crowdfunding

Thai SEC wants to lift restrictions on initial coin offerings

The latest proposal by the SEC of Thailand follows a series of regulatory changes targeting the digital asset market in the country.

Thailand’s Securities and Exchange Commission is preparing to soften retail investment restrictions related to initial coin offerings (ICO) to boost digital investments.

The Thai securities regulator is willing to lift the limit of 300,000 baht ($8,800) for asset-backed ICOs per person, planning to allow bigger investments in real estate and infrastructure-backed ICOs, the SEC officially announced on March 30.

The new measures aim to help Thailand boost local technological development due to growth in the capital market and the digital economy, the SEC said, adding:

“The revision of the regulation is aimed at enhancing effective monitoring of digital asset operations and reducing risks that might affect investors, digital asset operators and the market.”

The SEC opened a public hearing for the plan to remove the investment limit, noting that the new measures would increase investors’ risk exposure. The public consultation is scheduled to run until April 27.

Related: SEC’s Gensler seeks $2.4B in funding to chase down crypto ‘misconduct’

The regulator plans to require digital asset operators to apply for permission from the SEC to expand to other businesses. Digital asset operators may also incur additional costs for compliance with new ICO regulations, the SEC noted.

The latest proposal by the SEC of Thailand follows a number of other regulatory amendments targeting the digital asset market in the country.

In early March, the SEC launched another public consultation regarding its draft regulation that would ban crypto firms from offering staking and lending transactions. Previously, the regulator also introduced new crypto custody services, potentially requiring virtual asset service providers to establish a digital wallet management system to guarantee the safety of funds.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Russia-Ukraine war: How both sides of the conflict have used crypto to win

While tens of millions worth of crypto were donated to Ukraine in the last year, pro-Kremlin groups have also leveraged digital currencies to buy military supplies and spread propaganda.

In the Russia-Ukraine war, both sides of the conflict have been leveraging cryptocurrencies to achieve the upper hand. 

Pro-Ukraine causes have collected around $200 million from crypto donations, showing how borderless and uncensorable money could be useful in time of emergency. 

But the Russian side has taken advantage of crypto too: a total of about $5 million was raised by pro-Kremlin groups and propaganda outlets in the course of the invasion, as revealed by a recent Chainalysis report. These entities are small grassroots organizations that have used crypto to bypass Western financial sanctions. 

“We’re really looking at individual actors. So somebody who’s on the front, somebody who’s trying to help provide more military resources to the front […] things like bulletproof vests or drones,” explained Andrew Fierman, head of Sanctions Strategy at Chainalysis and one of the authors of the report.

But those numbers don’t take into account ransomware attacks: As shown in Chainalysis data, over $450 million were paid to these entities last year, the majority of which were believed to be based in Russia. Some of them, like the cybercriminal group Conti, have openly supported the Russian government in its war effort.

“When it comes to ransomware payments, a lot of the time bad actors have some sort of political agendas behind what they’re doing,” Fierman pointed out.

To find out more about the impact of crypto in the Ukrainian conflict and how Russia leveraged it to promote its cause, check out the full interview on our YouTube channel and don’t forget to subscribe!

The Web3 community responds to Turkish–Syrian earthquake tragedy

In the aftermath of a deadly 7.8-magnitude earthquake in southeastern Turkey, the Web3 community has come together to raise awareness and aid for victims of the disaster.

A massive earthquake hit southeastern Turkey along the border with Syria on Feb. 6, which has so far caused the death of more than 5,000 people. The quake had a magnitude of 7.8 on the Richter scale, which is internationally categorized as a “major” earthquake, and occurred along 100 kilometers (62 miles) of the fault line.

Infrastructure in the area suffered major damages, resulting in a deadly cross-border humanitarian disaster.

However, the world was quick to respond. Across the internet and various social media platforms, people have been gathering funds for local and international aid organizations to provide relief to those in the affected areas.

Two of the largest aid efforts in Turkey, AFAD Turkiye, the government agency for such disasters, and the NGO Ahbap, led by philanthropist Haluk Levent, have been at the head of organizing an influx of aid.

Levent announced that his organization has opened up crypto addresses in order to accept aid in various forms of digital currencies.

