- Bitcoin, ether, and other digital assets have become an essential part of the Ukraine war.
- Ukraine has raised $22 million through thousands of crypto donations since the start of the war.
- Crypto exchanges, enthusiasts, and even Western countries are looking to crypto to support Ukraine.
The world is leveraging an unlikely weapon amid the war in Ukraine — cryptocurrencies.
Ukraine's digital wallets are collecting millions to fund the country's defense; the West is weighing possible crypto sanctions on Russia; a crypto collective called a DAO is raising money for Ukraine through an NFT sale; and crypto exchanges are being urged to block Russian transactions. The various moves are a sign of the times: a 21st Century world arming itself with digital currencies in an inaugural war of the crypto age.
In a novel move, Ukraine's official Twitter account shared its digital wallet addresses where people could send their bitcoin and ethereum, among other digital assets, on Saturday.
The addresses, according to Elliptic data, have received $14.8 million to date, with bitcoin and ethereum making up a majority of the donations. Some people even donated NFTs of varying value to support the cause, including a "Mutant Floki."
Meanwhile, a charitable group in Ukraine called Come Back Alive collected $4 million worth of crypto to boost its efforts in supplying military gear and medical kits to the country.
In total, Ukraine's government and other organizations have raised a whopping $22 million through more than 23,000 crypto donations since the start of the Russian invasion, according to Elliptic.
Outside of the Eastern European country, where Russia launched a full-scale invasion last week leading to widespread casualties, the West has also begun leveraging crypto in support of Ukraine.
The US is weighing limits on Russia's access to bitcoin and other cryptocurrencies as part of its next wave of sanctions on the country, according to the Wall Street Journal. The possible crypto sanctions would likely target exchanges that violate bans against transacting with blacklisted Russian banks and potentially limit Russia's ability to seek refuge in digital assets.
Western sanctions already have begun wreaking havoc on the Russian economy and have crippled the ruble, making it worth less than even Robux, the digital token underpinning the Roblox metaverse, Litquidity found. Bitcoin trading volumes using the ruble and Ukraine's hryvnia have surged to their highest level in months, indicating the cryptocurrency could be more attractive in those markets, Bloomberg reported.
Crypto exchanges are also being pulled into the conflict, with Ukraine calling on them to block Russian customers' accounts.
Coinbase said it's working to block addresses in sanctioned areas and monitoring threat actors as part of its effort to "remain vigilant to ensure we are playing our part and meeting our obligations in the context of this rapidly evolving invasion." And FTX donated $25 to each Ukrainian on its platform, according to crypto billionaire Sam Bankman-Fried, who tweeted "do what you gotta do." The company did not immediately respond to Insider's request for comment on any other actions it's taking.
In true crypto fashion, though, crypto enthusiasts — separate from government influence — have mobilized their own efforts to support Ukraine.
One involves a crypto collective called a DAO, short for decentralized autonomous organization, that is auctioning an NFT to raise funds for the Ukrainian effort. The highest bid for the NFT, which features a picture of the Ukrainian flag, is $3 million so far with about two days left in the auction.
Crypto's influence in the current conflict hasn't saved it from the broad market turmoil. On Friday, Insider reported over $200 billion had been wiped out from the crypto market amid the escalating Ukraine conflict. On Monday, however, cryptocurrencies staged a rally as delegations from Ukraine and Russia met for talks in Belarus.
According to a Substack post from crypto influencer Anthony Pompliano, countries that have a big stake in bitcoin and pro-crypto activities "will have a significant advantage." For global superpowers, bitcoin "will be essential for decades to come," he wrote.