Ukraine’s ministry of digital transformation has utilized cryptocurrency and nonfungible tokens, even CryptoPunks, in an effort to fund its military and humanitarian aid.
Ukrainian officials have used funds from the crypto donation platform launched by the government to purchase supplies for the country’s military amid its ongoing war with Russia.
In a Friday tweet, Ukraine’s minister of digital transformation, Mykhailo Fedorov, announced that the country had purchased five all-terrain vehicles, which “will come in handy for a challenging environment” — possibly referring to conditions near the front lines with Russia or where roads have been damaged or destroyed. Funds for three of the ATVs originated from Aid for Ukraine, a platform the government launched in March that accepts crypto donations “to support people in their fight for freedom.”
Three ATVs for defenders are funded for crypto donations @_AidForUkraine, two more — supplied by the Minister of Defense @oleksiireznikov. These all-terrain vehicles will come in handy for a challenging environment. Better performance of the Army — our joint goal and big hope. pic.twitter.com/FxL1VyUNBd
At the time of publication, Aid for Ukraine has reportedly raised more than $60 million in Bitcoin (BTC), Ether (ETH), Tether (USDT), Polkadot’s DOT, Solana’s SOL and USD Coin (USDC). Fedorov reported on Wednesday that the government had already used some of the funds to supply 5,000 gas masks to state border guards and the army. Aid for Ukraine has also purchased more than 5,000 “optical and thermal imaging devices” for the nation’s military since the war began; tablets aimed at helping Ukrainians escaping the country find accommodations and aid; bulletproof vests; medical supplies; vehicles; and clothing
State Border Service @DPSU_ua recently received 31 thermal imagers from us. During 2 months of the war, @_AidForUkraine purchased 5,307 optical and thermal imaging devices for our military.
Since the beginning of the Russian military invasion in February, the Ukrainian government has turned to the crypto space many times as a solution for receiving funds from concerned parties. Fedorov announced in April that the government would accept contributions toward the war effort in the form of nonfungible tokens, or NFTs, which will in turn be sold to “contribute to the Ukrainian victory,” and it recently launched a charity NFT collection with pieces from Ukraine’s video game developers and digital artists.
We are coming into a great age of blockchain technology, but there are limits that need to be solved before decentralized archives enter the mainstream.
Decentralized blockchain technology has been around for a relatively short period of time, in the grand scheme of things, but its decentralized nature has the power to keep data and information out of the hands of censors looking to create a “safe” and “faultless” version of history.
Here we’ll look at some of the ways nonfungible tokens (NFT) and blockchain technology have been used for keeping archives, the potential downfalls of such technology, and what the future holds for blockchain-based storage systems.
NFTs and archives
While many current use cases surrounding NFTs deal with digital art, there is another side of nonfungible tokens that has only started to be explored.
Keeping an archive can be a costly and time-consuming endeavor, but NFTs can serve as a form of fundraising to support archival development.
For example, fashion designer Paco Rabanne is selling NFTs to fund his physical archive and support his brand name.
Furthermore, the technology itself can be used as means to store information.
Archangel, a test project of a “trusted archive of digital public records” at the Unversity of Surrey, has done just that. From 2017 to 2019, the university was able to create a test blockchain archive storage system that used distributed ledger technology (DLT) and NFTs and shifted “from an institutional underscoring of trust to a technological underscoring of trust.”
Cointelegraph reached out to Foteini Valeonti, a research fellow at University College London and founder of USEUM Collectibles — an organization advising museums, policymakers and cultural organizations on NFTs — to talk about the role of blockchain and NFTs in archives.
Valeonti said that blockchain technology can be a way for museums to “leverage their inherent capacity for provenance and metadata consolidation. So that, finally, each museum exhibit will only have one unique identifier across different institutions, projects and all kinds of different information systems.” It could be a way to track which museum owns what and who had it last.
Last year, the family of the Hobby Lobby empire was found to have hoarded 17,000 ancient Iraqi artifacts looted during the war. This breach of security of ancient artifacts shows that in times of war and instability, the right (or wrong) person can come and steal prized pieces of cultural identity.
The subsequent difficulties in repatriating the stolen artifacts highlight the problem of how cultural items are often poorly cataloged. Valeonti added:
“Keeping unique data for provenance’s sake could help resolve numerous information science challenges that the cultural heritage sector is currently facing.”
