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Crypto and Ukraine: A full summary of an intense week of news

By Imogen Smith
March 4, 2022 0

Cryptocurrency has circumvented the bureaucratic red tape that typically insnares economies during conflict, such as that between Russia and Ukraine. As the war continues between the nations, the support of the global crypto community rises alongside.

In the days since Russia’s invasion, the Ukrainian government has overtly solicited crowdfunded cryptocurrency donations, attracting “Western crypto evangelists” and their digitally lined pockets. This avenue also provides the ‘every-man’ crypto holder the opportunity to contribute at a time overshadowed by the feeling of helplessness.

“Blockchain allows us to scale our efforts in a way that wasn’t possible for us before,” Nadya Tolokonnikova, a spokeswoman for Ukraine DAO, said in an interview with The New York Times. “The old ways of raising money sometimes are really slow and just clumsy.”

The power of DeFi has ultimately been a saving grace for Ukraine in an unprecedented way yet has taken some unexpected turns as the world traverses unnavigated terrain for a cause of this scale.

We’ve compiled a summary of situation between Ukraine and the crypto world to make this confusing and chaotic situation a bit easier to follow:

The donations

$42 million worth of digital currency has been donated to Ukraine since the government’s first plead over Twitter, asking the online world to: “Stand with the people of Ukraine. Now accepting cryptocurrency donations. Bitcoin, Ethereum and USDT.”

Since then, more Ukrainian crypto wallets have been released on Twitter to receive Polkadot and Doge tokens.

Ukraine’s Minister for Digital Transformation and frontman of the nation’s crypto crusade, Mykhailo Fedorov, called out Tesla CEO Elon Musk and Doge creator Billy Markus in a wallet announcement on Twitter. Markus responded by sending his own donation and replying, “Dogecoin folks aren’t usually rich and Dogecoin, itself, is generally used for small transactions, but we are a caring and passionate bunch.”

Among the various digital donations is a highly sought after Cryptopunk NFT with an estimated value of over $200,000 according to CoinDesk. UkraineDAO also amassed $6.1 million worth of Ethereum through the sale of a 1/1 Ukrainian flag NFT.

Global airdrop cancelled, Ukraine to send NFTs

Earlier this week, the Twitter account for the Ukrainian government confirmed a highly anticipated airdrop of tokens to anyone who donated crypto in support of the country. As an incentivised ‘thank-you’ from the Ukraine, this type of airdrop was expected to be the first of its kind by which a country participates in active crypto-adoption encouragement.

The official Ukrainian crypto wallet reportedly received $7 million in donations after the announcement was made.

Mere hours before the event time, the airdrop program started taking some unexpected turns. A “spoofing” operation by a fake account created seven billion “Peace World Tokens” which were released an hour before the intended airdrop time. The tokens mimicked what was anticipated in the airdrop but were soon flagged by blockchain explorer Etherscan as possible attempts of scamming or phishing.

Hours after this news started circulating, Minister Fedorov announced the cancellation of the airdrop event over Twitter: “after careful consideration we decided to cancel airdrop. Every day there are more and more people willing to help Ukraine to fight back the aggression.”

While the reasoning for the cancellation remains unclear, Fedorov said the country will soon announce NFTs to support Ukrainian armed forces and that the nation has no plans to issue fungible tokens.

Members of the crypto-twitter community were not so happy with the government’s U-turn decision, with many users describing the action as an elaborate rug-pull.

Scammers trying to play the vulnerable

Hours after the Ukrainian government’s first donation Twitter post, co-founder of Ethereum, Vitalik Buterin, responded with a warning to not send out funds to wallets without verification. “There have been a lot of hacks alongside this invasion,” he wrote in a since-deleted tweet. “This info environment is as hostile as it gets, exercise extreme vigilance.”

A short time later, the wallets were verified by Minister Fedorov as legitimate, however, scam exploits have still occured.

A report by Bleeping Computer exposed several scam and phishing sites designed to entice prospective donors through emails, forum posts and websites masquerading as legitimate donation hubs. The report explained the fraudulent emails have been mirroring that of the UN Office for the Coordination of Humanitarian Affairs parading as a part of the “Help Ukraine” movement.  

Donors are warned to exercise caution and vigilance before sending through funds to these campaigns.


Imogen Smith

Imogen is a journalist for CryptoVista reporting on the complexities of the digital currency space and its latest news from around the world.

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