Both sides of Ukraine’s violent conflict rely on crypto assets and technology to support military and humanitarian operations, Elliptic said in a report. According to the blockchain forensics firm, targeted countries have collected more donations of digital assets than aggressor countries.
Ukrainian donors sent over $212 million in cryptocurrency
Both Russia and Ukraine have employed blockchain technology to secure funding for their war efforts since the Russian military attack on February 24, 2022, Elliptic revealed in areportexploring the evolving role of cryptocurrencies in the conflict. The study is based on data collected over the past year by the crypto analytics firm.
On the anniversary of the invasion, the firm said, “Many campaigns sought to leverage core developments in the crypto ecosystem to help them raise funds, from decentralized finance (defi) to crypto prepaid cards.” He stated. Digital cash was used for a variety of purposes ranging from humanitarian causes to funding sanctioned groups.
An analysis of transactions tracked by Elliptic shows that the majority of the money, $212.1 million worth of crypto assets, was used to support Ukraine. Rebel groups in Belarus, a close political and military ally of the Russian Federation, collected $0.7 million.
Pro-Russian groups raised about $4.8 million for the Russian military and associated militias. According to the report, more than 10% of these donations came from illicit sources. These include darknet markets, sanctioned entities, and stolen credit card vendors, the authors detail.
At the same time, less than 2% of cryptocurrency donated to Ukraine originated from these types of sources, Forklog said in its coverage. The crypto news outlet also noted that since May 2022, Russia-backed activists have increased their fundraising, raising more bitcoin and ether than Ukrainians in June.
According to a survey conducted by digital asset compliance and risk management firm TRM Labs, between the end of February and the end of September, Pro-Russian entities raised about $400,000 in crypto; in July, blockchain intelligence firm Chainalysis revealed that 54 such groups collectively received over $2.2 million worth of cryptocurrency.
Ukraine’s Digital Minister claims that the majority of military suppliers have accepted crypto
Many of the crypto funding initiatives on the Ukrainian side were supported or initiated by the government in Kiev and received $83.3 million in their own wallets. Defi, Non-Fundable Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs) have played a key role in facilitating crypto fundraising in Ukraine, raising over $78 million, Elliptic said, adding that Russian attempts to emulate Ukraine’s success in this area have failed
According to Yahoo Finance UK’s The Crypto Mile podcast, Ukraine’s Digital Transformation Minister Alex Bornyakov revealed that his country is buying military equipment using crypto, with 60% of suppliers buying helmets and bulletproof vests and other essentials to Ukraine, and claimed that he accepted to be paid in digital currency.
According to the report, more than 100,000 people sent crypto to Ukraine, and Bornyakov said donations varied “from a dollar value to millions of dollars.” He noted that Ukraine turned to crypto at the start of the war because it needed immediate help.” If we used the traditional financial system, it would take days,” he explained.
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