Preserving records of war
Digital media is vulnerable to propaganda that aims to shift blame and claim that certain events either happened or didn’t, while people fall into a rabbit hole of constant misinformation in the propogandists’ attempt to invalidate the experience of those living in war-torn regions.
In the case of the current conflict in Ukraine, there has been a huge shift in the way crypto and blockchain can be used to help preserve Ukrainian culture and record people’s experiences of the war.
The Meta History Museum is one decentralized project that is keeping real-time records of events from the ongoing war. First, they sell NFTs to raise money for war funds by showcasing Ukrainian artists around the world. Then, the money is used not only to fund data collecting but also to support Ukrainian forces. So far, the Meta History Museum has raised 270.37 Ether (ETH) or $611,953 at the time of writing.
The Meta History Museum collects tweeted events such as shellings or bombings from the war from Ukrainian state officials and international agencies such as the North Atlantic Treaty Organization or BBC News as a “place to keep the memory of war.” In support of the Meta History Museum’s efforts, Ukrainian Vice Prime Minister Mykhailo Fedorov tweeted, “While Russia uses tanks to destroy Ukraine, we rely on revolutionary blockchain tech.”
In wartime, it is essential to have systems in place to protect those in danger. One of these systems is the Hala Sentry system, designed to record immutable data on Ethereum of instances of airstrike alarms, bomb threats and events that could lead to the death of thousands and the destruction of entire cities.
It does this by providing “an interface to data from its sensors, human observers, and strategic partners, along with information from open media.” While this does have an aspect of using automated systems to record wartime history, this makes the data and airstrike records immutable. People can check and see what is happening at any given moment, even if news channels or people are blocking information about certain events.
The project has had a reasonable amount of success, too, as the Hala Sentry system stated that “according to a preliminary assessment, the system reduced the lethality of airstrikes by around 20–30 percent in areas under heavy bombardment in 2018.”
Is there a downside?
As a nascent technology, blockchain tech still suffers from some growing pains in terms of development (scalability is a major problem) as well as regulations surrounding the space.
As stated by Valeonti, “NFT technology is still in its infancy, especially when it comes to record-keeping.” She added that right now, most of the information that is available for data storage is kept partly in decentralized storages and partly in centralized servers. Archangel noted, “A centralized authority model simply doubles down on an institutional basis for trust.”
The adaptation of technology and Web3 must expand onward to ensure that it can handle the sheer amount of data and information that is necessary for decentralized archives to thrive. Blockchain is simply not there yet, according to Valeonti, and developing the tech needs to happen first before trusting barely used technology with priceless information.
In addition to trust, another aspect that puts blockchain technology at a disadvantage is more anthropologically driven mainly because copyright claims on artifacts hold a strong cultural presence over a museum’s use of an artifact.
According to a publication by the World Intellectual Property Organization, “Cultural institutions, including museums, libraries and archives, play an invaluable role in the preservation, safeguarding and promotion of collections of indigenous and traditional cultures, such as artifacts, photographs, sound recordings, films and manuscripts, among others, which document communities’ lives, cultural practices and knowledge systems.”
It is the job of these institutions, first, to protect the artifacts because it does not belong to them, and second, “for the collecting institution, membership records, Internet tracking data and other activities that gather personal information about patrons have to be managed in keeping with privacy legislative requirements,” as well as uphold a private agreement with the parties involved in any sense.
For example, the National Museum of the American Indian in Sutherland, Maryland offers private tours of its artifact collections but only showcases artifacts approved by the Native American tribes that allow the museum to store their people’s history.
Valeonti stated that “a decentralized storage solution that would automatically make all images and assets openly accessible to all would not be an option for the vast majority of museums, which have restrictive copyright policies either because there are other entities — e.g., artist estates — holding copyright onto their artifacts or because they are unable to make their artifacts available in open access — e.g., cannot afford to lose image licensing revenue.”
Another issue with using a blockchain-based decentralized storage system is one that many crypto hodlers can relate to: protecting private keys. Valeonti explained that a “critical barrier, in my view, is the inherent inflexibility of blockchain technology.”
“Unless one uses a centralized, custodial platform, if someone loses their passphrase, then all their assets are lost forever.”
As such, who gets to control the seed phrase? Who will be responsible for making sure the seed phrase is in the right hands? Valeonti further mentioned that “there has been research proposing potential solutions, but it may be a while before we see such inventions deployed live on leading blockchains.”
How to fix this for the better
However difficult the application could be, there are concrete ways to use blockchain, DLT and NFTs to protect data and archives.
