Ukraine has earned $70 million in cryptocurrency donations since the beginning of the conflict in Russia

Ukraine has received more than $70 million in cryptocurrency since the beginning of the Russian-Ukrainian conflict, providing the nation with funds for military equipment and humanitarian aid.

The data comes from a Feb. 24 report published by blockchain platform Chainalysis, which showed that most of the funds came from Ether (ETH) and Bitcoin (BTC).

ETH donors donated $28.9 million, while BTC and Tether (USDT) donors donated $22.8 million and $11.6 million respectively.

Cryptocurrencies transferred to Ukraine in wallets provided by the Ukrainian government. Source: Chain analysis

Donations have also come in the form of non-fungible tokens, such as the NFT Ukrainian Flag Auction, which was sold for $6.1 million by UkraineDAO.

About 80% of the $70 million donated came in the first few months of the war, and the speed of cryptocurrency payments accelerated the country’s ability to respond to a Russian invasion, Ukraine’s Deputy Digitization Minister Alex Bornyakov explained in an interview with Yahoo. Finance February 24:

“If we were using the traditional financial system, it would take days (…) We were able to secure the purchase of essentials at short notice through cryptocurrency and the amazing thing is that about 60% of suppliers were able to accept crypto, I did not expect this.”

Bornyakov added that the Crypto Fund Aid For Ukraine was an “absolute success” and that he was delighted not only with the amount of donations made, but also with the ease with which the ministry of digitization was able to access these funds for the defense of Ukraine.

Ukraine DAO co-founder Alona Shevchenko also explained to Yahoo Finance that cryptocurrencies provided a solution when restrictions were placed on the Ukrainian central banking system:

“The central bank put limits on currency transfers to and from Ukraine to stop the hryvnia rune (…) We were able to meet some of our defenders’ urgent needs with cryptocurrencies, there was literally no other way in time.”

According to an August tweet by bMykhailo Fedorov, Deputy Prime Minister of Ukraine and Minister of Digital Transformation, the majority of cryptocurrency payments to the Ministry of Digital Affairs were used to finance the country’s military equipment, armored clothing, and a number of vehicles and medicines.

Increased addiction to cryptocurrencies in Ukraine appears to have boosted adoption in the country, with a September Chainanalysis report showing that Ukrainians rank third in terms of users behind Vietnam and the Philippines.

Related: What the Russo-Ukrainian War Revealed About Cryptocurrencies

However, pro-Russian military groups have also used cryptocurrencies to crowdfund their war effort, including using cryptocurrency donations to fund military purchases, spread disinformation, and create pro-invasion propaganda, according to Chainalysis.

Total value received by Russian military groups as of February 2021. Source: Chain analysis

100 groups received a total of $5.4 million over the course of the war, however donations received have declined significantly since July.

It is not clear what impact the sanctions had on this downward trend, but on February 24, the tenth package of sanctions against Russia was introduced.

Meanwhile, a recent crime report published by Chainalysis showed that out of $456.8 million of all ransomware-related payments in 2022, most of these funds were seized by “actors” believed to be based in Russia.

Chainalysis explained that such attacks are often exploited by bad actors for political purposes, such as Russia-based pro-conflict ransomware group Conti, which earned $66 million from victims in 2022 and previously announced its “full support” for the Russian government.