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The two sides in the bitter conflict in Ukraine have relied on crypto-assets and technology to support their military and humanitarian activities, Elliptic said in a report. According to the blockchain investigative company, the targeted nation has attracted more digital asset donations than the invading power.
Both Russia and Ukraine have been using blockchain technology to secure funding for their war effort since Russian forces attacked on February 24, 2022, Elliptic revealed in a report exploring the evolving role of cryptocurrencies in the conflict. The study is based on data collected by the crypto analysis firm over the past year.
On the anniversary of the invasion, the company said that “many campaigns have sought to leverage core developments in the crypto ecosystem to aid their fundraising — from decentralized finance (defi) to crypto prepaid cards.” The digital cash was used for various purposes, from humanitarian purposes to financing sanctioned groups.
The analysis of the transactions tracked by Elliptic shows that the bulk of the money, $212.1 million worth of crypto assets, went to support Ukraine. Anti-government organizations in Belarus, a close political and military ally of the Russian Federation, attracted $0.7 million.
Pro-Russian groups have raised about $4.8 million for the Russian military and affiliated militias. More than 10% of those donations came from illegal sources, according to the report. These include darknet markets, sanctioned entities and stolen credit card providers, the authors said.
At the same time, less than 2% of the cryptocurrency donated to Ukraine originates from this type of source, Forklog noted in its coverage. The crypto news outlet also noted that since May 2022, pro-Russia activists have increased their funding and collected more bitcoin and ether than the Ukrainians in June.
Between late February and late September, pro-Russian entities collected about $400,000 in crypto, according to a study by digital asset compliance and risk management firm TRM Labs. In July, blockchain intelligence firm Chainalysis revealed that 54 such groups have collectively received over $2.2 million in cryptocurrency.
Many of the crypto-funding initiatives on the Ukrainian side have been supported or initiated by the government in Kiev, which received $83.3 million in its own wallets. Defi, non-fungible tokens (NFTs) and decentralized autonomous organizations (DAOs) have played a significant role in facilitating crypto fundraising for Ukraine, attracting over $78 million in donations, Elliptic highlighted, adding that Russian efforts to emulate Ukraine’s success in this area has failed.
Speaking to Yahoo Finance UK’s The Crypto Mile podcast, Ukraine’s Minister of Digital Transformation Alex Bornyakov revealed that his country has purchased military equipment using crypto and claimed that 60% of suppliers agreed to be paid in digital currencies to provide Ukraine with necessities like for example. helmets and bulletproof vests.
More than 100,000 people have sent crypto to Ukraine, according to the report, and Bornyakov said donations ranged “from one dollar worth to millions of dollars.” He pointed out that Ukraine turned to crypto at the beginning of the war because it needed immediate help. “If we used the traditional financial system, it would take days,” he explained.
Do you think the two sides in the war will continue to rely on crypto donations to fund their military and humanitarian efforts? Share your thoughts on the topic in the comments section below.
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