Just days before the Russian invasion of Ukraine, thousands of people in Canada joined a truckers’ protest movement called the “freedom convoy” to oppose government health measures.
To support the protest movement organizers launched a fundraising campaign on the GoFundMe platform. However, the social funding platform seized the approximately $10 million in donations that were raised, alleging that the movement failed to both prohibit the promotion of violence and harassment and adhere to sanctions Canadian authorities had imposed.
Organizers responded quickly by turning to the world of cryptocurrency to evade seizures and continue funding their movement. They raised nearly $1 million in a matter of days.
This Canadian story is a perfect example of how cryptocurrency can play a dual role of social support, but can also be used to evade sanctions.
At the same time, in Ukraine the Kyiv government has shown enthusiasm about using cryptocurrency, which has enabled the country to get significant financial support for its defence extremely quickly.
Our work examining the digital transformation of the accounting profession has led us to delve into the world of cryptocurrency to explore how it operates and how it is regulated. As the armed conflict between Ukraine and Russia rages on, countries’ interest in regulating cryptocurrency has never been so urgent.
The conflict between Ukraine and Russia is not just a war of bombs and bullets. It is also a digital war of which cryptocurrency is just one of many components.
Ukraine’s Ministry of Digital Transformation is getting lots of press for the ingenious way it is supporting the country’s resistance to the Russian invasion. This is being done through a sophisticated use of social media to promote Ukrainian interests around the world at hackathons, where hackers are rewarded with US$100,000 for successfully attacking Russian systems.
Funds available quickly
After a Ukrainian government official tweeted that the country would now accept international aid via cryptocurrency, more than US$100 million was reportedly raised this way. Two funds were initially set up: one for humanitarian and the other for military purposes. However, as the violence escalated the funds were merged and directed entirely toward supporting the Ukrainian military, where there were used to purchase body armour, night vision goggles, helmets, medicine and food for frontline fighters.
The government has stated that although the amount received in cryptocurrency is modest with respect to the total funds granted from international agencies, it was able to receive these funds much more quickly because of the absence of intermediaries.
Bank transfers can, indeed, take several days to arrive in the Ukrainian government’s accounts. The cryptocurrency was deposited within a few minutes.
This demonstrates the undeniable usefulness of cryptocurrency — the way it presently operates and is regulated — in supporting, in particular, the financial and economic systems of countries in distress.
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