• Ukraine spends $15 million in donated cryptocurrency on military equipment

  • As bitcoin donations continue to flood in, the Ukrainian government is being open about how the monies are being spent.

    According to Alex Bornyakov, Ukraine’s deputy minister of digital transformation, the country has spent $15 million of its bitcoin donations for defense gear, including bulletproof vests delivered on Friday.

    The Digital Transformation Ministry, which was established two years ago to upgrade the country’s information-technology industry and provide high-speed internet access, has found military suppliers in Europe and the United States for bulletproof vests, food, bandages, and night-vision equipment not even two days into Russia’s incursion into Ukraine. While some providers accepted cryptocurrency, others only accepted euros or dollars, necessitating the transfer of certain cryptocurrency holdings into these fiat currencies.

    Bornyakov stated in a Zoom interview with Bloomberg that the administration aims to treble the amount of cryptocurrency donations collected so far (56.8 million) in the next days. The majority of the donations were made in Bitcoin and Ether. Smaller quantities, on the other hand, came in the form of stablecoin Tether, Polkadot ($5.8M), Solana, and even NFTs, including one CryptoPunk worth over $200K and the Julian Assange NFTs produced by multidisciplinary artist Pak for $1.86M.

    According to the minister, “most donations come from people,” but some businesses are also pitching in. Among the companies that have made donations is Aid for Ukraine, a group that aims to convert cryptocurrency into US dollars for use in Ukraine with the support of the US-based exchange FTX. The cryptocurrency held by the fund will be turned into US dollars and deposited with Ukraine’s national bank. Anatoly Yakovenko, co-founder of Solana, and Sergey Vasylchuk, CEO of crypto staking business Everstake, founded the fund. Vasylchuk previously collaborated with the Ukrainian government on the development of a Central Bank Digital Currency.

    Birnyakob studied Public Administration at Columbia University and developed, among other businesses, an ad-technology provider. Even while the Russian offensive continues, the ministry is strengthening the country’s information technology infrastructure to assure the continuation of government activity. It is also continuing its task of collecting and utilizing cryptocurrency funds.

    A collection of NFTs is in the works.

    Bornyakov stated that the ministry has hired two businesses to build an NFT collection, which may be available in less than two weeks to earn revenue for Ukraine’s ongoing defense. It has not yet been determined whether or not the NFTs will be limited, nor how they will appear.

    The ministry has no plans to sell CryptoPunk #5364, which features an 8-bit image of a character wearing a blue bandana and smoking a cigarette, or any of the many NFTs sent to it. In 2021, the CryptoPunk was last sold for $43,000. The ministry hasn’t used it because selling it hasn’t been easy. “We’ll work with NFTs later, focusing on issues that we can deal with right now.” We don’t have time to figure out how to convert them.”

    Many con artists are taking advantage.

    Fraudsters have taken advantage of this circumstance by targeting people who want to aid Ukraine and providing inauthentic addresses for people to transfer donations to. On Saturday, February 26, 2022, the Ukrainian government requested crypto donations from the public, prompting Ethereum co-founder Vitalik Buterin to advise users not to send funds to addresses without first checking that they are not scammers’ addresses. “This information environment is as hostile as it gets; maintain heightened attention.”

    However, donations continued to flood in, possibly establishing a real-world use case for cryptocurrency when the banking system fails to meet urgent requirements. The time it takes to transfer bitcoin or ether is considerably less than the time it takes to settle regular remittance payments.

    What's your reaction?