Valeonti suggested, “What museums can do is to take a part in these discussions and help shape the future of Web3.” She also said that cultural organizations should be at the forefront of the future — as technology changes, the world of archive storage and museum records must change with it.
Valeoti and her colleagues at UCL are exploring these challenges of “robustness of decentralized storage, metadata consolidation and off-chain metadata permanence” with a national museum in the United Kingdom. It is a great example of blockchain and museums coming together to change how they use and employ archives.
Russian independent media Meduza has managed to raise $250,000 in funding in order to continue providing unbiased news on the war in Ukraine.
A Russian independent news company has raised more than $250,000 in cryptocurrency donations from supporters in order to continue reporting independent news under a barrage of Russian government propaganda and censorship.
Meduza, a Latvian-based Russian-language news site that claims to report on “the real Russia, today,” has been asking for donations since April 2021 in the form of United States dollar, euro and cryptocurrencies including Bitcoin (BTC), Ether (ETH), BNB, Tether (USDT), Monero (XMR) and Zcash (ZEC).
Since publishing their donations plea, the news company has received around $250,000 in crypto donations through 146,000 individual transactions. Around 93% of the total donation amount came in the form of 3.75 BTC with $116,954 and 49.9 ETH with $117,767.
Folks, Meduza has redesigned its crowdfunding after being disconnected from our supporters in Russia. We now turn to you—our global audience—to replace those 30k donators. Help us keep Russians & the world informed about the monstrous war against Ukraine. https://t.co/y83ieV9LuT
Meduza’s money troubles actually began in April 2021, after it and several other independent media outlets got labeled by Russia’s Justice Ministry as “foreign agents,” requiring the company to place a large font warning in each of its Russian-language articles informing readers of its “foreign agent” status. The same warning also has to appear in all advertisements, leading to a loss of nearly all its advertisers. It wrote on its donations FAQ:
“As you can imagine, few companies will pay to promote their products below a warning that the content was “created by foreign agents.”
Being labeled as a foreign agent did not prevent readers in Russia from donating to the organization, however, as the company promptly set up an avenue for contributors to provide regulator donations through their banks using payment processor Stripe and through crypto.
But, in March, Meduza found itself pincered by both Russian government censorship and the impact of Western sanctions. Russian authorities blocked its website for “disseminating information in violation of the law.” Also, a major avenue for receiving donations from Russian supporters was blocked by a ban on the SWIFT network for Russian banks on February 26.
SWIFT is a global financial messaging network used by financial institutions to execute international money transfers.
Meduza wrote on its donation website that the financial restrictions had made it impossible for them to field donations from their supporters in Russia.
Since February 25, the news organization and its journalists have been publishing daily updates on Russia’s war against Ukraine, sharing images and stories about Ukrainian civilians impacted by the war and other major events not reported by local Russian media.
“Millions of people in Russia now rely on our reporting,” wrote Meduza, noting its journalists were forced to leave the country:
“Since the outbreak of this war, transferring money from Russia to Europe has been impossible. We lost 30,000 donators. At the moment, we get no money from Russia at all.”
Ivan Kolpakov, editor-in-chief of Meduza, told Bloomberg that the donations will help their 25 journalists who have since fled the country to resettle in Riga, Latvia, where the company’s headquarters is located.
Meduza and its journalists are not the only unintentional victims of the Russian sanctions. Media reports over the months have pointed to everyday Russians, students studying abroad, international students in Russia and even entire nations’ civilian populations as having been severely impacted by Russian-facing sanctions.
According to the report, the affected persons included Elizaveta Peskova, the daughter of Russian President Vladimir Putin’s spokesman, Dmitry Peskov, and Polina Kovaleva, the stepdaughter of foreign minister Sergei Lavrov. Binance said it had also blocked Kirill Malofeyev, the son of Konstantin Malofeyev, a Russian oligarch who was previously charged with violating sanctions from the United States.
“Proud to be a part of this team that makes a real difference,” Binance’s newly appointed global head of sanctions, Chagri Poyraz, wrote on his LinkedIn page on Binance’s latest measures.
Poyraz said that Binance blocked Peskova on March 3, when she tried to use the exchange through a third-party brokerage. She was then sanctioned by the United States Treasury Department on March 11 as part of sanctions against “Kremlin elites, leaders, oligarchs and family for enabling Putin’s war against Ukraine.”
