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Crypto and blockchain are being used in unprecedented ways in the Russia-Ukraine war

Crypto and blockchain are being used in unprecedented ways in the Russia-Ukraine war
Written by publisher team

The war in Ukraine is the first major conflict of the crypto era, and, as it happens, Ukraine itself is a cryptocurrency capital.

What was a tool of economic growth in peacetime has now, with war, become another weapon in the fight.

Millions donated to the Ukrainian war effort through anonymous bitcoin donations have been spent on thermal images, drones and other military equipment needed for the Ukrainian army.

Charity and relief efforts are being contributed through decentralized autonomous organizations (known as DAOs — more on them later) that also link volunteers around the world with the people in need.

The government department that had been in charge of attracting crypto industries is now tasked with keeping the country online, warning citizens of air raids and missiles, fighting Russian disinformation, coordinating with Google and Facebook, and leading an army of hackers targeting websites and other services within Russia itself.

Meanwhile, crypto has become another front in the war, with Ukraine concerned Russia may use decentralised digital money to get around the recently imposed financial sanctions.

A crowd holding banners displaying the Ukraine flag
War has shown crypto can be used for more than “stupid games on the internet”, advocates say.(Getty: Michael Regan)

For some, crypto and blockchain are finally showing what they can do — how they can be used for good rather than for NFTs of cartoon apes.

So what effect is crypto having on the war?

From webmaster to wartime hacker

The story of LDV, who wishes to remain anonymous, is an example of the way Ukraine’s tech industry, centerd around crypto, has pivoted to war.

A man in white hoody holding a blue Ukraine passport.
LDV provided this photo of himself with a Ukranian passport.(Supplied: LDV)

A webmaster for an investment fund based on crypto-mining, LDV woke up to the news of the invasion on February 24 and tried to flee to Poland from his home in Lviv, in western Ukraine.

“We wanted to withdraw money but the queues were extremely long. If I had waited, I couldn’t cross the border eventually,” he said.

He tried to buy a bus ticket over the border but the transaction was declined, either due to cyber attacks taking the bank offline, or because the Ukranian bank was blocking international transactions.

Finally, he said, he found a friend who was willing to exchange bitcoin for Polish cash, which he used to buy the bus ticket.

Now in Poland, he’s working as a hacker in the war effort.

“I’m preventing Russian propaganda with an electronic cyberwarfare team I joined recently — kind of [like the] Anonymous hacking team,” he said.

How much has been raised through crypto donations?

Ukraine’s “IT Army” is being coordinated by Alex Bornyakov, the Ukrainian deputy minister for digital transformation, who just two weeks ago was addressing a conference in Denver, US, about the country’s long-term goal of becoming “the largest crypto-friendly country” in the world.”

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