Bookmark this page for regular updates on cryptocurrency’s role in the Russia-Ukraine war.

Pre-war Buildup Timeline

10th NOVEMBER 2021

The US reports a strange movement and assembly of Russian troops on the Ukraine border.

28th NOVEMBER 2021

Ukraine estimates that 92,000 Russian soldiers are on the other side of the border.

7th DECEMBER 2021

US President Joe Biden warns Putin of “Strong economic and other measures” if an attack takes place.

17th DECEMBER 2021

Putin makes peace proposals regarding the prohibition of Ukraine from joining NATO. The proposals are swiftly rejected. 

17th JANUARY 2022

Belarus welcomes thousands of Russian troops for ‘military exercises’ in the border regions with Ukraine.

19th JANUARY 2022

Suspecting an imminent attack, the US sends $200m to Ukraine in security aid.

24th JANUARY 2022

NATO troops are put on standby, ready for warfare.

25th JANUARY 2022

6,000 Russian troops and 60 jets perform exercises along the Ukraine border in Crimea.

10th FEBRUARY 2022

Ten days of military maneuvers begin in Russia and Belarus.

17th FEBRUARY 2022

Fighting escalates in the separatist regions of Eastern Ukraine – Donetsk and Luhansk.

21st FEBRUARY 2022

Putin recognizes Donetsk and Luhansk as independent breakaway states, leading to the first round of NATO sanctions.

24th FEBRUARY 2022

Putin sends his troops into Ukraine for ‘Special Military Exercises.’ Despite being the aggressor, he claims “all responsibility for possible bloodshed will be entirely on the conscience of the regime ruling on the territory of Ukraine.” 

War begins. 

Crypto Timeline of Russia-Ukraine War

27th FEBRUARY 2022

Binance Charity Announces $10 Million Support for Ukrainians

The official Binance Twitter account announces the intent to make a difference in the lives of Ukrainians with a charitable donation.

Binance donates $10 million to help the people of Ukraine.

The Binance Charity website stated, “In response to this crisis, we are donating $10 million to major Intergovernmental Organizations and local NGOs on the ground to help provide emergency relief to refugees and children to support logistics on the ground such as food, fuel and supplies for refugees in countries bordering with Ukraine and more.”

Binance Charity Solutions for Ukraine

Binance has a clear plan to allocate the $10,000,000 donation, working with experienced strategic partners within Ukraine.

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1. Protect the Children

Binance Charity has a partnership with UNICEF (the United Nations International Children’s Emergency Fund). The donation will help protect the welfare of 7.5 million Ukrainian children with funds distributed towards:

  • Medical supplies
  • Safe drinking water
  • Social protection
  • Emergency educational resources

2. Support Refugees

Binance is partnering with UNHCR (The UN Refugee Fund) to provide:

  • Food & water
  • Medical supplies
  • Improved living conditions in the temporary shelters

3. Protect the IDP

The International Rescue Committee reports over 100,000 IDPs (Internally Displaced People) within Ukraine. They cannot leave their country, and they are most at risk from the dangers of the war. Working with the UNHCR, an organization established in Ukraine in 2014, emergency resources are available to IDPs and people who have fled in fear for their lives.

At this date, 279.75 BTC has been donated to Ukraine.

3rd MARCH 2022

Hillary Clinton Criticizes Crypto Exchanges Refusal to Ban Russian Users

Jesse Powell, CEO of Kraken cryptocurrency exchange, responds to former first lady Hillary Clinton saying she is “disappointed” that some cryptocurrency exchanges still provide services to Russians.

Jesse Powell comments on Hillary Clinton's disappointment in some crypto exchanges not banning Russia.

In Jesse Powell’s Twitter account, he started a thread discussing Hillary Clinton’s opinion on “so-called crypto exchanges” (So called? Aren’t they actual crypto exchanges?) supporting Russian users. Jesse said, “Sounds like the line is NATO countries. I can accept that. I’ve heard people say the line is just any physical confrontation, which didn’t make sense. So, we are willing to risk nukes if a NATO country is attacked, and we’re willing to risk nukes as retaliation for sanctions.”

