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Journalist Unravels Wild Tale of Vitalik Buterin’s $1 Billion Crypto Donation to Indian Covid Relief Fund

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Sam Cooling

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Sam Cooling

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Sam is a financial journalist with a focus on cryptocurrency market news, based in London. With a Master’s Degree in Development Management from the London School of Economics, Sam’s passion for...

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Last updated:

October 23, 2023

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Back in 2021, amid the best of the bull run and the worst of the Covid-19 Pandemic, Vitalik Buterin made a now legendary donation of $1bn in SHIB to support Covid-19 efforts in India.

Now almost two years later, an investigation by top crypto journalist Isabel Hunter (DL News) has revealed that only as little as 5% of the original donation made it to Covid relief efforts in India.

The Ethereum-founder donated $1bn in SHIB tokens to an Indian Covid Relief Fund (called Crypto Relief) which was setup by Polygon founder Sandeep Nailwal.

Nailwal established the fund when Covid-19 saw a huge breakout in the world’s largest democracy, with up to 3m reported new daily cases.

I spent the last few months tracking down what really happened to @VitalikButerin's $1 billion crypto donation to @sandeepnailwal 's Indian Covid Relief Fund @CryptoRelief_– it’s a wild story that includes a Puerto Rican bank and Alameda Research.

Here's what we found…🧵

1/8
— Isabel Hunter (@isabelhunter) February 22, 2023

Buterin Donation Broke SHIB Liquidity

Of the original $1bn donated – Vitalik sent 500 ETH and over 1 Trillion Shiba Inu (SHIB) tokens.

However, while Crypto Relief quickly moved to cash in on the jaw-dropping donation – the sheer size of the stack pushed SHIB to the limits of its liquidity.

In an OTC deal with WishfulCynic and WinterMute, Crypto Relief were able to trade the near billion dollar stack of SHIB for just $500m in stablecoins (predominantly USDC).

This raises huge questions about the practical liquidity behind insane multi-billion market caps – with such low liquidity levels a worrying sign for the industry.

Thanks a lot for your kind words! ❤️@VitalikButerin https://t.co/wzcQ83vJ4W
— CryptoRelief 🇮🇳(Now Blockchain For Impact – BFI) (@CryptoRelief_) November 26, 2022

How was the $500m USDC spent?

Of the $500m received in stablecoins, $274m remains in the Crypto Relief wallet.

The Crypto Relief fund returned $100m to Vitalik’s Balvi Fund – which was established shortly after to fund bold projects offering innovative responses to the pandemic.

$100m was seemingly off-ramped between April 2021 and April 2022 – and surprisingly disgraced Alameda Research handled up to $1.5m of these funds.

From this cash-out, only $58m reached registered non-profits and NGOs in India – with 57 of the 60 projects declared by Crypto Relief funds confirming their receipt of the donation share.

Yet, a bank statement shared recently by Nailwal showed that $40m of this funding remains sat in a bank account in Puerto Rico (with US licensed FV Bank).

Overall, this means that only 5.8% of Vitalik’s original $1bn SHIB donation was ever received in India.

And two years later, upwards of $314m (31%) of the donation remains sat in crypto wallets and bank accounts controlled by Nailwal.