Refik Anadol, a Turkish artist and art director, also started a crowdfund via an Ether (ETH) address, in which he will transfer the collected funds to both AFAD and Ahbap. 

Within the Web3 space, various companies in the industry have stepped up to provide help, be it in the form of crypto or fiat donations or even physical aid.

Crypto derivatives trader Bitget announced that it would commit 1 million Turkish liras (~$53,000), while Bitfinex, Keet, Synonym and Tether pledged 5 million liras (~$265,500), and Gate.io pledged 1 million liras (~$53,000).

Local Turkish crypto exchange Bitci sent an aid truck to the earthquake zone while announcing that all commission income for the month of February will be donated to Ahbap on behalf of the Kahramanmaraş-centered earthquake. Icrypex announced coordination efforts with AFAD and Ahbap.

BtcTurk told Cointelegraph that, aside from donating 6 million liras ($318,000) to the Ahbap and Akut organizations, the Turkish crypto exchange sent 1.2 million liras ($62,000) worth of clothing aid to the zone in coordination with local governments.

The Turkish branch of ByBit and OKX have both committed to send $100,000 and 1 million liras (~$53,000) in aid, respectively.

Related: DeFi, DAOs and NFTs: Crypto is redefining how charities raise funds

Cointelegraph also spoke with Sebastien Borget, co-founder and chief operating officer of The Sandbox, about his efforts with The Sandbox Turkey to provide on-the-ground support for the local communities. 

“Our thoughts are with the Turkish people today. Together with The Sandbox creator community in Turkey, we are in touch with relevant non-governmental organizations to create a relief fund and support earthquake-affected areas.”

He said together with The Sandbox Turkey, they’ve helped fill a truck with urgent supplies for the victims and people affected and look for options for more long-term support.

Source: Sebastien Borget

Nonfungible tokens (NFTs) have also been mentioned as a possible way of fundraising for the disaster. 

Turkish NFT artist Pak tweeted about an ETH donation to Ahbap, along with plans for an NFT initiative for long-term support. Gate.io, in its proposal, also mentioned developing an NFT aid initiative for additional support in the near future.

This is a developing situation that Cointelegraph is monitoring. This article will be updated with any relevant information.

The history and evolution of the fintech industry

The fintech industry has evolved from early adopters using technology to automate financial services to a comprehensive revolution of the financial sector.

The financial technology (fintech) industry has its roots in the late 20th century, with the advent of electronic banking and online stock trading. Since then, fintech has expanded and changed over time as a result of technological and internet advances. As a result, new financial services and products have been created with the intention of enhancing accessibility, simplicity and effectiveness in the financial services industry.

The 2008 global financial crisis aided the growth of fintech by increasing customer demand for non-traditional banking and financial services. By enabling customers to access financial services from any location at any time, the rise of mobile devices and the widespread usage of smartphones have also fueled the growth of the fintech industry. Today, fintech continues to shape the financial industry and is driving innovation in areas such as payments, lending, investing and insurance.

The evolution of the fintech industry

The fintech industry as we know it today did not exist before the late 1990s and early 2000s. Nonetheless, fintech’s origins can be traced back to the advent of computer systems and the growth of electronic banking in the financial services industry in the 1970s and 1980s. These early innovations set the stage for fintech’s expansion and development in the latter half of the 20th century and beyond.

The evolution of the fintech industry has been rapid and dynamic, with significant changes taking place year after year.

Late 1990s and early 2000s

Early adopters of the fintech sector offered fundamental financial services such as online stock trading and electronic banking when the sector was still in its infancy. The following are some instances of fintech products and businesses that appeared in the late 1990s and early 2000s:

  • Online stock trading platforms: Customers were able to trade stocks online for the first time thanks to businesses like E-Trade and Charles Schwab, dramatically enhancing accessibility and convenience in the stock market.
  • Electronic banking: Wells Fargo and Citibank, among other financial institutions, provided online banking services that let clients monitor their accounts and conduct financial transactions.

Additionally, payment processors, such as PayPal, emerged as early players in the payments space, providing consumers with a convenient and secure way to send and receive money online.