Peskova subsequently expressed outrage about the Western sanctions, stating that such actions were “totally unfair and unfounded.” “I was really surprised because it’s weird introducing sanctions on someone who is 24 years old and has nothing to do with the situation,” she said. Peskova’s last Instagram post from March 12 reads one word: “Peace.”
According to Poyraz, Binance continues to monitor its platform for more people associated with sanctioned individuals who may be using its services.
“What’s different is that our compliance screen operations are ‘proactive,’ aiming to detect and deter financial crime risk before any regulatory or legal action towards these individuals or entities,” he said.
On April 21, Binance adopted a set of restrictions for Russian nationals or residents of Russia, limiting trading on accounts holding more than 10,000 euros, or $10,800. Binance CEO Changpeng Zhao previously said that Binance will comply with sanctions but will not “unilaterally freeze millions of innocent users’ accounts” due to Western sanctions against Russia.
Apart from reinforcing Binance’s eagerness to comply with sanctions, the latest report also suggests that family members of major Russian officials are very much tied to cryptocurrencies like Bitcoin (BTC). This comes despite the Bank of Russia’s hostility to Bitcoin and unwillingness to welcome crypto investment in the country.
Ukraine continues to use crypto and NFTs to fund the two-month long ongoing Russia-Ukraine war.
Mykhailo Fedorov, Vice Prime Minister of Ukraine and Minister of Digital Transformation of Ukraine, tweeted that the Ukrainian government will accept war effort contributions in the form of nonfungible token (NFT) donations and purchases. Via the official “Aid for Ukraine” crypto fund, individuals can donate cryptocurrency, fiat and now NFTs. So far the initiative has raised over $60 million, according to the website.
All funds go toward supplying Ukrainians with weapons, medical gear, medical kits and other expenses outlined on the Aid for Ukraine website. Total expenses amounted to $45,103,538 by April 14. The Aid for Ukraine platform is powered by crypto exchanges FTX and Kuna, and staking provider Everstake.
The Ministry of Digital Transformation of Ukraine is the beneficiary organization of several NFT projects including Russia For Sale, which sells Russian lands in the form of NFTs, and Holy Water, which supports local Ukrainian NFT artists, among others. Those who buy an NFT from one of the organizations will contribute directly to Ministry’s crypto wallet.
At the time of publication, the NFTs donated by “UkrainianCryptoFund” and available to bid on in OpenSea come from collections such as CryptoPunks, mfers, MoonCats, TIMEPieces by Time Magazine, CREYZIES and Chubbiverse Frens. All of these collections only accept Ether (ETH) for payment.
Fedorov first signaled in a tweet on March 3 that the government would soon be using NFTs to help pay for its military. Since then, the Ministry of Digital Transformation of Ukraine has also launched a virtual NFT gallery to keep alive the memory of the war.
Ukrainians are now allowed to buy Bitcoin only with foreign currency with a monthly cap of $3,300.
The National Bank of Ukraine (NBU) continues taking measures to prevent capital outflows amid martial law by enforcing major restrictions on cryptocurrency purchases.
The Ukrainian central bank officially announced Thursday a set of restrictions on cross-border operations, prohibiting individuals from buying cryptocurrencies like Bitcoin (BTC) with the national fiat currency, the hryvnia (UAH).
Ukrainians are now allowed to buy Bitcoin and other cryptocurrencies only with foreign currency, with total monthly purchases limited to 100,000 UAH ($3,300). The relevant limit also applies to international peer-to-peer transactions.
According to the announcement, the NBU has deemed crypto purchases as “quasi cash transactions” alongside operations like electronic wallet deposits, foreign exchange transactions and travel payments. By adopting restrictions on such transactions, the central bank aims to prevent the “unproductive outflow of capital” from the country amid martial law.
“The relevant changes will help improve the foreign exchange market, which is a necessary prerequisite for easing restrictions in the future, as well as reducing pressure on Ukraine’s international reserves,” the NBU wrote.
The central bank admitted that the need for international transactions has massively increased amid martial law, with millions of citizens being forced to leave Ukraine. However, the NBU cannot afford “unproductive capital outflows,” which include investing in cryptocurrencies, the announcement notes, adding:
“Quasi cash transactions […] are mainly carried out to circumvent the current restrictions of the National Bank, in particular for investing abroad, which is prohibited under martial law. Therefore, the relevant transactions should be interpreted as leading to unproductive capital outflows.”
According to the NBU, the Ukrainian government adopted the relevant changes as part of the NBU board resolution on Wednesday, which was then entered into force.
