It is unprecedented, blockchain solutions have demonstrated their power to contribute to the humanitarian effort for the Ukrainian people and support their beleaguered government. Prime Minister of Ukraine Denys Chmyhal’s appealed for donations on social media by posting three links for anyone to send bitcoin, ether, and stablecoin USDT to digital wallets:
The distribution of digital assets received by the Ukrainian government
Source: Elliptical
Raising crypto funds in Ukraine
Source: Elliptical
Hold on tight, no less than $63.8 million has been raised so far by the crypto funds dedicated to supporting Ukraine, and the deputy minister of digital transformation, Alex Bornyakov, n was quick to react to this surge of generosity.
“A big thank you to everyone who donated to the Crypto Fund for Ukraine. Every helmet and vest purchased through cryptocurrency donations is currently saving the lives of Ukrainian soldiers.”
The deputy minister even went so far as to share on Twitter the list of equipment purchased thanks to cryptocurrency donations.
Crypto assets proved extremely helpful in facilitating of funding flows to the Amed Forces of Ukraine. Huge thanks to everyone who donated to the Crypto Fund of Ukraine.
Each and every helmet and vest bought via crypto donations is currently saving Ukrainian soilders’ lives. pic.twitter.com/CghDmXEcJG
—Alex Bornyakov (@abornyakov) March 11, 2022
– 5550 bulletproof vests
– 500 combat helmets
– 3427 medical kits
– 410,000 food rations
– 60 walkie-talkies
– 3125 night and thermal vision equipment
Donations from the sale of NFTs (non-fungible tokens), these certificates of authenticity of digital objects, have also contributed to the humanitarian effort. A CryptoPunk NFT worth over $200,000 was sent to the Ukrainian government’s Ethereum account. Other NFTs worth millions of dollars were also sold, such as a Ukrainian flag NFT sold for $6.5 million in ether, making it one of the most expensive NFTs ever sold. .
The Ukrainian government has even launched in partnership with FTX, a cryptocurrency platform, a site to route bitcoins and cryptocurrencies directly to the Ukrainian central bank. It is clear that blockchain solutions have made it possible and still make it possible to support Ukraine in the face of the appalling situation it is currently experiencing. But does Russia benefit too?
Russia against cryptos
At first, the Coinbase and Binance platforms refused to cut Russian addresses and highlighted their apolitical nature. However, both exchanges claimed that they are now complying with international sanctions by blocking access to Russian oligarchs. If Binance remains more in the background by not communicating any figures concerning the blocking of Russian addresses, the American platform, Coinbase, affirmed for its part that it had identified and frozen no less than 25,000 addresses having “a direct or indirect link with people and problematic entities”.
To improve its image, the CEO of Binance, Changpeng Zhao, announced, via the “Binance Charity” entity, that he had donated $2.5 million in cryptocurrencies to UNICEF for Ukraine. Yes, because you may not know it, but UNICEF created a fund in 2019 allowing it to receive, store and disburse donations in cryptocurrencies. The United Nations Children’s Fund is therefore not at its first attempt.
It should be noted that Russia is no stranger to cryptocurrencies. It is difficult to estimate the exact amount of crypto held by the people of Russia, but sources range from $22 billion to $220 billion regarding the amount of crypto held by Russian investors. The country is also responsible for almost 14% of the BTC hashing power needed to validate blocks on the network, it is the third largest bitcoin mining center in the world after the United States and Kazakhstan.
Russian crypto investors are shaking
According to a Reuters report, Swiss brokers have reportedly received numerous requests for liquidations of crypto positions as sanctions are imposed on Russian assets. Brokers refer to the fact that Russian clients are afraid of seeing their assets frozen and therefore seek safe countries to invest. But there is a hiccup for these wealthy clients. Switzerland said crypto assets were subject to the same sanctions and measures as other Western countries. In this context, the sanctioned persons could very probably see their digital assets frozen in Switzerland.
For their part, companies operating cryptocurrencies in the United Arab Emirates (UAE) are “flooded with liquidation requests for billions of dollars of virtual currency as Russians seek refuge for their fortunes”. The United Arab Emirates does not take sides between Westerners and Russia, which can be interpreted as a strong signal for Russian investors that this is a region of the globe where their funds would be placed safely.
The UAE has been placed on a ‘grey list’ for heightened surveillance by the Financial Crimes and Money Laundering (FATF) watchdog group as Westerners said they were skeptical of the United Arab Emirates’ crackdown on Russian wealth in the Gulf state, citing the country’s neutral stance in the conflict.
So even though the major platforms such as Coinbase or Binance take relatively strict measures to ensure that cryptos are not used as a means of evading sanctions and they say they collaborate with law enforcement, the Crypto money flows may well have already taken place. The United Arab Emirates, by being relatively flexible on the terms of regulations and authorities regarding crypto transfers, could well benefit from crypto coming from Russia. It should be noted that the most skilful Russian investors could potentially quickly send their funds to other platforms, decentralized or centralized, sometimes obscure, to escape Western sanctions applied to majors such as Coinbase and Binance.