2005–2010

New products and services were created in industries, including payments, loans and insurance as a result of the growth of new fintech businesses. The expansion of fintech was also fueled by the growing use of smartphones during this period. Two examples of fintech products or businesses that appeared between 2005 and 2010 are:

  • P2P lending platforms: Lending Club, one of the earliest peer-to-peer (P2P) lending platforms, was established in 2006 and connects investors and borrowers without the need for traditional institutions.
  • Mobile payments: In 2009, Square, a company specializing in payments on the go, created a system that enables small companies to accept credit cards via a mobile device. This was a significant advancement in the payments industry that aided in the development of mobile payments.

2010–2015

Following the financial crisis of 2008, the emergence of alternative finance gave fintech businesses new prospects in sectors such as crowdfunding and peer-to-peer lending. Blockchain technology’s emergence has also started to show promise as a potential disruptor in the financial services industry.

The fintech products or companies that emerged during 2010–2015 are:

  • Crowdfunding: Kickstarter, founded in 2009, became one of the first crowdfunding platforms, allowing entrepreneurs and creators to raise funds for their projects from a large number of supporters.
  • Digital currencies: Bitcoin (BTC), created in 2008, was the first decentralized digital currency and marked the beginning of the rise of cryptocurrencies. Bitcoin and other digital currencies provided a new way for consumers to store and transfer value, disrupting traditional finance.

2015–2020

Fintech products and services have been widely adopted, leading to further consolidation in the sector as it continues to develop and flourish. To introduce new financial services to the market, traditional financial institutions started to enter the market and collaborate with fintech firms. The emergence of digital assets like cryptocurrency gave the market a fresh perspective.

Two examples of fintech products or companies that emerged during 2015–2020 are:

  • Robo-advisers: Betterment and Wealthfront, founded in 2008 and 2011, respectively, became two of the leading robo-advisers, using algorithms and automation to provide personalized investment advice and manage portfolios for individual investors.
  • Digital banking: Challenger banks such as Monzo, N26 and Revolut, founded in 2015, 2015 and 2013, respectively, offered digital-only banking services, providing consumers with alternative banking options and a more modern and convenient banking experience.

2020–present

Due to the COVID-19 epidemic, many customers are now using digital financial services for the first time, which has accelerated the expansion of fintech. New technologies like artificial intelligence (AI) and machine learning are being used to enhance financial services as the sector continues to develop and innovate. The regulatory landscape is likewise evolving to reflect the development and maturity of the fintech sector.

Some examples of fintech products or companies that have emerged after 2020 include:

  • Digital insurance: Lemonade, founded in 2015, became one of the leading “insurtech” companies offering a digital platform for purchasing home and renters insurance.
  • Digital securities: Companies such as Coinbase, Bakkt and Paxos, founded in 2012, 2018 and 2012, respectively, have emerged as leaders in the digital securities space, providing platforms for buying, selling and holding digital assets, such as cryptocurrencies and security tokens.

Related: Binance vs. Coinbase: How do they compare?

  • Open banking: Companies like Plaid, founded in 2013, and Yapily, founded in 2016, have emerged as leaders in the open banking space, providing APIs and infrastructure for secure access to financial data and enabling innovation in the fintech industry.
  • Online lending: Affirm, founded in 2012, and Afterpay, founded in 2014, provide consumers with a range of credit options for online purchases.

The future of the fintech industry

The future of fintech is expected to continue its rapid growth as technology continues to shape and revolutionize the financial industry. Financial services will become more accessible, secure and innovative thanks to innovations like blockchain, AI and open banking.

In addition, there will be a trend toward digitization as more and more customers choose mobile and online banking options. It can be anticipated that traditional financial institutions and fintech firms will increasingly integrate, which will result in the development of new financial services and products.

Crowdfunding gets leg up from Lightning Addresses on Bitcoin

Lightning Addresses allow individuals to crowdfund on Bitcoin at the speed of the Lightning Network and without a node.

The Lightning Network strikes again. In a small yet significant development for Bitcoin (BTC), a new type of BTC address has been introduced: the “Lightning Address.” These unique identifiers are specifically designed for use on the Lightning Network, a layer-2 payment protocol that operates on top of the Bitcoin blockchain.

A user-friendly addition to ways in which Bitcoin users can send, receive and even raise money, Lightning addresses can be custodial, or users can connect to their own nodes. Crowdfunding is among the most popular real-world use for Lightning Addresses.

