The war watered the "flower of money"? Cryptocurrency Becomes Important Financial Tool in Russia-Ukraine Conflict

In the increasingly tense Russian-Ukrainian war, cryptocurrencies are inevitably involved.

In order to prevent Russian entities from using cryptocurrencies to evade sanctions, the United States, Ukraine and other countries have issued warnings and taken corresponding measures. The number of donations using cryptocurrencies is also increasing day by day, and multiple donation channels have been opened one after another. On March 2, the Ukrainian official tweeted that an airdrop will be issued to the addresses of users who donated to it, and a snapshot will be taken at 0:00 on March 4, Beijing time.

“We have no choice but cryptocurrencies,” said Michael Chobanian, founder of Kuna, a major Ukrainian cryptocurrency trading platform. Kuna’s trading volume has also surged in the past three days.

In the context of surging demand, after Bitcoin hit a low price of $34,347, the volatility has risen more than $10,000 in the past week, with an increase of more than 17% in the past 7 days. As of the time of writing, Bitcoin was quoted at $44,408, an increase of 2.79%. Ethereum price breaks above $3,000 and continues upward.

Donations are increasing day by day

In recent years, blockchain or crypto businesses have almost never lost their voices when humanitarian donations are needed.

Recently, a number of companies or individuals in the crypto sector have donated money to the Ukrainian government or the Ukrainian people. Including Binance, FTX, Vitalik Buterin, founder of Ethereum, Justin Sun, founder of TRON, and some hacker groups. But the difference is that the channels and purposes of their donations vary.

Nonetheless, Vitalik Buterin, Justin Sun and others emphasized on Twitter that cryptocurrencies are neutral and decentralized.

At present, the donation channels mainly include three channels: the official account of the Ukrainian government, the non-governmental organization Come Back Alive, and UkraineDAO.

In addition, many companies in the encryption field are also donating to channels such as UNICEF and UNHCR.

According to Binance, its charitable organization, Binance Charity, has pledged to provide $10 million in humanitarian aid to Ukraine, which will be paid to large international non-profits such as UNICEF, UNHCR, and People in Need. Organizations that provide assistance to residents unable to leave the area and those who have lost their homes, and support local services such as food, fuel and supplies for refugees from neighbouring countries.

Binance focuses on the people of Ukraine, not politics. "Our focus is on providing support on the ground, we only care about the people," said Changpeng Zhao.

Binance Charity has also established a crypto crowdfunding website for the "Ukrainian Emergency Relief Fund", and Binance has taken the lead in donating 16,042 BNB, equivalent to more than $6 million. As of this writing, the Ukrainian Emergency Relief Fund has crowdfunded nearly $7 million, with more than 400 donors.

Additionally, Crypto.com CEO Kris Marszalek tweeted that Crypto.com has donated $1 million to the International Committee of the Red Cross (ICRC) to help the people of Ukraine. TRON founder Justin Sun said that TRON DAO donated $200,000 to the Ukrainian people in the form of TRON USDT. Sam Bankman-Fried (SBF), CEO of crypto exchange FTX, tweeted that $25 was distributed to every Ukrainian user of the FTX platform.

Recently, Gavin Wood, the founder of Polkadot, also said that if Ukraine releases the Polkadot address, it will donate $5 million.

It is worth noting that on March 1, the official Ukrainian address opened the Polkadot address (DOT: 1x8aa2N2Ar9SQweJv9vsuZn3WYDHu7gMQu1RePjZuBe33Hv), and Gavin Wood immediately donated 5.8 million US dollars (298,367 DOT), which is the largest donation to the Ukrainian government in the field of encryption so far. .

A few days ago, the official Twitter account of the Ukrainian government and Deputy Prime Minister Mykhailo Fedorov offered bitcoin donations (BTC: 357a3So9CbsNfBBgFYACGvxxS6tMaDoa1P). According to Oklink data, the address received a total of more than 208 BTC, and the current balance is about 5.43 BTC.

In addition, Ethereum (ETH: 0x165CD37b4C644C2921454429E7F9358d18A45e14); stablecoin tether (USDT-TRC20: TEFccmfQ38cZS1DTZVhsxKVDckA8Y6VfCy).

According to the latest donation amount statistics, the official address of Uzbekistan received a total of more than 20 million US dollars.

In addition, the Ukrainian civil organization Ukraine DAO received more than $7.15 million in Ethereum; the armed group Come Back Alive received more than $8.75 million; Unchain.Fund received more than $1.82 million.

Sanctions in the cryptocurrency space

Cryptocurrency has become an important financial tool in the Russian-Ukrainian war. For Ukraine, accepting crypto donations has become an important channel for international solidarity; for Russia, in the eyes of many European and American countries, cryptocurrency is expected to free Russia from financial and economic sanctions.

Regulations by the U.S. Department of the Treasury’s Office of Foreign Assets Control, which took effect March 1, show that U.S. residents are prohibited from using digital currencies to facilitate the Russian government and central bank as a way to circumvent U.S. sanctions over its invasion of Ukraine.

On the same day, Ukraine’s Ministry of Digital Transformation ordered several cryptocurrency exchanges to stop serving Russian users. Including Coinbase, Binance, KuCoin, Bybit, Gate.io and Whitebit as well as the Ukrainian exchange Kuna.

On February 28, Mykhailo Fedorov, Deputy Prime Minister and Minister of Digital Transformation of Ukraine, tweeted that I am asking all major cryptocurrency exchanges to block addresses of Russian users. It is crucial to freeze addresses not only related to Russian and Belarusian politicians, but also ordinary users.

Several exchanges have publicly stated that they will not block all Russian users or IP addresses. If the international community further expands sanctions, it may freeze the wallets of individuals on the sanctions list. Coinbase believes that the mission of cryptocurrencies is to advance economic freedom.

Recently, Western countries announced that some Russian banks will be excluded from the Society for Worldwide Interbank Financial Communication (SWIFT) payment system, causing the ruble to plummet. Although the Russian central bank has raised interest rates, it has continued to depreciate in order to resist currency depreciation, including cryptocurrencies, gold, etc. Assets have become a new choice for the Russian people.

Whether cryptocurrencies can be another way for Russian banks to ease their exclusion from the SWIFT system is currently unknown.