“Seriously tho, where is the line? If US doesn’t physically intervene on Ukraine, when does it intervene? Sounds like the argument is that as long as nukes are on the table, you can’t have a physical confrontation? Is physical worse than economic? What’s this mean for Taiwan?”

Hillary Clinton’s view is that “everybody should do as much as possible” to isolate the Russian economic activity. “That pressure will absolutely impact Putin. I think the Treasury Department, I think the Europeans should look at how they can prevent the crypto markets from giving an escape hatch to Russia.”

The exchange will remain accessible to its Russian clients unless it becomes a legal requirement to ban Russian users from their accounts with the Kraken exchange.

4th MARCH 2022

CEO of Coinbase Expresses his Reasoning for Not Banning Russian Users 

Today, Brian Armstrong, CEO of Coinbase, one of the world’s largest cryptocurrency exchanges, opened up a Twitter thread.

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He said, “Every US company has to follow the law – it doesn’t matter if your company handles dollars, crypto, gold, real estate, or even nonfinancial assets. Sanctions laws apply to all US people and businesses.”

“So it would be a mistake to think crypto businesses like Coinbase won’t follow the law. Of course, we will. This is why we screen people who sign up for our services against global watchlists and block transactions from IP addresses that might belong to sanctioned individuals or entities, just like any other regulated financial services business.”

“That being said, we don’t think there’s a high risk of Russian oligarchs using crypto to avoid sanctions. Because it is an open ledger, trying to sneak lots of money through crypto would be more traceable than using U.S. dollars cash, art, gold, or other assets.”

“Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too. That said, if the US government decides to impose a ban, we will, of course, follow those laws.”

“Sanctions are a complex issue, and the situation is changing fast, so we’ll keep working with law enforcement and governments and will take more steps as needed. We’ll also keep working to enable crypto services for the people of Ukraine who are in need of help.”

CEO of Binance Backs Up The Decision Not to Freeze Russian User Accounts

Binance: Ukraine, Russia, Sanctions, and Crypto

Today, Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, made a statement on the company blog. 

Referring to the decision not to freeze Russian users’ accounts, he said, “Binance is not applying sanctions? This cannot be further from the truth. Binance follows international sanction rules strictly. At Binance, we have assembled a dedicated global compliance task force, including world-renowned sanctions and law enforcement experts, such as Tigran Gambaryan, Matt Price, Nils Andersen-Röed, and more recently Chagri Poyraz. They work tirelessly to enforce sanction rules.”

“Banks apply sanctions, but Binance doesn’t.” Again, nothing can be further from the truth; Binance applies the same sanctions rules as the banks, according to international standards.”

Changpeng stated that Binance doesn’t have the authority to freeze Russian accounts and believes sanction decisions are the responsibility of senior levels of government. As he rightly says, some Russians live in London and New York. Should a bank CEO in those locations have the power to freeze their accounts?

Changpeng said, “On what grounds? Just because they don’t agree with the President of their country? What happens if they also do not agree with another head of state in another country? Should they have the power to freeze all assets of citizens of that other country too? Where does this stop? For this reason, it is our understanding that we must follow international sanction lists and not make up our own.”

Changpeng reiterated that Binance takes sanctions seriously and, to that end, has a team of over 500 people across the globe “directly involved in sanctions control work such as anti-money laundering, name screening, Know Your Customer onboarding and on-chain monitoring.”

Binance has clear standard operating procedures for identifying potential transactions related to sanctions. He said, “There is not a crypto-team in the world with this level of expertise.”

Changpeng stated that most newly sanctioned individuals are flagged as politically exposed people (PEP) before onboarding to the Binance platform and are subsequently denied access. Binance is one of the few exchanges in the crypto industry that “implements mandatory KYC as part of its onboarding process.”

In the article, Changpeng states that Binance uses sophisticated on-chain monitoring tools such as Chainalysis Elliptic, TRM, and Ciphertrace to identify possible illicit funding.

When asked if he believed Binance should block crypto to all Russians unilaterally, Changpeng replied, “Let me ask this another way. Should a coffee shop in Paris refuse to serve a Russian customer? Or take their wallet while they’re at it?”

