How Ukraine Raised Over $55 Million in Cryptocurrency to Fight Russia

Donations to Ukraine’s government in bitcoin and ether could transform the way nonprofits raise funds. Keep reading to find out how Ukraine Raised Over $55 Million in Cryptocurrency to Fight Russia.
How Ukraine Raised Over $55 Million in Cryptocurrency to Fight Russia
How Ukraine Raised Over $55 Million in Cryptocurrency to Fight Russia

Vitaliy Raskalov was 6,700 kilometers from home when Russia launched an invasion of Ukraine on February 24.

On Sunday evening, the Kyiv-born photojournalist chatted with CNET’s Daniel Van Boom from Mexico City, where he was organizing a supply of protective vests to his country. Cryptocurrency will be used to pay for everything.

Raskalov has been selling a collection of his images as nonfungible tokens, or NFTs, on OpenSea, the largest marketplace for such wares, for the past six months.

Since the battle broke out last week, all of the profits from the set, which includes photos made from atop skyscrapers and other dizzyingly high structures, have gone to Ukraine’s resistance.

“I’m not able to carry guns and protect my nation because I’m abroad of the country,” Raskalov explained, “but I can gather money, raise money, and help.”

He claims to have raised roughly 4 ether, or just over $10,000, which he says will go toward helmets, flashlights, and bulletproof jackets.

According to Chainalysis, Ukraine is one of the world’s top cryptocurrency adopters, trailing just Vietnam, India, and Pakistan.

According to Elliptic, a crypto analytics provider, donations to anti-Russian aggression organizations increased dramatically in the second half of last year, with over $550,000 worth of bitcoins raised in 2021 compared to $6,000 in 2020.

According to Elliptic data, $55.7 million has been raised since Russia began military activities in Ukraine last week.

Donations given directly to the Ukrainian government account for a large portion of this.

Ukraine’s minister for digital transformation, Mykhailo Fedorov, tweeted wallet addresses into which individuals may directly give bitcoin, ether, and tether, a stablecoin tethered to the US dollar, three days after Russia’s invasion.

The identical addresses were shared on Ukraine’s official Twitter account. According to Elliptic, almost $47 million has been donated to these wallets since then.

The success could have a significant impact on fundraising in Ukraine and internationally.

“I’ve been stunned for the past four days,” Raskalov remarked. “That makes me so pleased. I’m both happy and sad at the same moment. More than $10 million was raised thanks to a small NFT group and Twitter. The European Union’s majority of countries did nothing.”

The European Union has announced that it will send a total of 500 million euros ($550 million) in relief.

NGOs and projects like Raskalov’s have garnered millions of dollars in addition to direct donations to the Ukrainian government.

UkraineDAO (a decentralized autonomous organization is a group where token owners may vote on how funds are spent), supported by Russian punk rock band PussyRiot, earned almost $3 million in ether and then another $6.75 million through the auctioning of a Ukrainian flag sold as an NFT.

How Ukraine Raised Over $55 Million in Cryptocurrency to Fight Russia

NFTs for the sake of peace

Seeing all of these bitcoin fundraisers, Andrew Wang, a 23-year-old NFT trader, tweeted to his 140,000 followers on Feb. 24: “What if an NFT collection was made to raise funds?”

“All of these resources are available to us. We’ve got crypto, we’ve got communities, we’ve got art, and we’ve got smart contracts “On Sunday, a sleep-deprived Wang communicated with me via Zoom.

(A smart contract is one that runs automatically when specific conditions are satisfied. One is used in the majority of NFT transactions.)

“What if, instead of just raising crypto, we gathered artists, developed a smart contract, and used it to fund ether?”

The outcome is Reli3f, a collaboration between Wang, five other organizers and developers, and 37 NFT artists.

The number 3 in the name refers to Web3, a phrase that refers to an internet in which blockchain technologies such as cryptocurrency and NFTs are extensively interwoven.

Many of the artists involved in the project are Ukrainian, including Raskalov, who contributed a photograph of Kyiv.

Reli3f was described by Wang as an experiment, yet that description belies its rapid success.

On February 24th, Wang put out the tweet, and a group chat with interested organizers rapidly emerged.

Within the next 24 hours, 37 artists had agreed to each contribute one work.

The collection debuted that night, with 200 copies of 37 different NFTs selling for 0.05 ether, or $130 apiece. It sold out in less than 30 seconds, raising 371 ether, or $980,000.

Wang and his colleagues went about dispersing those funds on Sunday night, in the hours before he spoke to me.

Military support group Come Back Alive, local media vetted by the Kyiv Independent magazine, and medical assistance charity Hospitallers received 61 ether ($160,000) apiece from Reli3f.

“We’re looking into methods to do it again and better,” Wang explained. “What we performed was an experiment, and the more experiments you do, the better you get.”

After the monies were distributed, Reli3f posted a Twitter thread with links to the transactions so that they could be verified. The team’s smart contract was also subjected to investigation.

Wang expects that in the future, the transparency that blockchains provide will be used to improve charity.

“Web3 is something I consider to be neutral. It’s all about tools, and you can use them for good or ill purposes “He went on to say that he hopes Reli3f may be a positive example of the former.

“We’d want to point out that this is an integral feature of Web3. We posted all of the transaction hashes in that thread, explained why we came up with various figures, and made it clear. It’s clear where the money goes.”

The additional benefit of adopting cryptocurrencies, according to Wang, is that it avoids bank transfer limits that have been imposed.

Several Ukrainian banks, notably in the east, have imposed limits on the amount of money citizens can withdraw or relocate.

The National Bank of Ukraine has imposed a withdrawal limit of 100,000 Ukrainian hryvnias ($3,350) and limitations on exchanging local currency for foreign currencies.

The problem is that many businesses do not have wallets in place. That may soon change, given Ukraine’s amazing success in soliciting donations through cryptocurrency wallets.

Crypto, for better or worse

The use of cryptocurrencies in Ukraine demonstrates the benefits of the technology: It’s a spontaneous, multinational fundraising initiative in which substantial sums of money have been promptly sent to local organizations, free of bureaucratic red tape. However, there are drawbacks.

The capacity of bitcoin and ether to circumvent institutional constraints can be leveraged on both sides. The United States and the European Union have imposed broad restrictions on Russian financial institutions, exports, and significant figures in business and government.

Squeeze the economy, and President Vladimir Putin will be forced to the negotiating table, so the theory goes. Some fear that cryptocurrencies, which can often sidestep such limits, may dilute the effect.

In a recent post, Robert Huish, associate professor of international development studies at Dalhousie University, writes, “Russia is delving deep into cryptocurrencies to deal with foreign partners and escape sanctions.”

Huish points out that Siberia is a bitcoin mining hotspot, providing Russia with a steady internal supply.

Apart from widespread exploitation of the anonymity provided by cryptocurrencies, there has also been the usual slew of scams. It has been shared phony wallet addresses purporting to be for charities.

After multiple OpenSea collections copying Reli3f appeared on OpenSea, a Twitter warning was issued.

Raskalov, on the other hand, is upbeat about more than simply bitcoin. “When we win the fight and begin rebuilding our country, Bitcoin will be one of our primary sources of revenue.”