Cointelegraph spoke to MetaMick, the chief executive officer of Geyser Fund, and Stelios Rammos, CTO, to better understand how to use Lighting Addresses and why crowdfunding is a low-hanging fruit for this technology. Geyser Fund is a crowdfunding platform similar to GoFundme but using Bitcoin and Lightning.

Lightning Addresses are “Email-like identifiers that make it possible for users to send value to each other via lightning. They are easy to memorize and are reusable (unlike bolt11 lightning addresses),” explained MetaMick, the chief technology officer of Geyser Fund. Cointelegraph tried out the service and managed to raise money in no time:

First developed by Andre Neves and Fiatjaf (the developer behind Nostr), Lightning wallet addresses can be created on custodial solutions such as Wallet of Satoshi, CoinCorner or BitRefill, and quickly synced to Geyser Fund:

“You just link up your wallet to Geyser, and all donations go through directly in your wallet.”

Crowdfunding has long been an area of Bitcoin and cryptocurrency interest. Thanks to Bitcoin’s censorship-resistant and self-sovereign properties, it is one of the most efficient ways of sending money online.

There are over 20 plug and play Lightning Wallet address types available. Source: Geyser

The first widespread use case for using Bitcoin to raise money was the 2011 Wikileaks campaign, where Julian Assange raised thousands of Bitcoin when access to banking services was cut off.  More recently, the Canadian Trucker Protests used Bitcoin when the Canadian government shut down USD-based crowdfunding solutions; it was a similar story with protestors in Nigeria.

However, Lightning Addresses take funding a step forward in terms of both speed and see of use. Transactions on the Lightning Network can be completed almost instantly, compared to the 10-minute average for regular Bitcoin transactions. Lightning is ideal for small frequent payments, such as those made in brick-and-mortar stores, or for sending small donations to creators around the world.

And thanks to Lightning Addresses, Bitcoin users can now raise money even quicker and with a straightforward user experience. Plus, Geyser avoids acting as a custodian as all funds are forwarded directly to creators’ Lightning Addresses thanks to “hodl invoices.” The result is a trustless and non-custodial process, a key tenet of Bitcoin philosophy.

Related: Not medical advice: Bitcoiner implants Lightning chip to make BTC payments by hand

Ultimately, while there are still some hurdles to overcome with the Lightning Network, such as the need for more user-friendly wallets and better integration with existing payment systems, it is clear that the Lightning Network has the potential to revolutionize the way payments are made, and money is raised online.

As more users adopt the Lightning Network and take advantage of the benefits of these new addresses, it is possible that we will see a significant shift toward more efficient, cost-effective, and censorship-resistant payments online.

What the Russia-Ukraine conflict has revealed about crypto

Cryptocurrencies are being used to provide military and humanitarian aid in the Russia-Ukraine conflict.

The Russia-Ukraine conflict has tested the capabilities of crypto in a real-world conflict where sanctions and inventive blockchain crowdfunding models abound.

The war, which is drawing into its ninth month, has uncovered a raft of blockchain benefits, such as the capacity to support humanitarian endeavors. It has also revealed how much control national authorities can exert over crypto networks.

Vadym Synegin, co-founder at IT and crypto solutions provider Tecor, told Cointelegraph that cryptocurrencies have a unique advantage in situations where there is an increased risk of money transfer interruptions due to the centralization of conventional systems.

“With most markets controlled by centralized authority figures that can easily buckle under the political tensions, the crypto markets remain more or less decentralized, meaning that their operational efficiencies during periods of crisis are further enhanced,” he said.

So, what other aspects has the Russia-Ukraine conflict revealed about crypto?

Crypto donations for humanitarian aid

The Russia-Ukraine conflict has shown that cryptocurrencies can be used for fundraising in military conflicts. Notably, the Ukrainian government began accepting crypto donations at the beginning of the year in a bid to enhance donor inclusivity, and this led to the creation of the Crypto Fund of Ukraine.

The nation’s Ministry of Digital Transformation is currently in charge of the fund, which was set up in conjunction with Kuna, FTX and Everstake to buttress Ukraine’s humanitarian aid and military programs. The project has enabled the Ukrainian government to raise over $100 million in cryptocurrency donations so far.

