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Crypto Donations To Ukraine Top $52 Million As Funds Pour In From Bitcoin, Ether, PolkaDot And NFTs

Published 4 months ago
By Forbes

TOPLINE

The Ukraine government and organizations supporting its fight against a Russia invasion have amassed more than $52 million in cryptocurrency donations—and already deployed at least $14 million—amid an influx of support as the country starts accepting a wider array of tokens and digital assets, including proceeds from the sale of one of the most expensive non-fungible tokens in history.

KEY FACTS

Wallet addresses linked to the Ukrainian government and nongovernmental organizations supporting its military have received nearly 60,000 donations since Russian President Vladimir Putin ordered an invasion of Ukraine early Thursday, including an all-time high of more than 10,000 on Wednesday morning, according to blockchain analytics firm Merkle Science.

The donations include $6.5 million in proceeds from a Ukrainian flag NFT auctioned off Wednesday by the Ethereum-based group Ukraine DAO—marking the tenth most expensive NFT ever sold, according to Tom Robinson, chief scientist at blockchain analytics company Elliptic.

As of 12 p.m., wallet addresses directly linked to the Ukrainian government have received about $34 million in bitcoin, ether, tron and polkadot, including $5.8 million from Polkadot founder Gavin Wood and a highly sought-after CryptoPunk NFT worth over $200,000, Elliptic notes; the government also started accepting dogecoin Wednesday morning.

On Twitter Wednesday morning, Ukraine’s Kuna Exchange founder Michael Chobanian, whose firm has been helping the country manage the cryptocurrency received, noted about $14 million worth of the donations had already been used, with a majority of spending happening exclusively in cryptocurrency transactions.

In an interview with CoinDesk on Tuesday, Chobanian said funds have gone to Ukraine’s military and special forces to help purchase equipment, food and gas, but he stopped short of providing additional specifics “due to a level of secrecy involved.”

He also said ether and bitcoin—which have represented about 69% of donations, per Merkle Science—were his “preferred” method for spending, given their ease of convertibility. 

KEY BACKGROUND

Ukrainian officials took to Twitter on Saturday to ask for cryptocurrency donations to help in the fight against the Russian military after a number of nongovernmental organizations and volunteer groups successfully raised more than $5 million within days. Coming a week after the Ukrainian parliament passed a bill to legalize cryptocurrencies, the donations to Ukraine “add to a trend of nation-states turning to crypto assets as a means of raising funds,” Elliptic noted in a report this month. “Iran is using bitcoin mining as a way to monetize its energy reserves, while North Korea is believed to be stealing cryptocurrency to support its missile development program.”

WHAT WE DON’T KNOW

Though Ukraine’s government has made use of a large portion of proceeds, it’s still unclear whether it has yet sold any of the NFTs it’s received. The CryptoPunk donated Tuesday evening reportedly last sold for about $31,300 in February 2021, roughly one sixth of its latest estimated value.

SURPRISING FACT

Despite the booming support in cryptocurrency, the large majority of aid is still expected to come in the form of traditional currency. On Tuesday, the United Nations put out a call to raise $1.7 billion for humanitarian support in Ukraine and for refugees in neighboring countries. 

FURTHER READING

Ukraine’s Defense Ministry Decides Where Crypto Funds Are Spent(CoinDesk)

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