With over 100,000 Russian troops stationed along the Ukrainian border, tensions are rising, and Ukrainians are turning to cryptocurrencies to fight back. According to research by blockchain analytics firm Elliptic, a number of Ukrainian non-governmental organizations (NGOs) and volunteer groups have been inundated with Bitcoin payments.
Ukrainians are using bitcoin to fund Russian war
Over the previous year, cryptocurrency donations increased by 900 percent to more than $570,000 in 2021. The cash was accessed through a variety of bitcoin wallets by the NGO and volunteer groups.
Elliptic’s Chief Scientist Tom Robinson was quoted by CNBC as saying, “Cryptocurrency is increasingly being used to crowdfund war, with the implicit agreement of governments.”
Local NGOs have begun to secure financial backing to supplement the activities of soldiers and volunteers in the face of government corruption in the last decade. When Ukraine’s pro-Russian president Viktor Yanukovych was deposed in 2014, legions of volunteers stepped up their efforts to support demonstrators during the Maidan Revolution.
Private donors typically send money to these NGOs via bank wires or payment apps. Donors have been using cryptocurrencies to bypass banks and other entities that might limit payments to Ukraine in recent years.
Activists have used the cash to provide equipment, medical supplies, and drones to the Ukrainian army. They are also investing in the development of a facial recognition app that will aid in the identification of Russian mercenaries or spies.
‘Come Back Alive,’ for example, provides military personnel with equipment, training, and medical supplies. Bitcoin donations increased to $200,000 in the last six months of 2021 for the organization, which began accepting cryptocurrencies in 2018.
Other hacktivist groups, such as the Ukrainian Cyber Alliance and Belarusian Cyber-Partisans, are waging cyberwarfare against Russian targets. The Ukrainian Cyber Alliance got about $100,000 in Bitcoin, Litecoin, Ethereum, and a variety of stablecoins last year.
Myrotvotrets Center, a Kyiv-based NGO that began taking cryptocurrency payments in 2016, is developing a facial recognition tool that will utilize images to identify “militants, Russian mercenaries, and war criminals.” So far, Bitcoin donations have totaled roughly $267,000 for Myrotvotrets Center.
CNBC quoted Boaz Sobrado, a London-based fintech data analyst, as stating that raising cash in crypto is advantageous because such assets are tough to confiscate.
The Ukrainians are copying the Russians’ usage of crypto assets for fundraising since the commencement of the Russo-Ukrainian War. Pro-Russian separatists in eastern Ukraine raised funds through a number of internet campaigns that accepted cryptocurrency payments.
The funds were transferred through Russian and international banks. Between 2014 and 2016, one such effort, dubbed “Save the Donbass,” collected at least 68 Bitcoin donations.
Despite the fact that bitcoin donations to Ukraine are on the rise, they still account for a small part of total funding. Traditional payment mechanisms continue to bring the majority of funds into Ukraine in fiat currencies.
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