It’s been two weeks since Russia launched its first major military operation in Europe in the 21st century, the so-called “Special Operation” in Ukraine. The military conflict immediately caused devastating sanctions to be imposed on the Russian economy by the United States, the European Union and their allies and put the cryptocurrency industry in a very vulnerable and demanding position.

As the world watches closely, crypto space must establish itself as a mature, economically and politically responsible society, and it must challenge claims that it is a safe haven for war criminals and sanctioned authoritarian and oligarchic regimes. So far, things have gone relatively well. But despite assurances from industry leaders, some experts say the decentralized nature of cryptocurrencies could seriously undermine efforts.

Donation antecedent
By riding the wave of support for Ukraine from citizens, institutions, and governments around the world, the nation set a critical precedent. On February 26, the third day of the Russian military operation, the government of Ukraine announced that it would accept cryptocurrency donations. He made the announcement on Twitter, listing Bitcoin (BTC), Ether (ETH) and Tether (USDT) wallet addresses. It was an official endorsement of an earlier similar statement made by 31-year-old Deputy Prime Minister Mikhail Fedorov.

The idea that the stricken European country was officially accepting digital assets from those willing to lend a helping hand seemed so shocking that Vitalik Buterin initially questioned the veracity of the statement. But Tomica Tillman, a former senior adviser to two US secretaries of state, confirmed the governor’s health, citing the former Ukrainian ambassador. Kyiv Cryptocurrency Exchange Kona Exchange establishes and operates the donation infrastructure.

Analyst firm Elliptic calculated that these wallets, along with wallets from another Ukraine-related initiative called “Come Home,” have received $63 million in cryptocurrency as of March 9. The money came from more than 120,000 individual donations.

Among the donors is Polkadot founder Gavin Wood, who donated $5.8 million. Anonymous sender of the $1.86 million donation that “appears to come from NFT proceeds provided by Julian Assange and digital artist Buck”; and Chain.com CEO, Deepak Tablial, who donated nearly $290,000. However, the vast majority of donations come from ordinary people and are less than $100.

A separate initiative called UkraineDAO was launched early in the war by Nadezhda Tolokonnikova, a member of the Russian activist group Pussy Riot, along with Trippy of Trippy Labs and members of PleasrDAO. By raising ETH through PartyBid, UkraineDAO has been collecting donations from well-known tech individuals and organizations such as online subscription platform OnlyFans and Reddit co-founder Alexis Ohanian. By March 3, Ukraine had raised more than $6 million in the air.

While these numbers are a far cry from the amount of financial support the United States and the European Union is expected to send to Ukraine, which could amount to about $16 billion, they set a unique precedent for immediate, direct and horizontal support for a humanitarian cause — and is undoubtedly a manifestation of From the strength of the global crypto community.

Regulatory issues
In addition to widespread enthusiasm for immediate support from those in need, the conflict has reignited debate on an issue central to international regulation: the potential ability of cryptocurrencies to undermine economic sanctions such as those imposed by the global community on Russia. On March 2, at a House of Commons Finance Committee hearing, Acting California Representative Juan Varga questioned Gov. Jerome Powell if crypto could become a “way out” for financial transactions as Russia faces the prospect of a global SWIFT outage. Clear. Powell wasn’t very specific in his answer, but he used suspicious standard language:

The kind of rules that should not exist. […] What is needed is the structure – in particular ways to prevent these unbacked cryptocurrencies from serving as a vehicle for financing terrorism, just general criminal behavior, tax evasion and the like. . ”
At the same time, a group of senators, including some critics of the digital finance industry, such as Elizabeth Warren and Sherrod Brown, sent a letter of concern to Treasury Secretary Janet Yellen. Citing the examples of North Korea and Iran, the authors shared concerns that cryptocurrencies could be used to facilitate cross-border transactions to circumvent new sanctions.

Source: CoinTelegraph

LEAVE A REPLY