Some Ukrainian banks have adopted such restrictions already, according to several sources. PrivatBank, the largest commercial bank in Ukraine, reportedly prohibited its customers from purchasing BTC with UAH in mid-March.
The restrictions apparently raised eyebrows as the Ukrainian government has been actively working to legalize cryptocurrencies amid martial law. In March, Ukrainian president Volodymyr Zelenskyy signed a law to establish a legal framework for the country to operate a regulated crypto market.
The first tweet ever sent on Twitter was turned into an NFT and sold by founder Jack Dorsey for $2.9 million but is pulling about one percent of that in a current auction.
The nonfungible token (NFT) of the first-ever tweet made on Twitter by founder Jack Dorsey is currently struggling to attract a bid even 1% of its sale price last year.
The iconic genesis tweet was sold for 1,630 Ether (ETH), valued at $2.9 million about a year ago on March 22, 2021. The highest current bid for this attempt to auction it is 10.3 ETH, worth about $31,739 at the time of writing, on NFT marketplace OpenSea.
The nonfungible token of the first-ever tweet made on Twitter by founder Jack Dorsey is currently struggling to attract a bid even 1% of its auction price last year.
Its owner, Bridge Oracle founder Sina Estavi, hoped the tweet would generate at least $50 million dollars, half of which he said he would donate to charity after closing the auction in an April 7 tweet.
Estavi appears to have grossly overestimated the amount of money the tweet would sell for. When he initially listed the item on OpenSea, the highest bid was valued at about $277. Currently, the average bid is about $8,731.
Low interest in this piece of social media history may be a symptom of a general decline in frothiness across the crypto industry. Although NFT trading volumes have been rising over the past month, they are still far from all-time highs. Volumes on Bitcoin (BTC), ETH and decentralized exchanges (DEXs) have also been dropping off.
Using NFT art to support Ukrainian refugees
Four Ukrainian artists living in Sydney are using the popularity of digital art in NFT form to generate funds to aid over five million refugees from the embattled nation.
The OpenYourHeart campaign hopes to collect at least $5 million from the sale of four limited-edition NFTs and from ETH donations to Habitat for Humanity, a house-building charitable organization. The art will be sold at a May 5 auction.
One of the artists in the quartet, Olena Vigovska, feels that this auction gives her a way to help her friends and family in her home country.
“My friends and relatives are still back in Ukraine and any opportunity to help them is precious.”
Among the four works of art will be three paintings and one photograph that heavily incorporate the colors blue and yellow, like the Ukrainian national flag. The auction will take place online, and the gallery is based in Australia.
First WNBA team to issue NFTs
The New York Liberty WNBA team will kick off its 26th season for the league with an NFT drop to commemorate its home opener against the Connecticut Sun on May 7.
The collection of 400 NFTs will be minted before game time and sold on Polygon for $50 each. Buying a ticket to the game and whitelisting your wallet address by May 1 will see you awarded the NFT for free. Ticket prices start at $55.
Each NFT depicts a spinning numbered nail polish bottle that says it is from the home opener for the team.
OKcoin to launch an NFT marketplace
Crypto exchange OKcoin is set to launch its own NFT marketplace, which it says will have zero fees and no limit on the royalties creators can earn on secondary purchases.
OKcoin CEO Hong Fan announced the marketplace on Tuesday and said the exchange would drop an exclusive NFT collection which members of the waitlist will get their first crack at.
By lifting the cap on creator royalties, Fong said that the marketplace will further “empower creators with NFTs in the same way that blockchain technology empowers financial freedom with cryptocurrency.”
Snoop to grow greener pastures
Crypto investor and marijuana connoisseur Snoop Dogg is combining two of his passions by partnering with the MOBLAND metaverse platform to cultivate weed farms.
MOBLAND plans on releasing a limited collection of digital weed farm NFTs along with content from NFT artist Champ Medici. The weed farms will introduce the concept of grow-to-earn to the platform as well, which offers special utility and benefits to owners of digital land.
Other Nifty News
American crypto exchange Coinbase has launched the beta version of its long-awaited NFT marketplace. The limited functionality will currently allow early testers to buy and sell NFTs and create online profiles.
Crypto exchange Kucoin’s venture capital division has committed $100 million to help artists and creators scale up their business operations to larger audiences. The funds will be tied in with the exchange’s own NFT marketplace, putting it in competition with OKcoin and Coinbase’s own similar marketplaces.