“The answer to that is no. We are not going to unilaterally freeze millions of innocent users’ accounts.”

Changpeng concluded the article by saying that Binance would aggressively apply sanctions only if the government introduced them legally.

His final sentence ended the discussion, “We also have formal and informal joint task force teams with multiple governments and regulatory agencies around the world, providing consulting on the best practices going forward. We are always happy to work with any government who wishes to work with us.”

6th MARCH 2022

Jesse Powell of Kraken cryptocurrency exchange expresses his opinion on blocking trade with the Russians.

Jesse Powell on Twitter: Blocking trade with Russians is bad.

9th MARCH 2022

Kraken to Distribute $10 Million in Aid to Ukrainian Clients

Kraken will distribute over $10 million worth of aid to clients in Ukraine.

Today, on Twitter and a blog post, one of the top cryptocurrency exchanges, Kraken, announced the intention to directly distribute over $10 million of aid to support their clients in Ukraine.

Starting from 10th March and running until 1st July, any Kraken clients who opened an account with Kraken before 9th March 2022 will receive $1,000 BTC (Bitcoin). The recipients can withdraw the deposit immediately, and Kraken has waived transaction fees for this period.

On the blog announcement, Jesse Powell, Kraken CEO, said, “We hope to continue being able to provide critical financial services in a time of need to both our clients in Ukraine and in Russia,” said Jesse Powell, CEO of Kraken. “Cryptocurrency remains an important humanitarian tool, especially at a time when many around the world can no longer rely on traditional banks and custodians.”

Kraken will “also donate an amount equivalent to the total trading fees paid by Russia-based clients in the first half of 2022 to the aid package.” – Kraken website. As the crisis unfolds, Kraken may contribute further aid if required.

This generous charitable aid presents Kraken’s first international aid distribution.

“It also represents our continuing effort to align our business with the values of the cryptocurrency community and its firm belief that all global citizens should have access to financial services. This includes our clients in Russia, who may be actively trying to protest the ongoing conflict.” – Kraken website.

Kraken expressed a commitment to make sure its clients are not “disenfranchised by the actions of their representatives and leaders.”

The Kraken blog post outlines that a compliance team of 600 is monitoring the situation, responding to governing authorities’ requests in the affected regions, and ensuring that Kraken abides by relevant sanction requirements.

The Distribution of Kraken’s $10 million Aid For Ukrainian Clients

Jesse Powell on Twitter: there are many benefits to sending direct aid to the people of Ukraine.

Tranche 1 – Drop date: 10th March 2022

Tranche 1 Qualification Requirements:

  • Account created in Ukraine before 9th March 2022
  • Intermediate’ or ‘Pro-level verification as of 9th March 2022
  • The account held a balance at any time
  • To claim the drop, the account holder must log in by 1st May 2022

Tranche 1 Distribution to qualified accounts:

  • $1000 worth of $BTC – can be withdrawn immediately
  • $1000 worth of Kraken Fee Credits (KFEE) to offset future currency conversion fees

Kraken blog note: The BTC amount distributed in Tranche 1 is roughly equivalent to the total fees paid to Kraken by Ukraine residents since 2013.

Tranche 2 – Drop date: 1st April 2022

Tranche 2 Qualification Requirements:

  • Account created in Ukraine before 9th March 2022
  •  Intermediate’ or ‘Pro-level verification as of 9th March 2022
  • To claim the drop, the account holder must log in by 1st May 2022
  •  Did not receive Tranche 1

The delay in distribution time allows Ukrainian residents to complete the ‘Intermediate’ verification level process. There is no requirement to have held a balance to receive Tranche 2.

Tranche 2 Distribution to qualified accounts:

  • $<TBD> worth of $BTC – can be withdrawn immediately
  • $500 of Kraken Fee Credits (KFEE) to offset future currency conversion fees

<TBD> amount of US dollar equivalent of $BTC distributed in Tranche 2 will be equal to Quarter 1 (2022) fees collected from Russian account holders and divided by the qualifying Ukrainian accounts

The USD-equivalent amount of bitcoin to be distributed in Tranche 2 will equal the 2022 Q1 fees collected from Russia-based accounts, divided by the number of qualifying Ukraine accounts.

