At its core, cryptocurrency exists for one reason: greater financial and economic freedom across the globe. In Ukraine, crypto donations allow organizations to ask for and fund non-lethal aid for the armed forces.
The War on Ukraine and Crypto Philanthropy
Positioned to take advantage of crypto donations after legalizing cryptocurrency in September 2021, the Ukrainian government requested donations almost immediately.
They posted addresses for their Bitcoin, Ethereum, and Tether wallets on social media two days after Russia invaded. Within days, $10M was in those wallets.
“Crypto really helped during the first few days because we were able to cover some immediate needs,” says Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation.
Bornyakov later created Aid for Ukraine. According to the website, $60M in crypto has been raised to date. The funds are held by Kuna, a Ukrainian crypto exchange.
Who Oversees Ukraine’s Crypto Donations?
Kuna was co-founded by Michael Chobanian. He oversees the funds and is tasked with spending those funds to help equip Ukrainian forces.
The Ministry of Digital Transformation does not accept donations for the fund, nor do they spend the money donated. Instead, Chobanian routes the funds through governmental, volunteer, and charitable organizations to ensure the armed forces have the items they need to defend Ukraine.
“I am in charge of collecting, fundraising, and storing crypto – and also exchanging crypto to crypto and crypto to fiat, opening bank accounts for intermediaries or for the government, and then buying whatever is required by the Ministry of Defense,” Chobanian told Bloomberg.
Cryptocurrency’s ability to quickly and efficiently cross borders has been invaluable to the Ukrainian war effort.
Cryptocurrency is Efficient
It takes much less time to receive crypto donations than it does traditional transactions through the ban. Due to the differences in processes, it takes about ten minutes for a Bitcoin transaction to close. However, it can take days to receive the same amount through a traditional banking system.
“So three days versus 10 minutes—therefore, we prefer crypto.
You can understand that time is money for my country right now. So, if we can save a minute, it means that we can save at least someone’s life,” explained Chobanian.
Chobanian, who is the President of Ukraine’s Blockchain Association, is the “father of crypto” in Ukraine. He has been involved with crypto since 2011 and has been a loud proponent of the utility of the currency for a decade.
Chobanian always knew that crypto would become a vital part of the economy. He never imagined that war would be the reason why. Ukraine’s crypto adoption was high before the war, but there were still skeptics within traditional institutions. Since the invasion, those feelings have shifted. Crypto is now the most valuable form of currency in the country.
“Now there is no skepticism because they understand that we save lives every single minute with crypto. You cannot ignore when families are actually fed with crypto or when the soldiers are dressed in bulletproof vests and helmets [because of] crypto. You cannot ignore that,” said Chobanian.
How Crypto Donations in Ukraine are Being Spent
The Aid for Ukraine funds help volunteer organizations and various ministries make purchases. Additionally, the website keeps a tally of items being bought – both the number of units as well as the amount spent.
As of April 14th, which is the last reporting period, Aid for Ukraine has spent $45 million on a variety of items, such as:
- $5.6M on vests, helmets, tactical backpack, military clothing
- $3.8M on field rations
- $33K on fuel
- $3.9M on anti-war media campaigns
- $6.1M on digital scopes, thermal imagers, monoculars
- $1.2M on military medical kits
“Today, crypto is playing a significant role in Ukraine’s defense. Huge thanks to the crypto community for this unprecedented support of Ukraine and its defense of the principles of democracy and freedom in face of the war waged by the Russian Federation.” – Alex Bornyakov, Deputy Minister of Digital Transformation of Ukraine
As of Mid-May, total crypto donations have accounted for $135M in funds for Ukraine.
Ukrainian NGO’s and Crypto Philanthropy
Non-governmental organizations have also been accepting crypto donations for their various humanitarian missions. For example, the Palianytsia charity fund has raised $2M in crypto.
Palianytsia
Anton Kosheliev, co-founder of Palianytsia, told Coindesk that the fund accepts traditional currencies as well. But, a crucial amount failed to reach the charity due to the scrutiny of financial institutions. Many financial institutions consider Eastern Europe to be a risk.
“When we needed an ambulance car, we were searching all over Europe and we came across a British company that went bankrupt. It had 26 cars, and we bought them for $200,000,” Kosheliev said.
Palianytsia used a third party to buy the ambulances with crypto. The ambulances ended up with the Ministry of Healthcare after getting tuned up.
Unchain
Unchain, accepts crypto to support entities like Voices of Children, International Medical Corp, People in Need, and more.
In some instances, the funds are being used to buy medical supplies. In others, Unchain has used them to evacuate people from Kharkiv (a Ukrainian city that has experienced heavy shelling). They’ve also given money to a baker in Kyiv who was baking and giving out bread for free.
Come Back Alive (CBA)
This Ukrainian NGO was founded by Vitaliy Deynega in 2014 and had humble beginnings. Deynega began buying and sending bulletproof vests to soldiers. In each of them, Deynega wrote “Come Back Alive,” which is where the organization got its name.
The first vests sent by Deynega arrived on May 14th, 2014. Deynega later determined there was a greater need for items other than vests. Since then, the organization has grown into one of the major suppliers of military aid in Ukraine.
Problems with Patreon
CBA has historically used Patreon to accept donations. They last withdrew a payment from the platform in August of 2021. Then, Russia invaded Ukraine. As such, the organization racked up $300,000 in donations via Patreon in a matter of days.
Despite using the platform for many years, the influx of donations may have flagged their cause. Come Back Alive was suspended and then removed from Patreon in February. They were in violation of a Patreon policy that does not allow the platform to be used to fund military activity.
“We have people dying because they don’t have body armor,” said Taras Chmut, Director of Come Back Alive.
The organization has also provided items such as military vehicles, surveillance equipment, medical kits, and televisions.
All the money that had been held in Come Back Alive’s Patreon account was refunded to donors. But, Come Back Alive had already been accepting cryptocurrency donations. Once their Patreon was suspended, they raised $400k in crypto in just 24 hours.
We’ve written before about the trials and tribulations of using a third-party platform to fundraise. Like Come Back Alive, your organization can be removed from a third-party platform with little to no warning. Additionally, sites like Facebook and Instagram, where many organizations host fundraising campaigns, can crash and cause your organization to essentially be offline for hours at a time.
Key Takeaways
There are many lessons to be learned from Ukraine’s experience with crypto philanthropy. First, that people are infinitely generous – pouring into causes they deeply care about. Second, that organizations cannot simply rely on third-party platforms to host their fundraising. And last, that charitable causes must diversify their funding.
It just so happens that GiveWP makes it easy to host your own fundraising right on your WordPress site. AND we’ve integrated with BitPay to help your organization create meaningful currency diversification and meet your donors where they are.
For more information about GiveWP or our BitPay integration, visit our demo website or schedule a demo with our team.
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