According to recent statistics from blockchain analytics firm Elliptic, donations to the Ukrainian army in cryptocurrencies like bitcoin are in the millions of dollars.
According to research, nongovernmental organisations and volunteer groups in Ukraine have generated $4.1 million in cryptocurrency since the invasion began, with a single $3 million donation made early Friday. One NGO received almost $675,000 in bitcoin on Thursday alone, and by Friday morning, that total had risen to over $3.4 million thanks to the one-time $3 million payment.
Volunteer groups have played an important part in the Russia-Ukraine war for many years. By providing additional resources and manpower, these groups have supplemented the efforts of Ukraine’s military. When Viktor Yanukovych, Ukraine’s pro-Russian president, was deposed in 2014, armies of organised volunteers rushed to the aid of demonstrators.
Typically, these organisations receive funds from private donors via bank wires or payment apps, but cryptocurrencies like bitcoin have emerged as a popular alternative funding method because they allow for quick, cross-border donations that avoid financial institutions that may block payments to Ukraine.
Activists have used the cryptocurrency to fund the construction of a facial recognition system that can tell if someone is a Russian mercenary or spy, as well as supporting the Ukrainian army with military equipment, medical supplies, and drones.
The Ukrainian Ministry of Defense, on the other hand, has stated that it will not take cryptocurrency donations directly. “National legislation does not allow the Ministry of Defense of Ukraine to use other payment systems (‘Webmoney,’ ‘Bitcoin,’ ‘PayPal,’ etc.),” according to a statement on the government’s website. While the military accepts donations for logistics and medical assistance, those contributions must be made through regular channels.
Some Ukrainians are resorting to cryptocurrencies as the central bank cracks down on digital money transfers in connection with a statewide declaration of martial law — and Moscow unleashes airstrikes and ground forces.
Domestic consumers are paying a premium for Tether’s USDT stablecoin, which is tethered to the price of the US dollar, according to Kuna, a major Ukrainian crypto exchange.
Come Back Alive, for example, began taking cryptocurrencies in 2018 and provides military equipment, training, and medical supplies. It also helped Ukraine’s artillery battalions construct a drone-based reconnaissance and targeting system. Other organisations assisting the Ukrainian resistance have requested donations in crypto assets such as nonfungible tokens, or NFTs.