Ukraine-based blockchain firm blasts ‘fake news’ for crypto donation rumors amid FTX collapse

by · November 29, 2022

Everstake, a blockchain firm that partnered with the Ukrainian government to launch a donation site amid the country’s war with Russia, has pushed back against online rumors and conspiracy theories that the platform was being used for politically motivated money laundering.

Ukrainian government officials partnered with Everstake, Kuna and the now infamous crypto exchange FTX to launch Aid for Ukraine in March following the Russian military’s invasion. According to the platform, crypto users and Ukraine supporters sent approximately $60 million in crypto and fiat to support Ukraine’s armed forces and other humanitarian causes. But with FTX’s liquidity problems and bankruptcy, Sam Bankman-Fried’s apparent fall from grace, and possible legal action against the firm and its executives, social media users have taken many liberties with the truth speculating on the final destination of the crypto donations.

The conspiracy theories promulgated online falsely claim that due to the association with FTX and Bankman-Fried’s past political donations, Aid for Ukraine’s funds ended up being sent to the US Democratic Party. An Everstake spokesperson labeled the rumors Russian propaganda, which was spread by North Carolina Rep. Madison Cawthorne’s Twitter account, and “biased media, such as Fox News and Russia Today.”

According to Everstake, the false claims do not match reality, given that the majority of the funds already went to helmets, bulletproof vests and night vision technology for Ukraine’s military, as the country’s Deputy Prime Minister Mykhailo Fedorov reported in August. The spokesperson added that the situation with FTX “does not affect the operation of Aid For Ukraine,” as the platform only used the exchange “a few times” to convert crypto donations to fiat in March and had no funds stored on FTX at the time. of its collapse.

“Every time Russia is defeated on the battlefield, it starts looking for another way to cover up its military failures in the media by spreading fake news based on fabricated assumptions,” said Everstake CEO Sergey Vasylchuk. “This time they decided to use the collapse of FTX to spin yet another story about money laundering. It is obvious that Western support for Ukraine hurts Russia as it leads to losses on the battlefield. We know for sure that every donation was spent in favor of Ukraine.”

One of the kernels of truth in the rumor surrounds Bankman-Fried admitting to being a “significant donor” to political candidates in the 2022 US midterm elections, but with the majority of his contributions going to Democrats. On November 29, the Texas Tribune reported that Texas gubernatorial candidate Beto O’Rourke—a Democrat who lost his race to incumbent Greg Abbott—returned a $1 donation from SBF before Election Day.

“I wish I could have made it,” Bankman-Fried joked in a Nov. 16 interview with Tiffany Fong that addressed the rumors. “I helped Ukraine launder funds for the Democratic Party? […] I wish I was part of an international conspiracy so interesting.”

Speaking to Cointelegraph, Vasylchuk said that Ukrainian government officials had been forced to respond to “serious people” who asked about the online rumors. The Everstake CEO speculated that the recent upheaval on Twitter as Elon Musk took over as CEO had further opened the door for conspiracy theories to run amok on the platform, such as the one linked to FTX and Ukraine’s crypto donations.

Related: Ukraine-based blockchain firm announces ‘we’re still hiring’ amid market downturn, war

“Society is blind to stop the spread of lies and propaganda,” Vasylchuk said. “We see how propaganda can influence as in Russia – [they fooled] millions of people. At the same time, I see them turn to [fooling] Americans and social media can do the same. So I’m very scared. I am afraid of the information and afraid of how easy it is to manipulate or force people to believe one type of information.”

He added:

“This information was similar to information such as ‘Ukraine developed fighting mosquitoes that will bite Russians’ […] I thought that American society is much more mature than it is in [Europe]and the people are actually able to feel the reality, the obvious nonsense, but unfortunately not.”

Vasylchuk reported that crypto donations through Aid for Ukraine had decreased in recent months. Many crypto users are expected to send cash and tokens to various organizations as part of Giving Tuesday, or Bitcoin Tuesday, on November 29.