Kraken blog example:If Kraken clients in Russia pay $5 million in fees in Q1 and there are 10,000 qualifying accounts in Tranche 2, each account will receive $500 worth of BTC.”

Tranche 3 – Drop date: Numerous throughout Q2 2022. TBD

 Tranche 3 Qualification Requirements:

  • Account created in Ukraine before 9th March 2022
  • Intermediate’ or ‘Pro-level verification
  • To claim the drop, the account holder must log in by 1st August 2022

Tranche 3 Distribution to qualified accounts:

  • $<TBD> USD worth of $BTC, – can be withdrawn immediately
  • <TBD> = The same as Tranche 2, except it will use Q2 2022 fees collected from Russia-based accounts

The White House Fact Sheet:

President Biden to Sign Executive Order on Ensuring Responsible Development of Digital Assets

President Biden's executive order on ensuring responsible development of digital assets.

Today, the White House released a statement announcing, “President Biden to Sign Executive Order on Ensuring Responsible Development of Digital Assets.”

The document “Outlines First Whole-of-Government Strategy to Protect Consumers, Financial Stability, National Security, and Address Climate Risks.”

The White House document acknowledges the opportunities from the explosion of digital assets, highlighting the below data on the statement:

  • Around 16% of adult Americans – approximately 40 million people – have invested in, traded, or used cryptocurrencies
  • Over 100 countries are exploring the option of CBDCs, (Central Bank Digital Currencies), a digital form of a country’s sovereign currency

The White House statement reiterates the need for consumer protection, national security, financial stability, and climate risks. The United States wants to play a leading role in engagement and “the global governance of digital assets consistent with democratic values and U.S. global competitiveness.”

The cynics might say that the United States wants to leverage control over digital assets, and CBDCs aren’t strictly a decentralized currency. However, today President Joe Biden will sign an Executive Order that outlines a “whole-of-government” approach to risk assessment and utilizing the many benefits of digital assets and the underlying technology.

The Executive Order outlines a national policy across six key priorities: –

  • Consumer & Investor protection
  • Financial stability
  • Illicit finance
  • U.S. leadership in the global financial system and economic competitiveness
  • Financial inclusion
  • Responsible innovation

The Order is a little challenging to decipher the “White House speak” into human speak, but the premise is as follows: –

1.     Protect U.S. Consumers, Investors, and Businesses –  the Department of Treasury (and others) to monitor the direction of the digital asset sector and create policy recommendations to cope with the crypto explosion, and observe how investors and businesses may change because of the economic implications. Regulators must “ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.”

2.     Protect the U.S. and Global Financial Stability & Mitigate Systemic Risk – the Financial Stability Oversight Council (who knew?) looks out for potential economic risks and develops policy recommendations to fill any regulatory gaps.

3.     Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets – basically risk management, with relevant agencies working with allies and partners assessing potential risks to the economy. It doesn’t specify risks from digital assets. Still, we’re assuming that’s what they meant.

4.     Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System – The Department of Commerce creates leadership in and leverages digital assets and integrates learning into policies, research, and development, described as “operational approaches to digital assets” (Control?).

5.     Promote Equitable Access to Safe and Affordable Financial Services – keep consumers safe. The Treasury to produce a report on “the future of money and payment systems, to include implications for economic growth, financial growth and inclusion, national security, and the extent to which technological innovation may influence that future.”

6.     Support Technological Advances and Ensure Responsible Development and Use of Digital Assets – watching what happens in blockchain technology and digital asset systems, ensuring no risks, and “prioritizing “privacy, security, combating illicit exploitation, and reducing negative climate impacts.”

7.     Explore a U.S. Central Bank Digital Currency (CBDC) – The U.S. Government to assess the need for a CBDC and the Federal Reserve to continue research and development for a U.S CDBC as long as “it is consistent with U.S. priorities and democratic values.”

As Coinbase’s Chief Policy Officer Faryar Shirzad said, it is heartening to see the U.S. Government acknowledging the potential of digital assets. With the backing of President Joe Biden, it demonstrates a recognition that digital assets have a place in our financial future.