That said, some pro-Ukraine crypto fundraising groups have turned to novel crypto instruments such as decentralized autonomous organizations (DAOs) to raise funds for the nation.

The UkraineDAO, which is among the most prominent of the lot, was created in February for the sole purpose of providing monetary support to Ukrainian soldiers. The project’s co-founders include Russian critic Nadya Tolokonnikova, who is also a founding member of the Pussy Riot feminist protest group. Other UkraineDAO founding members include PleasrDAO and Trippy Labs, a generative NFT studio. The project has raised over $8 million so far.

Among the most notable successes of the UkraineDAO was the recent sale of a nonfungible token (NFT) of the Ukrainian flag that fetched just over $6 million in Ether (ETH). It is currently ranked among the top 20 most expensive NFTs of all time.

Recent: Does the IMF have a vendetta against cryptocurrencies?

Cointelegraph had the chance to speak with Kayla Kroot, the co-founder of the Koii Network, regarding the current use of crypto in the Ukraine situation. Her company is involved in the development of novel blockchain models, including Web3.

According to the executive, cryptocurrencies have enabled citizens caught up in the war to maintain access to their money during these trying times:

“Cryptocurrency was developed to help global citizens maintain control of their money.” 

Kroot also noted the increased use of digital coins by humanitarian groups operating in the nation. “Organizations such as World Central Kitchen performed crowdfunding campaigns. In WCK’s case, this involved accepting donations in ETH. These funds were dispersed with fewer restrictions and oversight, allowing money to more easily get to the hands of those who needed it most,” she added.

Scammers take advantage of well-wishers

While crypto donations have been helpful in furthering the Ukrainian cause, some malicious entities have blighted noble efforts by well-wishers.

Some scammer syndicates have attempted to beguile donors by pretending to be representatives of authorized crypto exchanges involved in Ukraine fundraising efforts. Cybersecurity experts estimate that millions of deceptive emails employing the tactic have been sent out so far.

Some of the emails contain messages of distress from cybercriminals purporting to be Ukrainians in dire need of financial aid.

The influx of such messages subverts the cause of helping Ukrainians by making it harder for the real victims to get the help they need.

There have also been reports of scam messages being spread on social media platforms. At this juncture, it is important to note that well-wishers should only donate their crypto via official Ukrainian government channels in order to avoid possible scams.

Besides fraudulent posts appearing on social media, scam messages soliciting crypto are also popping up on the dark web.

The dark web is an overlay internet network made up of unindexed websites that are invisible to standard browsers and search engines and can only be accessed using special browsers.

The dark web is intentionally hidden from regular users for a good reason. It harbors all manner of illegal activity that includes black markets for illegal drugs and guns. Blackhats also use the dark web to sell stolen personal credentials.

As such, there is little surprise that scammers are spreading fake messages on the dark web to cheat Ukraine supporters out of funds. Many of the messages have been found to contain links to phishing sites that are designed to steal crypto.

According to a McAfee investigation into the schemes, some of the websites utilize fake chatboxes to simulate user activity, while others make use of mock-up donation verifiers to look more authentic.

Early on in the Russia-Ukraine war, a more sophisticated group of fraudsters attempted to carry out a scam fundraising effort using the Peaceful World (WORLD) token. This is after the Ukrainian government announced an airdrop and then subsequently canceled it.

The scammers launched the fake airdrop hours before the government scrapped the move in favor of NFTs. Industry experts and security analysts were quick to point out discrepancies in the fake giveaway, thereby forestalling the scheme.

Governments can limit crypto

Satoshi Nakamoto, the pseudonymous creator of Bitcoin (BTC), developed the first cryptocurrency in order to devolve the control of money away from governments and centralized financial institutions.

However, the Russia-Ukraine conflict has demonstrated that it’s possible for regional blocs and major jurisdictions to impose bans and exert control over cryptocurrencies.

In October, the European Commission announced sweeping sanctions targeting Russian crypto custodial wallets under the control of European enterprises and exchanges. EU blockchain companies were additionally prohibited from providing crypto custodial services to Russian entities.

The new laws were enacted in response to Russia’s invasion of Ukraine in order to prevent Russia from evading sanctions.

