Ukraine has received over $70 million in cryptocurrencies since the start of the Russian-Ukrainian conflict, providing the nation with funds for military equipment and humanitarian assistance.
The figures came from a Feb. 24 report by blockchain data platform Chainalysis, which found the majority of the funds to have come in the form of Ether (ETH) and Bitcoin (BTC).
ETH donors led the way with $28.9 million given, while donors of BTC and Tether (USDT) chipped in $22.8 million and $11.6 million, respectively.
Donations have also come in the form of nonfungible tokens, such as UkraineDAO’s auction of a Ukrainian flag NFT thasold for $6.1 million.
Around 80% of the total $70 million donated came in the first few months of the war, with the speed of cryptocurrency payments fast-tracking the country’s ability to respond to the Russian invasion, Ukrainian deputy digital minister Alex Bornyakov explained in an interview with Yahoo Finance on Feb. 24:
“If we used the traditional financial system it was going to take days […] We were able to secure the purchase of vital items in no time at all via crypto, and what is amazing is that around 60% of suppliers were able to accept crypto, I didn’t expect this.”
Bornyakov added that the Crypto Fund Aid For Ukraine was an “absolute success” and that he was blown away by not only the amount of donations that came through but the ease at which the digital ministry could access those funds for Ukraine’s defense.
Alona Shevchenko, co-founder of Ukraine DAO, also explained to Yahoo Finance that cryptocurrencies provided a solution when restrictions were imposed on the Ukrainian central banking system:
“The central bank introduced limits on foreign currency transfers in and out of Ukraine to stop the run on the hryvnia […] Thanks to crypto we were able to cover some of our defenders’ immediate needs, there was literally no other way at the time.”
According to an August tweet bMykhailo Fedorov, Ukraine’s vice prime minister and minister of digital transformation, much of the cryptocurrency payments to the digital ministry have been used to fund the country’s military equipment, armor clothing and a range of vehicles and medicine.
With $54 M raised by @_AidForUkraine, we’ve supplied our defenders with military equipment, armor clothes, medicines and even vehicles. Thanks to the crypto community for support since the start of the full-scale invasion! Donation by donation to the big victory. Report below. pic.twitter.com/lifHAP8R4f
— Mykhailo Fedorov (@FedorovMykhailo) August 17, 2022
The increased reliance on cryptocurrencies in Ukraine looks to have increased adoption in the country, with a September report by Chainanalysis finding Ukrainians to be the third-highest adopters, behind Vietnam and the Philippines.
Related: What the Russia-Ukraine war has revealed about crypto
However, pro-Russian military groups have also used cryptocurrency to crowdfund their war efforts, including using crypto donations to fund military purchases, spread disinformation and create pro-invasion propaganda, according to Chainalysis.
The 100 groups have received a total of $5.4 million over the course of the war, however, incoming donations have fallen considerably since July.
It is unclear what impact sanctions had on this downtrend, but a 10th package of sanctions against Russia was introduced on Feb. 24.
Meanwhile, a recent crime report by Chainalysis found that of the $456.8 million total ransomware payments in 2022, a majority of these funds were taken by “actors” believed to be based in Russia.
Chainalysis explained that such attacks are often utilized by bad actors for political agendas, such as that of Russia-based pro-conflict ransomware group Conti, which reeled in $66 million from victims in 2022 and has previously announced its “full support” of the Russian government.