This story was originally published on February 8 and has been updated to include events following Russia’s invasion of Ukraine on February 24.
Cryptocurrency may never have lived up to its promise as an everyday currency for buying a cup of coffee. But it has proven to be a powerful, regulation-resistant means of sending large sums of money anywhere in the world – including Ukraine’s war zone.
Cryptocurrency payments to military and hacking groups in Ukraine, aimed at countering Russian aggression against the country, rose sharply in the second half of 2021, according to cryptocurrency tracking and blockchain analysis firm Elliptic. Crowdfunded payments to these organizations in bitcoin, litecoin, ether and other cryptocurrencies that the company tracks totaled about $550,000 last year, up from just $6,000 in 2020. and even less so in previous years, even at the height of Russia in 2014. invasion of the country.
And now, in the days immediately following Russia’s full-scale military offensive in Ukraine, those numbers have skyrocketed, with more than $4 million sent to a single Ukrainian military supporter in just two days.
That $4.6 million may be just a fraction of the total funds raised by Ukrainian defense and hacktivist groups through more traditional means. But the cryptocurrency’s sudden surge in these global donations demonstrates how borderless, often unregulated crypto payments can fund organizations engaged in future conflicts, says Tom Robinson, founder of Elliptic. “Crypto is censorship-resistant, so there’s no chance of their funds being confiscated or their account being closed, as can happen with PayPal, and it’s also more amenable to cross-border donations,” says Robinson. “It’s proven to be a robust way to finance wars.”
A Ukrainian group called Come Back Alive, for example, raised $200,000 for Ukrainian troops in the second half of 2021 alone, according to Elliptic, but doubled that amount on Feb. 24, the day of the Russian invasion. The next day, it received $3.4 million in crypto donations, including $3 million sent by a single person. The group initially solicited donations of military equipment such as bulletproof vests, but has since expanded into funding the purchase of intelligence and targeting systems.
A more controversial group called the Peacemaker Center — Ukrainian for “peacemaker” — publicly named and shamed alleged supporters of Russia or pro-Russian separatists in Ukraine — at least two of whom were subsequently killed. Myrotvorets raised $268,000 in cryptocurrency before the Russian invasion, Elliptic says, of which $237,000 came in the second half of last year alone.
