Bitcoin pouring into Ukraine as Russia masses troops on the border

On Feb 8, 2022

Servicemen of Russia’s Eastern Military District units attend a welcoming ceremony as they arrive at unfamiliar training ranges in Belarus combining their own means of transport with travelling by train, to take part in a joint military exercise held by the Union State of Russia and Belarus and aiming to simulate repelling an external attack on its border, cutting possible supply lines for invaders as well as detecting, containing and eliminating their combat and subversive units.

Russian Defence Ministry | TASS | Getty Images

As more than 100,000 Russian troops mass on the border with Ukraine — and global powers work to stave off all-out war between the two countries — new data shows that Ukrainians are crowdfunding bitcoin to fight back.

Donations totaling hundreds of thousands of dollars have flooded into Ukrainian nongovernmental organizations and volunteer groups, according to a report from Elliptic, which sells blockchain analytics tools to banks and some of the world’s largest cryptocurrency platforms, including Binance and Circle.

Activists have deployed the crypto for a variety of purposes, including equipping the Ukrainian army with military equipment, medical supplies and drones, as well as funding the development of a facial recognition app that identifies if someone is a Russian mercenary or spy.

“Cryptocurrency is increasingly being used to crowdfund war, with the tacit approval of governments,” said Tom Robinson, Elliptic’s chief scientist.

Although Russia says it has no plan to mount an offensive, the U.S., U.K. and others have preemptively sent military hardware to Ukraine to help brace for a possible invasion.

Ukrainian tanks drive during tactical drills at a training ground in the Kherson region, Ukraine, in this handout picture released February 7, 2022.

Ukrainian Armed Forces Press Service | via Reuters

Borderless and censorship-proof

For years, volunteer groups have augmented the work of Ukraine’s military by offering additional resources and manpower. When Ukraine’s pro-Russian president Viktor Yanukovych was ousted in 2014, for example, legions of organized volunteers stepped up to support protesters.

Typically, these organizations receive funds from private donors via bank wires or payment apps, but cryptocurrencies such as bitcoin have become more popular since they allow them to bypass financial institutions that might block payments to Ukraine.

“Cryptocurrency is particularly suited to international fundraising because it doesn’t respect national boundaries and it’s censorship-resistant — there is no central authority that can block transactions, for example in response to sanctions,” said Elliptic’s Robinson.

“The advantage of raising funds in crypto is that it’s a lot harder to confiscate them,” said Boaz Sobrado, a London-based fintech data analyst, who has advised charities in authoritarian countries, including former East bloc nations, on raising funds.

Volunteer groups and NGOs have collectively raised just over…