Previous restrictions placed a trade and deposit limit of up to 10,000 euros on Russian crypto wallets and accounts.

Recent EU crypto enactments have forced some major exchanges, such as Binance and Coinbase, which have operations in Europe, to restrict services to Russian individuals and companies to avoid a regulatory clash.

Other regulated crypto exchanges such as Kraken, Crypto.com and Blockchain.com have also ceased providing crypto services to Russian citizens as a result.

Meanwhile, Russian authorities seem unsure of how to handle the flurry of crypto wallet prohibitions and the occlusion of major Russian banks from the SWIFT money transfer system. The ban on these systems has effectively locked out the nation from major international financial markets.

In July, the Kremlin passed a law that banned the use of cryptocurrencies for making payments. However, the Russian government recently changed its tone. In September, the Russian central bank and the Ministry of Finance agreed to allow the use of cryptocurrencies for cross-border payments.

Recent: Bitcoin miners rethink business strategies to survive long-term

The move was designed to promote the use of local crypto exchanges amid rising geopolitical tensions that left many Russians with limited options.

The Russia–Ukraine conflict has showcased the use of crypto in community effort settings for the common good. While the Ukrainian government has raised millions of dollars from direct crypto donations, some digital currency fundraising efforts have been undermined by scammers out to make a profit from the war.

More crypto advantages and limitations are likely to crop up as use cases emerge in more diverse environments.

What the Russia-Ukraine war has revealed about crypto

Cryptocurrencies are being used to provide military and humanitarian aid in the Russia-Ukraine conflict.

The Russia-Ukraine conflict has tested the capabilities of crypto in a real-world conflict where sanctions and inventive blockchain crowdfunding models abound.

The war, which is drawing into its ninth month, has uncovered a raft of blockchain benefits, such as the capacity to support humanitarian endeavors. It has also revealed how much control national authorities can exert over crypto networks.

Vadym Synegin, co-founder at IT and crypto solutions provider Tecor, told Cointelegraph that cryptocurrencies have a unique advantage in situations where there is an increased risk of money transfer interruptions due to the centralization of conventional systems.

“With most markets controlled by centralized authority figures that can easily buckle under the political tensions, the crypto markets remain more or less decentralized, meaning that their operational efficiencies during periods of crisis are further enhanced,” he said.

So, what other aspects has the Russia-Ukraine conflict revealed about crypto?

Crypto donations for humanitarian aid

The Russia-Ukraine conflict has shown that cryptocurrencies can be used for fundraising in military conflicts. Notably, the Ukrainian government began accepting crypto donations at the beginning of the year in a bid to enhance donor inclusivity, and this led to the creation of the Crypto Fund of Ukraine.

The nation’s Ministry of Digital Transformation is currently in charge of the fund, which was set up in conjunction with Kuna, FTX and Everstake to buttress Ukraine’s humanitarian aid and military programs. The project has enabled the Ukrainian government to raise over $100 million in cryptocurrency donations so far.

That said, some pro-Ukraine crypto fundraising groups have turned to novel crypto instruments such as decentralized autonomous organizations (DAOs) to raise funds for the nation.

The UkraineDAO, which is among the most prominent of the lot, was created in February for the sole purpose of providing monetary support to Ukrainian soldiers. The project’s co-founders include Russian critic Nadya Tolokonnikova, who is also a founding member of the Pussy Riot feminist protest group. Other UkraineDAO founding members include PleasrDAO and Trippy Labs, a generative NFT studio. The project has raised over $8 million so far.

Among the most notable successes of the UkraineDAO was the recent sale of a nonfungible token (NFT) of the Ukrainian flag that fetched just over $6 million in Ether (ETH). It is currently ranked among the top 20 most expensive NFTs of all time.

Recent: Does the IMF have a vendetta against cryptocurrencies?

Cointelegraph had the chance to speak with Kayla Kroot, the co-founder of the Koii Network, regarding the current use of crypto in the Ukraine situation. Her company is involved in the development of novel blockchain models, including Web3.

According to the executive, cryptocurrencies have enabled citizens caught up in the war to maintain access to their money during these trying times:

“Cryptocurrency was developed to help global citizens maintain control of their money.” 

