Ukrainian flees to Poland with $2,000 in bitcoin on USB drive

On the morning that Russia went to war with Ukraine, Fadey woke up at 9am to a deluge of Telegram messages from friends asking him what was happening on the ground in the western city of Lviv. After a quick scan of the news, he realized his country was under siege. He decided to get out.

Fadey is 20 years old and asked to be identified by a pseudonym to protect his privacy, because there is conscription for Ukrainian nationals aged 18 to 60. Escaping duty on the frontline meant having to clear the border before officials had the chance to lock it down. To do that, he needed two things fast: A negative Covid test, and money. 

“I couldn’t withdraw cash at all, because the queues to ATMs were so long, and I couldn’t wait that much time,” Fadey told CNBC.

So he turned to bitcoin instead.

Fadey tells CNBC that he made a peer-to-peer (P2P) exchange with a friend, trading $600 worth of his bitcoin savings for złoty, the Polish national currency, which he then used to pay for a bus across the border, a bed in a hostel for him and his girlfriend, and some food. 

The speed and ease of that crypto transaction proved instrumental. Within two hours of Fadey’s safe passage into Poland, Ukraine closed its borders to all men of fighting age.

Fadey also took a USB stick with him across the border containing 40% of his life savings, or about $2,000 in bitcoin. That thumb drive, combined with a unique passcode, became the key to his financial survival. 

“I could just write my seed phrase on a piece of paper and take it with me,” explained Fadey.

His experience highlights some of the most important characteristics of bitcoin: It’s valid across borders, requires no bank, and is tethered to its owner by a password, making it a lot harder to steal than cash.

Nearly a quarter of Ukraine’s population has been forced from their homes in the last four weeks, and the war has strained the country’s financial system. As the invasion proceeded, ATMs across the country started to run out of cash, and some people stood in line for hours only to face a $33 limit per transaction. Transferring money out of national bank accounts proved equally fruitless after the central bank suspended electronic cash transfers on the same day that Russia invaded the country.

Add in closed borders, a rapidly depreciating currency, and the looming threat of a Russian takeover supplanting the Ukrainian hryvnia with the ruble, and it was a perfect use case for cryptocurrency.

“In that part of the world, crypto – despite its volatility, despite the sentiments that the West has towards it – they don’t ask, ‘Why crypto?’ They just ask, ‘How?'” said Brian Mosoff, CEO of Toronto-based crypto investment platform Ether Capital.

“That’s a very powerful thing for a group of people who don’t have financial stability, or political stability right now. To be able…