch of documents and proceed with payments with weekly delays.
- Decentralization. There are no intermediaries in the blockchain. The absence of middlemen saves much money, time and nerves. For example, crypto implies no bank would hold money and check its origin or organization that would close the recipient’s account when they wish. So decentralization matters.
- Anonymity. Foreigners are afraid to be accused of financing the war, especially business representatives and especially from russia. As practice has shown, there are still sane and adequate Russians who are trying to support Ukraine. They cannot transfer funds in fiat physically, as they will be immediately accused of financing “terrorism” and imprisoned. Crypto wallets do not show the user’s name while at the same time providing a high level of privacy. It allows people on the other side of civilization to take the side of good with minimal risk.
Crypto Volunteers: Helping Millions of People in Need
Helping the army fighting against the russian invaders is one of many things the global cryptocurrency market can do. As statistics show, the market demonstrated rapid growth and development in the Ukrainian segment over the past few years. Here are the results of Global Crypto research for the past year:
- the annual turnover of cryptocurrency in Ukraine exceeded $8 billion;
- the volume of transactions reached $100 million per day;
- every eighth Ukrainian (approx. 5.5 million people) owned crypto.
Ukraine was ranked third in the ranking of the global index of crypto use in 2022, compiled by the analytical company Chainalysis.
The results of the Global Crypto research reveal that Ukraine is a modern digital state. Binance Ukraine CEO Kiril Khomiakov explained in the following way:
“The war stirred the crypto market, boosting the number of transactions. In times of upheaval, people usually try to find a defensive asset, and in Ukraine, they choose cryptocurrency.”
Therefore, it is not surprising that crypto exchanges and digital platforms have thought not only about helping charitable foundations and volunteers but also supporting individuals, primarily the least protected segments of the population. For example, in the first days of a full-scale war in Ukraine, the Binance crypto exchange transferred $10 million to Ukraine and created the Binance Charity Foundation, completely restructuring the company’s marketing policy to support users and those in need of help.
When the number of refugees from Ukraine exceeded 5 million people, Binance modified its corporate classification, and Ukraine finally moved from the CIS region to the Central and Eastern Europe region. It allowed mothers with kids who fled from the war zones to receive Binance cards. However, the Law “On Virtual Assets” signed by the President of Ukraine in March 2022, which will allow Ukrainian banks to open accounts for crypto companies, and Ukrainians to protect their savings in virtual assets, will start working only after the changes in the Tax Code are applied. That means crypto cards for refugees can be opened only in Europe so far.
Since the NBU restrictions imposed during martial law made it difficult to transfer funds from Ukraine to EU countries, cryptocurrencies have become a quick and convenient way for many Ukrainians to replenish their wallets. In EU countries, they can use crypto wallets without restrictions and issue physical cards to pay for goods and services.
The Binance initiative, supported by the Ministry of Digital Transformation, allowed refugees to receive transfers without fees and pay for goods and services with such a card without the need to convert cryptocurrency into fiat (traditional money), even without the official status of a resident of a European country and permanent residence.
In addition, the most vulnerable groups of refugees could register and receive financial assistance from Binance and other crypto companies – the equivalent of $75 per month per person for three months. This aid was delivered to 5000 refugees, including single mothers, people suffering from chronic diseases and representatives of ethnic minorities (the crypto exchange team launched a local verification project).
Now Binance is working on cryptocurrency cards that could be used in Ukraine without restrictions and preparing several partnership programs that will allow citizens to pay for goods with crypto and is also conducting a joint project with the Ministry of Digital Development for retraining internally displaced persons – IT Generation.
So, February 24, 2022, was the point of no return, both in the real and virtual world. Ukraine is resisting and fighting not only for its own existence – it stands guard over the entire Western civilisation.
The crypto community became a reliable and most important operational home front. This confrontation between a dark past and a bright technological future can be clearly seen today. History is happening right now, and there is no place for tyranny, violence and bureaucracy, which means a bright future for the cryptocurrency industry and Ukraine.
Glory to Ukraine!