Executives at nonfungible token service provider Finch are planning to open an office in Miami, while many employees of blockchain firm NEAR have gathered in Lisbon.
Many Ukraine-based businesses have had to shutter or suspend operations following the outbreak of the conflict with Russia on Feb. 24, but some in the cryptocurrency space have been able to keep running, albeit with many staff in bomb shelters, scattered across the world and facing an uncertain future.
Speaking to Cointelegraph, Arsenii Hurtavtsov, a Ukrainian national and CEO of nonfungible token service provider Finch, said he managed to get on one of the last flights from Kyiv to Azerbaijan on Feb. 23 before the country began blocking many men from leaving, likely in anticipation of needing individuals for the country’s military. He joined his business partner, chief operating officer Alina Varakuta, in Dubai shortly after his escape.
Both heard from friends and family abroad and were concerned about their own safety, but also considered how they might continue running Finch and getting money to employees in need.
“We were shocked because we couldn’t continue to work because our guys were in bomb shelters — it’s crazy,” said Varakuta.
“After the war started, I contacted all our clients and said that we had to suspend our work for one week at least,” said Hurtavtsov. “Fortunately, all of them understood the situation and they agreed. After that, we tried to contact all of our employees. We said that we would give them as much time as they needed and that we would not fire anyone, because we understood that maybe for two weeks or many months, they will not be able to work at all but they still would need to buy food and other things.”
The Finch CEO said that all 50 of his employees managed to find places to stay and were safe as of the end of March, having received their full salaries. Some who were eligible to leave Ukraine — mostly women — relocated to Hungary, Moldova and other European countries, leaving 35 behind. Hurtavtsov and Varakuta said they were able to shoulder much of the burden from Dubai as well as expand the team with additional specialists in Ukraine:
“Despite the fact that there is the war in Ukraine, we’re still growing month over month and, at the moment, we also attracted our first round of investment.”
From an employee perspective
Maria Yarotska, an employee of blockchain company NEAR, told Cointelegraph she wasn’t able to leave Ukraine until March 2, a full week after the invasion, when Russian military forces were advancing on Kyiv and many other cities. As of the end of March, she was staying in temporary accommodations in Lisbon as some of her colleagues gathered, considering opening a branch office in the Portuguese capital city.
Like employees at Finch, many men working with NEAR were forced to stay in Ukraine due to a decree issued by President Volodymyr Zelenskyy preventing men aged 18–60 from leaving. Yarotska, previously based in the port city of Odesa and having worked for NEAR since November 2021, assessed the situation for a few days before driving with her child and dog across Europe to Portugal.
“I explicitly told my team that I will be six days on the road, and I would need someone to take care of my projects,” said Yarotska. “They agreed because the company is founded by a Ukrainian, but I work in a developer relations department and I’m the only Ukrainian in the department and, for that matter, the only woman. All of them just supported me, waited for me and made it happen.”
“When the world is falling apart, it’s good to rely on your company, at least.”
Looking to the future
While Varakuta said Finch planned to open an office in Miami, the company would continue to build its “main team” in Ukraine despite the uncertain situation with Russia.
“Ukrainian designers and Ukrainian developers are incredibly valuable in the world with their actually reasonable price,” said Hurtavtsov. “At the moment, we’re considering relocating some people from our team from Ukraine to the United States.”
The Finch CEO added that Ukraine-based companies dealing with crypto and blockchain as well as others still needed outside support to stay in business:
“A lot of companies and a lot of investment funds are worried and scared working with Ukrainians because of this situation and because they don’t want to pay a project to be interrupted by some unpredictable occasion. I would say that a lot of Ukrainians still need to work, as they need to help their families.”
While some of Russia’s military operations seemed to have been briefly scaled back, news outlets are reporting that the bombing of cities and outlying areas continues. Many in Ukraine are still facing a lack of infrastructure necessary to run a company, including stable internet connectivity, food and water supply, electricity and medical care.
Despite the active conflict, the Ukrainian government has moved forward with legislation aimed at establishing a regulated crypto market, with Zelenskyy signing a law into effect on March 16. According to Aid for Ukraine, a crypto donation platform set up by the country’s Ministry of Digital Transformation “to support people in their fight for freedom,” users have sent more than $60 million to government wallet addresses as of the time of publication in Bitcoin (BTC), Ether (ETH), Tether (USDT), Polkadot (DOT), Solana (SOL), Dogecoin (DOGE), Monero (XMR), Icon (ICX) and Neo (NEO).
