As donations in cryptocurrencies continue to come in, the Ukrainian government is openly showing how it uses the funds.
Ukraine spent $15 million of its cryptocurrency donations on combat equipment, including bulletproof vests delivered on Friday, says Oleksiy Bornyakov, Deputy Minister of Digital Transformation of Ukraine.
The Ministry of Digital Transformation, created two years ago to modernize the country’s information technology industry and provide high-speed Internet access, has managed to find military suppliers in Europe and the United States of body armor, food, bandages and night vision devices. even two days after the Russian invasion of Ukraine. While some providers accept cryptocurrencies, others only accept euros or dollars, requiring some cryptocurrencies to be converted to these fiat currencies.
Bornyakov said in an interview with Bloomberg on Zoom that the government expects to double the cryptocurrency donations received so far (56.8 million) in the next few days. Most of the donated money came from bitcoin and ether. In contrast, smaller amounts came in the form of Tether stablecoins, Polkadot ($5.8M), Solana, and even NFTs, including one CryptoPunk worth over $200,000 and Julian Assange’s $1.86M worth of multidisciplinary artist Pak’s NFTs.
The minister said that “most donations come from people” while some companies are also activating. Among the companies that have made donations, one of them is Aid to Ukraine, a foundation whose goal is to convert cryptocurrencies into US dollars for spending in Ukraine using the US-based FTX exchange. The fund’s cryptocurrency will be converted into dollars to be deposited with the central bank of Ukraine. The fund was founded by Solana co-founder Anatoly Yakovenko and Sergey Vasilchuk, CEO of crypto staking company Everstake. Previously, Vasilchuk worked with the government of Ukraine to develop a central bank digital currency.
Birnyakob studied public administration at Columbia University and founded an advertising technology provider among other start-ups. The ministry maintains the country’s information technology infrastructure to keep the government’s work moving forward even as the Russian attack continues. He also continues his work of collecting and using crypto funds.
NFT collection in action
Bornyakov said the ministry has engaged two companies to create a collection of NFTs that could be available in less than two weeks to raise funds to continue defending Ukraine. It has not yet been established whether NFTs will be limited and what they will look like.
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, and any NFTs received as donations. CryptoPunk last sold for $43,000 in 2021. The Ministry did not use it, as it proved difficult to sell. “We’re going to be working on NFT at a later date, focusing on things we can deal with right now. There is no time to figure out how to convert them.”
Many scammers use
The scammers took advantage of this situation by targeting people who want to help Ukraine and providing fake addresses to send funds. On Saturday, February 26, 2022, the government of Ukraine issued an appeal to the public for cryptocurrency donations, prompting Vitalik Buterin, co-founder of Ethereum, to urge users not to send funds to an address without making sure it is not a scam address. “This information environment is as hostile as it gets, be extremely vigilant.”
However, donations have continued to come in, perhaps finally creating a viable use case for cryptocurrencies when the banking system cannot meet pressing needs. The time it takes to transfer bitcoins or ether is much less than the time it takes to make traditional money transfers.
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