Exclusive: How the Ukrainian Crypto Fundraising Started, How It's Going, and What's Next
Prior to the war, the Ukrainian government had been carefully crafting a light-touch regulatory framework aimed at promoting and fostering the crypto sector.
But the war has had an unexpected effect on crypto and government in the war-ravaged nation. It has essentially turbo-charged certain adoption policies, while crypto has also proven to be a powerful tool in one key regard: Helping the government gain quick access to international aid funds.
For one of the people originally charged with masterminding the creation of a regulatory infrastructure capable of turning Ukraine into a forward-thinking bastion of crypto-powered progress, crypto-powered fundraising has now become an essential part of the war effort.
The country’s Deputy Minister of Digital Transformation and the Leader of the Diia City project Oleksandr Bornyakov told Cryptonews.com about how the government turned to crypto to help power Ukraine’s fightback against Russian aggression – and how it could help form a post-conflict future for the nation.
Cryptonews.com: How did the government go about developing its crypto fundraising strategy?
Oleksandr Bornyakov: Mykhailo Fedorov, the Minister of Digital Transformation, was behind the idea of creating the Crypto Fund of Ukraine. We implemented and set up the Crypto Fund in partnership with the Kyiv-based crypto exchange Kuna, which provided us with the tech infrastructure we needed and facilitated us with transfer operations.
For crypto donations, there are wallet addresses that were generated by Kuna and created two days after the start of the war. Later, alongside the crypto exchange FTX and Ukrainian staking platform Everstake (which is also the biggest decentralized staking provider in the blockchain industry) we launched the official Aid for Ukraine website, where people around the world can donate using cryptocurrencies.
We started working on the legalization of the crypto industry in Ukraine and creating appropriate crypto legislation over two years ago. As a result, the law named “On Virtual Assets” was passed by the Ukrainian Parliament on February 17, 2022. President Volodymyr Zelenskyy signed the law in March.
What were the biggest crypto fundraising-related challenges you faced and how did you solve them?
One of the biggest challenges – one which is still urgent until now, is fundraising for the armed forces. I frequently notice that people have certain reservations about donating to the Ukrainian army. People, for the most part, are willing to send funds for humanitarian aid.
At the same time, it should be clearly understood that if we do not strengthen our army, we risk losing the opportunity to protect those who need protection today.
Those people are peaceful Ukrainians.
I have one thing to emphasize here: Ukrainians are fighting not only for their country’s survival and sovereignty, but also to bolster European security. That’s why it is so important to support the Armed Forces of Ukraine.
How have the results of the campaign compared to what you expected?
We didn’t expect anything. We didn’t have the goal of raising a specific amount of funds. The Crypto Fund of Ukraine has already raised over USD 60 million. Apart from direct donations to our Crypto Fund, millions of dollars worth of crypto have been raised by non-government organizations and other initiatives.
It is heartening to see the crypto community come together in aid of Ukraine. It confirms that blockchain technology can be a powerful tool for supporting open societies.
What would help make this campaign even more efficient?
More media coverage would definitely help. We also plan to report regularly on the items we have purchased and had delivered. That will help people see how their donations make an impact.
What lessons have you learned from your crypto fundraising efforts?
Today, crypto is playing a significant role in Ukraine's defense. It has helped to facilitate the flow of much-needed funds to Ukrainian citizens and soldiers. We can see how crypto can be a force for the good at this terrible moment in our history. Blockchain technology allows us to scale our efforts in order to raise more funds for Ukraine.
The Crypto Fund of Ukraine is a vivid example of crypto’s potential when it comes to strengthening open societies and safeguarding democratic values.
Each and every helmet and vest bought via crypto donations is currently being used to save Ukrainian soldiers' lives. The more protected our soldiers are, the higher our chances are of defending the civilian population of Ukraine.
There are a number of crypto scams run by people pretending to be bona fide Ukrainian campaigners. Have you noticed any patterns about these, and do you know where they might originate from?
We do not investigate from which countries these scammers originate. This is not our area of responsibility. But we react quite promptly to all such scams, and as soon as we identify them, we send complaints and letters demanding that scam websites be blocked.
What further crypto fundraising-related steps are you planning and when might they be implemented?
We currently accept donations in 14 cryptocurrencies including bitcoin (BTC), ethereum (ETH), tether (USDT), solana (SOL), and dogecoin (DOGE). We are working on adding more crypto wallet addresses in order to make it easier for people who want to donate to Ukraine, such as stellar (XLM) and near protocol (NEAR).
We are also working on creating a separate editorial section for all non-fungible tokens (NFTs) projects that are related to crypto fundraising to Ukraine on our official Aid for Ukraine website. Some crypto advocates have donated NFTs to our cause. We want to make it possible to sell them, and thus raise more funds to support Ukraine.
What role is the National Bank of Ukraine playing in the crypto fundraising campaign? What's their opinion on crypto?
The National Bank of Ukraine is not involved in crypto fundraising. The Crypto Fund of Ukraine is an initiative entirely created by the Ministry of Digital Transformation and the Ukrainian crypto business sector. I cannot comment on the opinion of our colleagues on this matter.
Is President Zelenskyy using crypto?
I don't think the President is using crypto now, but he is very supportive and understands how positively crypto could impact the Ukrainian economy.
In your opinion, what role might crypto play in Ukrainian society after the war?
It is difficult to predict what will happen after the war. Our main aim now is to win this war, because it is a question of our survival.
I believe that crypto will stay with us as we are building Ukraine as a crypto-friendly country. We want crypto businesses to have all the legal options they need for growth here.
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