We’re excited to reveal more information on bought stuff for the Ukrainian defenders with help of crypto fund @_AidForUkraine. It wouldn’t have been possible without your support! We are grateful to everyone who contributes to our victory ✊ pic.twitter.com/mBiac1j77I
— Міністерство цифрової трансформації України (@mintsyfra) April 18, 2022
“In these circumstances we can no longer continue to serve our clients from Russia,” said Vitalii Kedyk, CEO of Currency.com’s Ukraine arm.
Crypto trading company Currency.com has announced it halted operations for clients based in Russia following the country’s “violence and disorder” imposed on the people of Ukraine.
In a Tuesday announcement, Currency.com said that Russian residents would no longer be able to access its services following the platform’s decision to stop Russia-based clients from opening new accounts. According to Currency.com’s website, the Gibraltar-based crypto trading platform has offices in Kyiv, London and Vilnius but was previously licensed and headquartered in Belarus.
“We condemn the Russian aggression in the strongest possible terms,” said Vitalii Kedyk, head of strategy for the platform’s London operations and CEO of Currency.com’s Ukraine arm. “In these circumstances we can no longer continue to serve our clients from Russia.”
https://t.co/utaDc9wnIa halts operations for residents of the Russian Federation (Russia). Clients from other countries and regions will not be impacted by this decision.
A Currency.com spokesperson told Cointelegraph that the platform “can’t speak on behalf of those companies that continue to provide services in Russia,” but had no plans to resume operations. According to the spokesperson, business from Russia didn’t amount to more than 15% of the platform’s bottom line, and the company will expand in the U.K. and U.S. markets in 2022.
Major crypto exchanges have responded to calls on social media to either freeze Russian digital assets or otherwise restrict access for residents amid the country’s military invading Ukraine. A Binance spokesperson told Cointelegraph in February that the exchange would not “unilaterally freeze millions of innocent users’ accounts,” while Kraken CEO Jesse Powell hinted that the only way it would cut off Russian users’ access to crypto would be in response to sanctions.
For many Ukrainians and Russians, digital assets have become the means to support themselves and their loved ones during the crisis.
The ongoing conflict in Ukraine has become a stress test for crypto in many tangible ways. Digital assets have emerged as an effective means of directly supporting humanitarian efforts, and the crypto industry, despite enormous pressure, has largely proved itself a mature community — one ready to comply with international policies without compromising the core principles of decentralization.
But there is another vital role that crypto has filled during these tragic events: It is becoming more and more familiar to those who have found themselves cut off from the payment systems that had once seemed unfailing.
Traditional financial infrastructures don’t usually work well during military confrontations and humanitarian crises. From hyperinflation and cash shortages to the destruction of ATMs, crises can disrupt the banking system’s ability to function and threaten the money supply for millions of regular individuals.
Cointelegraph spoke with some of the people who experienced these disruptions firsthand during the first days and weeks of the war. Some of them didn’t know much about crypto and had to learn fast, while others were lucky to have had some experience with digital assets that they could fall back on.
Some of these people are from Ukraine and have directly experienced the struggles of war, while others are from Russia and had to leave the country as their ordinary lives collapsed overnight. Their stories reveal that when the world comes crashing down, it is ordinary people for whom crypto provides the last line of support, not the corrupt elites.
“Crypto was originally created so that no single government or individual could control it”
Viktoria Fox is a Ukrainian-American entrepreneur who is the founder and CEO of Polaris Capital, a cryptocurrency mining company. Her parents moved from Ukraine to the United States during the tumult of the post-Soviet Union 1990s. When the war broke out on Feb. 24, her U.S. family started receiving uneasy phone calls from their relatives in Ukraine. As Russian troops advanced into the country, the National Bank of Ukraine immediately stopped the circulation of all securities and limited cash withdrawals, creating a nationwide frenzy.
Although the central bank claimed that banking and financial systems remained “resilient” following the Russian invasion, Fox’s relatives told a different story from the ground:
“What I’ve been told is that banks are closed and all ATM machines have no more cash. After two weeks of war, my relatives, like most families, were completely out of cash.”
Since then, Fox has been sending them Bitcoin (BTC), which started to function as a cash substitute for vendors and fellow citizens — a means to pay for almost anything from food to taxis. Viktoria’s uncle used Bitcoin to compensate a driver who traveled six hours to get him from Kharkiv to the Western part of the country.
