According to Michael Chobanian, founder of the Kyiv-based cryptocurrency exchange Kuna, at least $14 million has already been disbursed from the $26 million in crypto that the Ukrainian government raised during the Russian invasion.
This could help to dispel fears about crypto’s role in the conflict. Authorities around the world are concerned that non-state financial networks such as Bitcoin and Ethereum could allow Russia to bypass economic sanctions. Others believe decentralized networks may help raise funds quickly for a besieged country.
Chobanian stated: “I want this opportunity to thank all crypto guys who helped us.”
One of the essential attributes and guarantees of the underlying blockchain technology is that transactions on most cryptocurrency networks can be seen publicly. However, this doesn’t necessarily mean that it is always clear how the funds have been used.
The second-poorest European country based on per capita gross national income, Ukraine has a long history full of corruption. Some are concerned that crypto donations, while traceable, might not be beneficial to the intended recipients.
Chobanian said that they’re using it efficiently. “The majority of spending actually takes place in crypto,” Chobanian said. He also stated that he updates Twitter every three hours with information about where donations came from.
Chobanian helped to set up two charitable funds in Ukraine to help the war effort and the war-affected populations, he stated. He said that the Crypto Fund of Ukraine has been used primarily to purchase food, gas and medical supplies for civilians as well as firearms to evacuate people.
The Ministry of Digital Transformation coordinates the second wallet that funds the army. Chobanian said that the exchange platform is helping the government convert crypto to fiat money because “the government doesn’t know how to manage the crypto.”
However, Ukraine’s Defense Ministry has decided where crypto funds will go.
Numerous high-profile crypto entrepreneurs have made large monetary contributions. These include Gavin Wood and Polkadot, Tron founder Justin Sun, and Vitalik Buterin. Vitalik Buterin was born in Russia, and has spoken out against the war.
The Kuna exchange is converting most funds in less-known cryptos like DOT or Tron into Bitcoin and/or Ether. This exchange has been a key component of these charitable efforts. Chobanian stated that this is the preferred method for most.
Kuna is taking steps to ensure that all incoming donations are “clean” and blacklisting any suspicious transactions. Chobanian stated that if it comes from the “dark web”, there is nothing I can do about it later.
The crypto is sent to cold wallet and protected using a multisig, which means that multiple parties need to agree to access the funds.
Another important aspect of the crypto market is the increasing demand for stablecoins, such as USDT. Chobanian said that the cryptocurrency exchange had difficulty meeting growing demand. He said that wealthy clients had chosen the stablecoin to be their “safe haven”. The invasion has had a severe impact on the Ukrainian people.