Kroot also noted the increased use of digital coins by humanitarian groups operating in the nation. “Organizations such as World Central Kitchen performed crowdfunding campaigns. In WCK’s case, this involved accepting donations in ETH. These funds were dispersed with fewer restrictions and oversight, allowing money to more easily get to the hands of those who needed it most,” she added.

Scammers take advantage of well-wishers

While crypto donations have been helpful in furthering the Ukrainian cause, some malicious entities have blighted noble efforts by well-wishers.

Some scammer syndicates have attempted to beguile donors by pretending to be representatives of authorized crypto exchanges involved in Ukraine fundraising efforts. Cybersecurity experts estimate that millions of deceptive emails employing the tactic have been sent out so far.

Some of the emails contain messages of distress from cybercriminals purporting to be Ukrainians in dire need of financial aid.

The influx of such messages subverts the cause of helping Ukrainians by making it harder for the real victims to get the help they need.

There have also been reports of scam messages being spread on social media platforms. At this juncture, it is important to note that well-wishers should only donate their crypto via official Ukrainian government channels in order to avoid possible scams.

Besides fraudulent posts appearing on social media, scam messages soliciting crypto are also popping up on the dark web.

The dark web is an overlay internet network made up of unindexed websites that are invisible to standard browsers and search engines and can only be accessed using special browsers.

The dark web is intentionally hidden from regular users for a good reason. It harbors all manner of illegal activity that includes black markets for illegal drugs and guns. Blackhats also use the dark web to sell stolen personal credentials.

As such, there is little surprise that scammers are spreading fake messages on the dark web to cheat Ukraine supporters out of funds. Many of the messages have been found to contain links to phishing sites that are designed to steal crypto.

According to a McAfee investigation into the schemes, some of the websites utilize fake chatboxes to simulate user activity, while others make use of mock-up donation verifiers to look more authentic.

Early on in the Russia-Ukraine war, a more sophisticated group of fraudsters attempted to carry out a scam fundraising effort using the Peaceful World (WORLD) token. This is after the Ukrainian government announced an airdrop and then subsequently canceled it.

The scammers launched the fake airdrop hours before the government scrapped the move in favor of NFTs. Industry experts and security analysts were quick to point out discrepancies in the fake giveaway, thereby forestalling the scheme.

Governments can limit crypto

Satoshi Nakamoto, the pseudonymous creator of Bitcoin (BTC), developed the first cryptocurrency in order to devolve the control of money away from governments and centralized financial institutions.

However, the Russia-Ukraine conflict has demonstrated that it’s possible for regional blocs and major jurisdictions to impose bans and exert control over cryptocurrencies.

In October, the European Commission announced sweeping sanctions targeting Russian crypto custodial wallets under the control of European enterprises and exchanges. EU blockchain companies were additionally prohibited from providing crypto custodial services to Russian entities.

The new laws were enacted in response to Russia’s invasion of Ukraine in order to prevent Russia from evading sanctions.

Previous restrictions placed a trade and deposit limit of up to 10,000 euros on Russian crypto wallets and accounts.

Recent EU crypto enactments have forced some major exchanges, such as Binance and Coinbase, which have operations in Europe, to restrict services to Russian individuals and companies to avoid a regulatory clash.

Other regulated crypto exchanges such as Kraken, Crypto.com and Blockchain.com have also ceased providing crypto services to Russian citizens as a result.

Meanwhile, Russian authorities seem unsure of how to handle the flurry of crypto wallet prohibitions and the occlusion of major Russian banks from the SWIFT money transfer system. The ban on these systems has effectively locked out the nation from major international financial markets.

In July, the Kremlin passed a law that banned the use of cryptocurrencies for making payments. However, the Russian government recently changed its tone. In September, the Russian central bank and the Ministry of Finance agreed to allow the use of cryptocurrencies for cross-border payments.

Recent: Bitcoin miners rethink business strategies to survive long-term

The move was designed to promote the use of local crypto exchanges amid rising geopolitical tensions that left many Russians with limited options.

The Russia–Ukraine conflict has showcased the use of crypto in community effort settings for the common good. While the Ukrainian government has raised millions of dollars from direct crypto donations, some digital currency fundraising efforts have been undermined by scammers out to make a profit from the war.

More crypto advantages and limitations are likely to crop up as use cases emerge in more diverse environments.