This story was originally published on on February 8, and has been updated to include events following Russia’s February 24 invasion of Ukraine.
Cryptocurrency may never have fulfilled its promise as the quotidian currency for buying a cup of coffee. But it’s proven to be a powerful, regulation-resistant means of sending large amounts of money anywhere in the world—including the war zone of Ukraine.
Cryptocurrency payments to military and hacktivist groups in Ukraine aimed at countering Russian aggression against the country rose sharply in the second half of 2021, according to cryptocurrency tracing and blockchain analysis firm Elliptic. Crowdfunded payments to those organizations in bitcoin, litecoin, ether, and other cryptocurrencies the company tracks reached a total value of around $550,000 last year, compared with just $6,000 or so in 2020 and less still in previous years, even at the height of Russia’s 2014 incursion into the country.
And now, in the days immediately following Russia’s full-blown military offensive into Ukraine, those numbers have spiked sharply, with more than $4 million sent to a single Ukrainian military support organization in just two days.
That $4.6 million dollars may be just a small fraction of the total funds Ukrainian defense and hacktivism groups have raised by more traditional means. But the sudden rise of cryptocurrency within these global donations demonstrates how borderless, often unregulated crypto payments could fund organizations engaged in future conflicts, says Tom Robinson, Elliptic’s founder. “Crypto is censorship-resistant, so there’s no chance they’re going to get their funds seized or their account shut down, like might happen with PayPal, and it’s also more amenable to cross-border donations,” says Robinson. “It’s proved itself to be a robust way to fund wars.”
One Ukrainian group called Come Back Alive, for instance, raised $200,000 for Ukrainian troops in just the second half of 2021, according to Elliptic, but doubled that amount on February 24, the day of Russia’s invasion. The following day it received $3.4 million in crypto donations, including $3 million sent by a single individual. The group originally solicited donations for military equipment like bulletproof vests, but it has since expanded into funding the purchase of reconnaissance and targeting systems.
A more controversial group called the Myrotvorets—Ukrainian for “Peacemaker”—Center has publicly named and shamed alleged supporters of Russia or pro-Russian separatists in Ukraine—at least two of whom were subsequently assassinated. Myrotvorets raised $268,000 in cryptocurrency prior to Russia’s invasion, Elliptic says, of which $237,000 came just in the second half of last year.
Pro-Ukrainian hacktivists, too, have increasingly funded their digital resistance through cryptocurrency. Elliptic traced around $100,000 worth of crypto donations to a hacker group called the Ukrainian Cyber Alliance, which has been responsible for numerous hack-and-leak and web defacement operations targeting Russians and Russian government agencies. Cyber Partisans, a Belarusian hacktivist group that gained global attention by launching a politically motivated ransomware attack on Belarus’ rail system, has also raised around $84,000 in cryptocurrency. (Elliptic included that number in its $550,000 2021 total, despite the group self-identifying as Belarusian rather than Ukrainian, due to the hackers’ support for Ukraine and demand that Belarusian Railways cease transporting Russian troops in preparation for any invasion of Ukraine.)