In Fox’s experience, most Ukrainians prefer to transact via established global exchanges such as Coinbase and Binance, though some rely on Ukrainian exchanges as well.
“I think it’s important to remember that crypto, particularly Bitcoin, was originally created so that no single government or individual could control it,” Fox noted. “While it would be tempting to punish the ‘bad’ Russians and reward innocent Ukrainian civilians, it defeats the whole purpose of a decentralized currency or asset.” She doesn’t believe that tightening government control over crypto would help ordinary people during this or any future war.
“For me, as an anarchist, it was a matter of ideological choice, not of comfort”
Until several weeks ago, “Andrey” lived in the Russian city of Saint Petersburg, where he was born. Andrey is a front-end developer and has some professional experience with blockchain platforms. “I probably couldn’t write a smart contract, but I sure know how to use crypto in daily financial operations,” he said. “I have experience withdrawing USDT here and there, and I never did it through bank cards. For me, as an anarchist, it was a matter of ideological choice, not of comfort.”
As Andrey headed for Berlin on the fourth day of the war, the entirety of his belongings consisted of a laptop, a pair of t-shirts and a hardware wallet holding some hard-earned stablecoins:
“I had to use them to buy plane tickets to travel inside Europe. The last thing I managed to do with my Visa card was to rent a flat on Airbnb for two weeks. I was lucky enough to have a bunch of friends in Europe, and now they help me to pay with cards when necessary. I just send them the coins.”
In the long run, Andrey admitted that he still needs fiat to buy groceries and other necessities. He has yet to learn the peer-to-peer withdrawal tools available in Europe. Still, he regards the decision to get a hardware wallet for crypto as one of the smartest moves in his life. “It’s not like I was preparing for something like this, but, you know, when living under authoritarianism, you’d better be independent of the local banks.”
Andrey admitted that withdrawing crypto in a new jurisdiction could pose a major problem as well. He said:
“Despite my overall knowledge of the industry, right now I’m in a difficult position. In Germany, very stringent requirements are applied to cash withdrawals, and I’m still researching the ways to do it.”
It is not only about personal needs. Andrey is a Russian citizen whose father was born and raised in the south of Ukraine. He doesn’t have a legal way to donate money to support the relief effort for Ukrainian civilians — such an act could be considered a criminal offense or even high treason by the government. Andrey noted:
“Like many others in Russia, I have friends in Ukraine. Some of them are in Kyiv now, sleeping in bomb shelters under artillery fire. My problems are nothing compared to theirs. To help them, I had to find someone on the ground who would agree to exchange my USDT for hryvnias [Ukraine’s currency]. After I made sure my friends’ banking cards worked, I used this opportunity. The sum wasn’t huge, but I hope it was at least some help.”
“We could not receive international transfers to Ukrainian accounts”
Anna Shakola, a native of Kyiv, began to work as an NFT project manager at Cointelegraph in November 2021, several months before the war broke out. She had not used crypto as a payment method until the crisis began: “Honestly, I had never paid by crypto, except for transacting in NFTs. I used these assets only as an investment tool.”
Shakola had to learn fast, as during the first three weeks of the war, the fiat financial system was partially frozen: “We could not receive international transfers to Ukrainian accounts and had some problems with domestic fiat transfers as well.” After becoming accustomed to performing everyday transactions using digital currencies, she learned about Unchain, a charitable project founded by Ukrainian blockchain activists.
Unchain began to channel donations to Ukrainian civilians on Feb. 27, after a network of local crypto-fiat exchanges supported the initiative. The next step was to issue virtual debit gift cards known as “Help Cards” in cooperation with Kyiv-based Unex Bank and Weld Money. The cards are designed to help families — mothers and children — who might not have the time to learn to use crypto in the middle of a war. Unchain accepts donations in crypto and converts them to hryvnias on the receiver’s end. It plans to finance up to 10,000 Help Cards.
The war has undoubtedly shattered the global economic order, and it has also become a profound stress test for the crypto industry. Despite suspicions that digital assets could undermine the international sanctions regime, they have emerged freshly branded as a resilient, flexible payments system with the potential to help millions of people on their hardest day.
It’s no accident that the Ukrainian government has championed measures that would develop its digital economy after the war. On March 16, Ukrainian President Volodymyr Zelenskyy signed a law to build a legal framework for the country to establish a regulated crypto market. Given the need to rebuild the country once the hostilities are over, the nation’s hard-earned experience with crypto will likely be instrumental in developing a thriving digital economy.