10th MARCH 2022

Will The Increasing Financial Restrictions Affect Russian Users On Crypto Exchanges?

Today, cryptocurrency exchanges, Binance, Coinbase, Kraken, and KuCoin, hold onto the crypto industry’s libertarian values of providing greater financial freedom for everyone across the globe.

With each day, it becomes more challenging for Russian users to access the full range of services provided by the global crypto exchanges. Mastercard and Visa have banned using Russian debit and credit cards outside of Russia, and Russian businesses cannot accept card payments from outside the country.

Russians are also barred from using SWIFT payments, an international banking system available on many cryptocurrency exchanges. The U.S Treasury has contacted several cryptocurrency exchanges to establish a line of communication regarding expectations on sanctions compliance.

Charles Delingpole is the CEO of ComplyAdvantage an anti-money laundering business working with several of the leading cryptocurrency exchanges, including Binance, who are upholding access to Russian account holders and supporting the Ukrainians with a $10 million charitable donation.

On compliance, Charles Delingpole said, “For many exchanges, the risk of not complying with the rules as they stand is “existential Not only in terms of being fined (and) having dollar clearing access removed … If you’re laundering money, which is the flip side of this, there’s been huge backlash from the public for companies seen to be facilitating illegal flows of money.”

11th MARCH 2022

The U.S Justice Department has created a Task Force to Identify and Prosecute Sanctioned Russian Individuals and Entities

US justice department task force russia cryptocurrencies

According to a Bloomberg report, the U.S. Justice Department’s new task force of agents, prosecutors, translators, and analysts is to identify and prosecute any people or institutions, including cryptocurrency exchanges, believed to be aiding Russians to hide their assets from sanctions. U.S lawmakers are concerned that entities and individuals can use cryptocurrencies to evade economic sanctions

The White House and G7 group of nations stated they would be issuing new guidelines regarding the use of cryptocurrencies to evade U.S. sanctions against Russia.

Ukraine Vice Prime Minister Mykhailo Fedorov Appeals to Tether to stop Dealings with Russians

Vice Prime Minister Mykhailo Federov’s tweeted to the stablecoin issuer Tether to cease transactions with Russia. Tether’s Chief Technology Officer Paolo Ardoino did not respond directly to the Vice president but made a statement to CoinDesk. He said, “Tether conducts constant market monitoring to ensure that there are no irregular movements or measures that might be in contravention of international sanctions.”

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“Tether conducts constant market monitoring to ensure that there are no irregular movements or measures that might be in contravention of international sanctions.”

Tether isn’t the only crypto company to decline to stop doing business with all Russians. Most major crypto exchanges, including Coinbase Global Inc. and Kraken, have said that while they’ll abide by sanctions imposed on Russian oligarchs, cutting off Russian users goes against the spirit of what crypto — supposed to be free of government interference — is all about.”

14th MARCH 2022

Binance Charity Update on Ukraine Support

binance charity fund russia ukraine war

Two weeks after pledging a $10 million charitable commitment, Binance Charity continues to do great work helping refugees in Ukraine. The official Binance Twitter account announced the set up of a crowdfunding site “Ukraine Emergency Relief Fund” in a quest to raise further funds to aid the Ukrainian people.

Appealing to the crypto community, Binance Charity has proposed a $20 million crowdfunding target. The Binance blog post states, “Our entire Binance community has rallied around this cause, we’ve even had people offering their homes to displaced people. The response has been truly humbling, with over $500,000 USD already raised.”

Binance Charity confirms the allocation of funds to essential organizations: –

$2.5 million to UNICEF (The United Nations International Children’s Emergency Fund – to help families and children forced to flee Ukraine. Assistance with critical supplies, child protection, psychosocial support, and resources for emergency education.

$2.5 million to UNHCR (The United Nations High Commissioner for Refugees) -Providing humanitarian support, emergency shelter, social assistance, and legal support.

