Since the start of the conflict, $4.1 million in cryptocurrency has been channeled to the Ukrainian military.

• According to new data from blockchain analytics firm Elliptic, millions of dollars in donations are being funneled to the Ukrainian army in cryptocurrencies like bitcoin.
• Since the invasion began, the military has received $4.1 million in crypto donations, with a single $3 million contribution coming in on Friday.

According to new data from blockchain analytics firm Elliptic, millions of dollars in donations are being funneled to the Ukrainian army in cryptocurrencies like Bitcoin.

Since the invasion began, nongovernmental organizations and volunteer groups in Ukraine have raised $4.1 million in crypto, with a single $3 million donation made on Friday.

On Thursday, an NGO received over $675,000 in bitcoin, and by Friday morning, it had received more than $3.4 million thanks to a one-off $3 million donation.

Organized volunteer groups have been crucial in the Russia-Ukraine conflict by providing additional resources and manpower to support Ukraine's military efforts. In 2014, when Ukraine's pro-Russian president Viktor Yanukovych was ousted, legions of volunteers stepped up to support protesters.

Organizations in Ukraine typically receive funds from private donors through bank wires or payment apps, but cryptocurrencies like bitcoin have become an important alternative funding method due to their ability to facilitate quick, cross-border donations that bypass financial institutions that may block payments to Ukraine.

The Ukrainian Ministry of Defense has stated that it will not accept direct crypto donations.

According to a statement on the government's website, the Ministry of Defense of Ukraine is prohibited from using alternative payment systems such as 'Webmoney,' 'Bitcoin,' and 'PayPal.'

The military accepts donations for logistics and medical support, but these contributions must be processed through fiat channels.

What the crypto is being used for

The crypto has been used by activists for various purposes, such as providing the Ukrainian army with military equipment, medical supplies, and drones, as well as funding the development of a facial recognition app that identifies Russian mercenaries or spies.

According to Tom Robinson, Elliptic's chief scientist, cryptocurrency is ideal for international fundraising because it transcends national boundaries and is resistant to censorship. There is no central authority that can hinder transactions, making it an effective option, even in the face of sanctions.

Governments are silently endorsing the use of cryptocurrency for crowdfunding war, according to Robinson of Elliptic, a company that provides blockchain analytics tools to banks and major cryptocurrency exchanges such as Binance and Circle.

In 2018, the group Come Back Alive started accepting cryptocurrency and offers equipment, training services, and medical supplies to the military. Additionally, they funded the development of a drone-based reconnaissance and targeting system for Ukrainian artillery units.

Other groups have requested crypto donations, specifically nonfungible tokens (NFTs), to support the Ukrainian resistance.

Amidst martial law in Ukraine and Russian military aggression, some Ukrainians are turning to cryptocurrencies as an alternative to digital money transfers.

Tether's USDT stablecoin is being sold at a premium to domestic buyers on Kuna, a well-known Ukrainian crypto exchange.

"Michael Chobanian, founder of Kuna, stated in an interview with Coindesk that the government, banking system, and local currency are not trusted by the majority of people, leaving them with no other option but to turn to crypto."