How cryptocurrency is being used to funnel money to Ukraine

Often maligned as a tool for illicit activities, Bitcoin, Ethereum and other cryptocurrencies have become something of a lifeline to Ukrainians as donors have been using the digital tokens to fund various war-related causes.

More than 120,000 cryptoasset donations totaling about $63.8 million have been funneled to Ukraine since the start of the Russian invasion, according to according to Elliptic, a blockchain analysis company.

“That’s going to top $100 million, soon. It’s a serious amount of money. As of the other week, it’s more than what the UN had given,” said Alex Gladstein, chief strategy officer at The Human Rights Foundation.

Cryptocurrency donations accomplish several objectives: they avoid heavier fees charged by traditional financial networks, transfers are nearly instantaneous, and the digital tokens are mobile — they can be given by anyone and accessed by the owner regardless of their location.

“There are close to two million Ukrainians that have fled into Europe and other countries and they had to do so quite rapidly,” Gladstein said. “Think about a middle-class family. You probably have some stocks and own a house or part of a house. You can’t bring any of that with you. Ukraine is the fourth most crypto-friendly country in the world in terms of per-capita ownership, so those who fled probably were able to take advantage of an asset that could just go with them.

“Ukraine also is a huge technology center and a country where local currency has history of devaluation and collapsing,” Gladstein continued. “The other reason is the government wants to use crypto to raise money for war against Russia. Traditionally, that has been done through bond schemes or government-to-government transfers. Now, through bitcoin, anyone from anywhere can donate to the Ukrainian cause.”

Copyright © 2022 IDG Communications, Inc.

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