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What the Russia-Ukraine conflict has revealed about crypto

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The conflict between Russia and Ukraine has tested the capabilities of cryptocurrencies in a real-world conflict rich in sanctions and ingenious blockchain crowdfunding models.

As the war enters its ninth month, the many benefits of blockchain have become apparent, including its ability to support humanitarian efforts. It also revealed how much power national authorities can exercise over cryptocurrency networks.

Vadym Synegin, co-founder of IT and crypto solutions provider Tecor, told Cointelegraph that cryptocurrencies have unique advantages in a situation where the centralization of traditional systems increases the risk of disrupted transfers. Told.

“Crypto markets remain more or less decentralized, as most markets are controlled by centralized powers who can easily yield under political tensions, leading to operational efficiencies during periods of crisis. “It means that we will be even better,” he said.

So what other aspects of crypto have the conflict between Russia and Ukraine revealed?

Crypto Donation for Humanitarian Aid

The conflict between Russia and Ukraine shows that cryptocurrencies can be used to finance military conflicts.Notably, the Ukrainian government Started accepting donations in virtual currency Earlier this year to increase donor inclusiveness create of the Ukrainian Crypto Fund.

The country’s Ministry of Digital Transformation is now in charge of the fund, which was established jointly with Kuna, FTX and Everstake. Strengthen Humanitarian Aid and Military Programs in UkraineThe project allowed the Ukrainian government to: enhance Over $100 million in cryptocurrency donations to date.

That said, some pro-Ukrainian crypto-funding groups are eyeing new crypto instruments such as: Decentralized Autonomous Organization (DAO) To raise money for the country.

The most prominent of the many Ukrainian DAOs are Created in February for the sole purpose of providing financial assistance to Ukrainian soldiers.co-founder of the project include Russian critic Nadia Tolokonnikova, who is also a founding member of the Pussy Riot feminist protest group. Other founding members of her UkraineDAO include PleasrDAO and Trippy Labs, a generative NFT studio.in the project Raised Over $8 million to date.

One of the Ukrainian DAO’s most notable successes was the recent sale of Ukrainian Flag Non-Fungible Tokens (NFTs). Earn just over $6 million ether (ethereum). It currently ranks among the top 20 most expensive NFTs of all time.

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Cointelegraph had the opportunity to speak with Koii Network co-founder Kayla Kroot about the current use of cryptocurrencies in the Ukrainian context. Her company is involved in developing new blockchain models, including Web3.

According to executives, cryptocurrencies have allowed war-torn citizens to maintain access to money during these difficult times.

“Cryptocurrencies were developed to help global citizens stay in control of their money.”

Croot also noted the increasing use of digital coins by humanitarian organizations operating in the country. “Organizations such as World Central Kitchen conducted crowdfunding campaigns. In the case of WCK, this included accepting donations in ETH. , money is now more easily accessible to those who need it most,” she added.

Scammers take advantage of Service-to-Other

Cryptocurrency donations have helped advance Ukrainian causes, but some malicious entities have undermined the noble efforts of the Service-to-Other.

Some scammer syndicates are trying to trick donors by posing as representatives of licensed crypto exchanges involved in Ukrainian fundraising activities. Cybersecurity experts estimate that millions of fraudulent emails have been sent employing this tactic so far.

Some of the emails contain messages of distress from cybercriminals claiming to be Ukrainians who are in dire need of financial assistance.

An influx of such messages undermines the cause of helping Ukrainians by making it harder for real victims to get the help they need.

There have also been reports of fraudulent messages being circulated on social media platforms. At this point, it is important to note that well-wishers should only donate crypto through official channels of the Ukrainian government to avoid possible fraud.

In addition to the deceptive posts appearing on social media, deceptive messages asking for crypto have also appeared on the dark web.

The Dark Web is an overlay Internet network made up of unindexed websites that are invisible to standard browsers and search engines and can only be accessed using specialized browsers.

The dark web is intentionally hidden from regular users for good reasons.It hides all kinds of illegal activities, including the black market for illegal drugs and guns. Blackhats also use the dark web to sell stolen personal credentials.

So it should come as little surprise that scammers are spreading fake messages on the dark web to defraud money from Ukrainian supporters. Many of the messages have been found to contain links to phishing sites designed to steal cryptography.

A study of McAfee schemes found that some websites used fake chat boxes to simulate user activity, while others used mock-up donation verification tools to make it appear more authentic. to

Early Russo-Ukrainian War, More Sophisticated Fraud Groups tried Conducting fraudulent fundraising activities using Peaceful World (WORLD) tokens. This was after the Ukrainian government announced the airdrop. then canceled.

Scammers launched fake airdrops hours before the government scrapped the move in favor of NFTs. It prevented the scheme before it happened.

Governments can restrict crypto

Satoshi Nakamoto, pseudonymous creator of Bitcoin (Bitcoin) developed the first cryptocurrency to delegate control of money from governments and centralized financial institutions.

However, the conflict between Russia and Ukraine has shown that regional blocs and major jurisdictions may ban and control cryptocurrencies.

In October, the European Commission announced drastic measures. Sanctions Targeting Russian Crypto Asset Storage Wallets It is under the control of European companies and exchanges. Additionally, EU blockchain companies were banned from providing crypto custody services to Russian entities.

The new law was enacted in response to Russia’s invasion of Ukraine to prevent Russia from evading sanctions.

previous limit Set trading and deposit limits Up to €10,000 for Russian crypto wallets and accounts.

Recent EU crypto legislation has forced some major exchanges with operations in Europe, such as Binance and Coinbase, to limit their services to Russian individuals and businesses to avoid regulatory clashes. was forced to

Other regulated crypto exchanges such as Kraken, Crypto.com, Blockchain.com also have Stopped providing cryptographic services As a result, to Russian citizens.

On the other hand, the Russian authorities have banned a series of virtual currency wallets, Closure of major Russian banks From the SWIFT money transfer system. The ban on these systems effectively shut states out of major international financial markets.

In July the Kremlin Prohibit the use of cryptocurrencies to make payments; However, the Russian government has recently changed its tune. In September, the Central Bank of Russia and the Ministry of Finance Allow use of cryptocurrencies For cross-border payments.

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The move was meant to encourage the use of local crypto exchanges amid heightened geopolitical tensions and limited options for many Russians.

The Russian-Ukrainian conflict shows the use of crypto in the setting of community initiatives for the common good. The Ukrainian government has raised millions of dollars in direct donations of cryptocurrencies, but some digital Currency financing was ruined by fraudsters trying to profit from the war.

As use cases emerge in more diverse environments, more cryptographic advantages and limitations may emerge.