Ukraine is turning to online crypto crowdfunding to fund its fight against Russia

Russia has stunned the world with the speed of its advance through Ukraine this week. Part of the reason it’s overwhelmed its neighbor so quickly, beyond the shock timing, is the vast imbalance between the two countries’ military resources. At $6 billion, Ukraine’s defense budget is just 10% of Russia’s, according to the Stockholm International Peace Research Institute. 

Desperate to raise cash, and quickly, Ukrainians are resorting to crowdfunding for military equipment. GoFundMe is full of pages that purport to be raising money for Ukrainians in need, and the website of the Ukrainian foundation Come Back Alive, a nonprofit charity benefiting the country’s military, has raised a staggering $4 million in cryptocurrencies as of Friday, with a single anonymous donation clocking in at $3 million. 

Military-focused crowdfunding efforts are not a new phenomenon for Ukraine. Nor is using cryptocurrency for the purpose. In 2014, when Russia annexed Crimea, crowdfunding funneled funds to the country’s army and wider armed resistance, buying medical equipment and military supplies. Civilians have signed up to fight alongside the country’s military with government-provided weapons.

Today, the Come Back Alive Foundation is one of the largest, most prominent groups assisting Ukrainian forces. It was founded in 2014 by Vitaliy Deynega, a Kyiv-based volunteer who began to raise money and supply bulletproof vests to soldiers fighting in the Donbas region of Ukraine immediately after Russia annexed Crimea. Deynega wrote “Come Back Alive” on each vest, inspiring the name of his group. Its efforts have been promoted by the Ukrainian government, which has called Come Back Alive “Ukraine’s main charity fund.” Potential donors have also been directed to the National Bank of Ukraine’s “special account” through American and British Chase Bank accounts. 

But on Thursday, the foundation encountered a major setback: one of its primary sources of international funding, the crowdfunding platform Patreon, kicked it off. It remained offline as of 1 p.m. US Eastern time on Friday, February 25. 

A Patreon spokesperson cited the company’s policy on “harmful and illegal activities” to justify the move, saying: “Patreon does not allow any campaigns involved in violence or purchasing of military equipment, regardless of their cause. We have suspended the campaign in question while we investigate.”

The backlash from Ukrainians was swift. Critics accused the platform of cutting off a crucial lifeline for self-defense against Russia and questioned why it had made the decision now, given that the page had been online for years. 

Patreon has become the go-to source for crowdfunding in this conflict; other established Ukrainian organizations like the English-language media outlet the Kyiv Independent also raise funds on the platform. Thus far, GoFundMe has not released any statements on the Ukrainian crowdfunding that’s taking place on its platform.

Such platforms hold tremendous power for their ability to help people raise and move vast sums of cash. But one problem they face is that, especially in the fog of war, it isn’t always clear who is giving and receiving money. There are already countless Ukraine-related scams floating around the internet. To offer an example, one Twitter account was previously used for gambling. Now it’s sharing Bitcoin links and claims to be raising money to help fund the fight against Russia. 

Source From technologyreview
Author: Tanya Basu