Bitcoin donations have soared to Ukrainian volunteer and hacking groups, some of which have provided equipment to government forces, according to a report showing such groups received more than $550,000 worth of cryptocurrency by 2021.
The report, published Tuesday by blockchain researcher Elliptic, suggests that digital currencies are gaining importance as a funding method for volunteer groups supporting the Ukrainian government as fears of an attack by Russian troops gathering close to the border rise. Moscow denies planning an attack.
Cryptocurrency worth just $6,000 (about Rs. 4,48,900) was raised by the groups in 2020, Elliptic said.
Cryptocurrencies can be sent and received anonymously, allowing organizations to raise funds even if financial companies don’t allow money transfers or impose strict controls.
“Cryptocurrency has proven to be a robust and growing alternative (to traditional currencies) — especially when it comes to donations from other countries,” Elliptic said.
In 2020, Ukraine tightened controls to curb money laundering and demanded identity verification for some domestic money transfers. According to the Ukrainian National Bar Association, cross-border transfers are also subject to mandatory control.
Elliptic tracks the movement of cryptocurrency on the blockchain for financial companies and government agencies. It said a group, Kiev-based Come Back Alive, began raising funds in crypto in 2018 and received crypto worth nearly $200,000 (about Rs. 149.7 lakh) in the second half of 2021 alone. .
Come Back Alive says it provides equipment and medical supplies to the Ukrainian military, including drones, sniper scopes and mobile surveillance systems.
The donation page of his website lists a bitcoin digital wallet address and details of his bank account, a crowdfunding site and his SWIFT global interbank payment code. Funds are raised primarily in traditional currencies, with 199 million hryvnias ($7.1 million, or about Rs. 5,313 lakh) raised since 2014.
Come Back Alive told Reuters that it had raised cryptocurrency worth $166,781 (about Rs. 124.7 lakh) in 14 transactions since August, which remains unused. “We’re saving it for our future projects,” an email reads.
“We created a bitcoin wallet because people keep asking for it, and we want to give everyone opportunities to comfortably support us.”
Reuters was unable to independently verify the crypto donations received by it or other groups. The Ukrainian Defense Ministry had no immediate comment on the report.
Hactivists and Cyber Supporters
Another group, Ukraine’s Cyber Alliance, has raised nearly $100,000 (about Rs. 74.8 lakh) in crypto over the past year, Elliptic said.
The group’s Facebook page describes it as “a community of Ukrainian hacktivists from various Ukrainian cities and parts of the world” and lists a bitcoin digital wallet address.
An Alliance spokesman last year told interviewers that the group wanted to obtain information about Russian security and political figures and passed on information to the Ukrainian military.
In response to an email from Reuters, the Alliance said it had never conducted a “massive crowdfunding campaign” with crypto, although it does accept digital tokens from private donors.
The value of the crypto raised has “barely reached” $1,000 (about Rs. 74,800) “since the beginning of life on Mother Earth,” it added.
Another Ukrainian group, the Myrotvorets Center, publishes personal information — a practice known as doxxing — about those it deems “pro-Russian.”
The website says it provides information for law enforcement and special services, and lists a bitcoin donation address and channels for donating traditional currencies.
The Myrotvorets Center has raised at least $267,000 (about Rs. 2 crore) through more than 100 bitcoin donations, Elliptic said.
Myrotvorets did not respond to a request for comment on the crypto donations or their fundraising with traditional currencies.
Another group that has acted in Ukraine’s interests, the Belarusian cyber partisans, has raised three-and-a-half bitcoin with a combined current market value of $155,000 (about Rs. 1.15 crore).
The group does not raise money in traditional currency because “it is difficult to set up a secure method,” said Yuliana Shemetovets, a spokesperson for the group.
The group provides a bitcoin digital wallet address for donations on the Telegram messaging app and on its Twitter feed, which has nearly 67,000 followers. It has raised $84,000 (about Rs. 62.8 lakh) in crypto in the past six months, Elliptic said.
© Thomson Reuters 2022
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