Ukraine volunteer groups turn to bitcoin crowdfunding for the country’s military and logistics as Russian invasion looms

Image: Reuters

About 100 miles from the Ukrainian border, in the regions of Kursk and Voronezh, more than 1,00,000 Russian troops have already amassed ahead of an impending global fear that Russia might invade Ukraine.

And in order to supplement the country’s military and logistical resources to stave off an all-out catastrophic war, Ukrainian volunteer groups are increasingly turning to bitcoin and crypto crowdfunding, per data from Elliptic, a blockchain firm specialising in developing analytics tools for platforms like Binance and Circle.

“Volunteer group operations have included attacks on propaganda sites, the Russian Ministry of Defense, and various individuals linked to Russia’s activities in Ukraine. Intelligence collected during these operations is reportedly shared with Ukrainian law enforcement and intelligence agencies,” according to the report.

Per Tom Robinson, Elliptic’s chief scientist, “Cryptocurrency is increasingly being used to crowdfund war, with the tacit approval of governments. It is also particularly suited to international fundraising because it doesn’t respect national boundaries and it’s censorship-resistant — there is no central authority that can block transactions, for example in response to sanctions”.

Donations worth thousands of dollars have been flowing into various Ukranianan non-governmental organizations and volunteer groups. Several cryptocurrency wallets of these NGOs and volunteer groups have collectively received around $5,70,000 worth of funds over the last year, the report noted.

Among the groups receiving donation inflows in Bitcoin include Come Back Alive, which augments the Ukrainian military with essential equipment, training services, and medical supplies. At the receiving end of bitcoin donations since 2018, the group saw the bitcoin influx surge to almost $2,00,000, particularly in the latter part of 2021.

Another addition to the list is the Ukrainian Cyber Alliance, which reportedly raises money exclusively through cryptocurrency. While the Elliptic report suggests that the Alliance activists have been actively engaging in cyberattacks against Russian targets since 2016, the group received almost $1,00,000 in donations, comprising primarily of bitcoin, litecoin, ether, and other stablecoins.

Kyiv-based NGO Myrotvotrets Center, which has also been accepting crypto donations since 2016 from “more than 40 countries” for its pro-Ukraine cause, has raised around $2,67,000 by means of more than 100 bitcoin donations.

The firm, which has ties with the Ukrainian government, is currently working on a facial recognition app that would easily identify “militants, Russian mercenaries, and war criminals”, in keeping with its modus operandi of publishing information about “enemies of Ukraine”.

While traditional modes of payments still constitute a large portion of such bitcoin donations, crypto is turning out to be a much more lucrative option given that it allows bypassing conventional financial institutions which might disallow payments to Ukraine and is relatively harder to track and monitor.

This isn’t the first time Pro-Russian separatists have turned to bitcoin fundraising. A phenomenon that has been ongoing since the early days of the Russo-Ukrainian conflict in 2014. And Ukraine’s welcoming stance on cryptocurrencies augurs well this existing situation. Infact, per Kyiv Post, the country plans to open the cryptocurrency market to businesses and investors in 2022.

On an official state visit to the U.S. in August 2021, Ukrainian President Volodymyr Zelenskyy spoke of Ukraine’s budding “legal innovative market for virtual assets” as a selling point for investment, and Minister of Digital Transformation Mykhailo Fedorov also added that the country was modernizing its payment markets with Zelenskyy signing a law that paved the way for its central bank to issue its own digital currency.