A recent report by Elliptic investigating the role of cryptocurrencies in the Russian-Ukrainian conflict has revealed that since Russia attacked Ukraine on Feb. 24, 2022, both countries have adopted blockchain technology to finance their war efforts. The data for this study was collected over a period of one year and indicates an ever-growing reliance on cryptocurrency as a means of aiding military campaigns.
Part of Russia’s Crypto Revenues Is Obtained from Illegal Ways
According to Elliptic’s analysis, a large portion of the crypto assets – amounting to $212.1 million – went toward supporting Ukraine. Meanwhile, anti-government organizations in Belarus received only $0.7 million in cryptocurrency donations because it is closely associated with Russia militarily and politically. On the other hand, pro-Russia groups have managed to raise around $4.8 million for Russian military activities and related militias; however, 10% of these funds reportedly came from illegitimate sources, including darknet markets, sanctioned entities, and stolen credit cards vendors as highlighted by the authors mentioned in their report.
From February to the end of September, a TRM Labs study discovered that Pro-Russian entities had amassed a total of around $400,000 in cryptocurrency. Unexpectedly, Chainalysis uncovered even more startling news – it revealed that 54 such groups raked in an impressive amount worth over $2.2 million!
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Ukraine Invests Majority of Incoming Crypto Donations in Weapons
Ukraine’s crypto funding initiatives have been strongly backed by the Kyiv government, which has injected $83.3 million of its own funds into these projects. Thanks to Decentralized Autonomous Organizations (DAOs), Non-Fungible Tokens (NFTs), and Defi platforms, crypto fundraising in Ukraine has achieved remarkable success, with more than $78 million raised as cryptocurrency donations! Russia tried copying this model but was unsuccessful due to a lack of support from governments and citizens alike.
Recently speaking with Yahoo Finance UK’s The Crypto Mile podcast, Ukraine’s Minister of Digital Transformation Alex Bornyakov divulged that his government has been procuring essential military equipment such as helmets and bulletproof vests using cryptocurrencies. Astonishingly, he reported that a remarkable 60% of the suppliers accepted crypto payments for their services!
As the war in Ukraine raged on, cryptocurrency donations for the country surged. With over 100,000 people sending cryptocurrencies to support those affected by violence and injustice, Bornyakov highlighted that contributions ranged from a few dollars to millions! Traditional financial systems would take days to process such funds, so Ukraine chose cryptocurrencies, as it needed immediate assistance.
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