$1 million to PIN (People in Need) – Support for Slovakian refugees and “those displaced in Ukraine.” Funds contribute towards: –

  • Food
  • Water, sanitation, and hygiene
  • Food aid
  • Psychosocial support
  • Shelters
  • Cash assistance
  • Coordinating border crossings
  • QR codes for newly arrived people

$500K to iSans (immigration support): –

  • Temporary housing and resettlement for Ukrainian refugees entering Poland
  • Meals
  • Heating
  • Assistance with transportation costs
  • Legal support
  • Psychological support

$250,000 to Rotary Kyiv – in-country support for displaced Ukrainians: –

  • Sleeping bags
  • Blankets
  • Mattresses
  • Food supplies
  •  First aid kits

The Binance blog states “As we continue to raise funds the amounts donated to the above organizations are under regular review in consideration of receiving more. As the situation is changing daily, we are talking to a huge number of actors with a direct line to understanding the developments, this ensures our donations are always going to organizations dealing with the most urgent immediate needs.”

“We are in the final stages of confirming donations with Save the Children, Mercy Corps and Red Cross.”

17th MARCH 2022

Ukraine’s President Zelenskyy signs a virtual assets bill into law, legalizing Crypto

russia ukraine war zelenskyy digital assets crypto companies

The Ukrainian President has signed a new bill legalizing cryptocurrency. This bill signifies a positive move for cryptocurrency exchanges and for the continuation of ongoing support from cryptocurrency donations for the Ukrainian cause.

To date, crypto donations to Ukraine have exceeded $100 million, aiding the support of the people of Ukraine. President Volodymyr Zelenskyy’s new bill legalizes virtual assets.

The new law outlines: –

  • Legal status
  • Classification
  • Ownership
  • Virtual asset regulators

The Ministry of Digital Transformation said in a statement on 16th March 2022, that the law also establishes registration requirements for crypto service providers and will provide a framework for legislation.

Ukraine’s National Commission on Securities and the Stock Market will regulate the bill. The digital ministry said that the legislation means that crypto exchanges can operate legally and “banks will open accounts for them.”

A government announcement said that the task is to shape and pursue a policy “in the field of virtual assets; determining the order of circulation of virtual assets; issuing permits to virtual asset service providers; and carrying out supervision and financial monitoring in this area”

The Signed Law: –

  • Determines the legal status, classification, and ownership of virtual assets
  • Determines market regulators – the National Bank of Ukraine and the National Commission on Securities and Stock Market
  • Creates conditions for further formation of the legal field in the market of virtual assets
  • Determines the list of providers of virtual assets and conditions of their registration
  • Provides for the implementation of financial monitoring measures in the field of virtual assets.

The National Commission on Securities and Stock Market will: –

  • Form and implement state policy in the field of virtual assets
  • Determine the order of turnover of virtual assets
  • Issue permits to virtual asset service providers
  • Regulate, supervise and financially monitor this area.

Polychain Monsters Raffles a Unidragon to Support Binance Charity’s Humanity First Ukrainian Relief Fund

Polychain Monsters is a popular, collectable, and gaming ecosystem with animated cross-chain NFTs, including ultra-rare collectables.

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The company is hosting a raffle to support Binance’s Charity Humanity First Ukrainian Relief Fund. The prize is a Ukrainian-themed Unidragon. Raffle tickets cost 0.01 $BNB for a chance to win the special Polychain monster.

The colorful Unidragon stands in front of the Ukrainian city of Kyiv. The Unidragon does not have a collector score as Polychain Monsters want supporters to focus on helping Binance raise funds.

” Referred to in legends as the unfaltering defender of Kyiv, the Ukrainian Unidragon is a stalwart protector of peace and sovereignty. Strong-willed and passionate, no amount of adversity can break its illustrious spirit.”- Polychain Monsters Blog

Everyone participating in the raffle receives a Ukrainian Unidonkey, limited to one per wallet, and it does not have a collector score.

“Hailing from the beautiful city of Kyiv, the Ukrainian Unidonkey has devoted its life to ensuring harmony and liberty for all. Adorned in the blue and yellow colors of its motherland, it acts as a shining symbol for all who support peace and unity in the world.” Polychain Monsters blog.

The raffle takes place from Thursday 17th March and ends at 5 pm UTC on 24th March 

Broke Russian Banks Turn to Digital Assets for a Financial Boost

The ongoing sanctions caused the collapse of the Russian Ruble and continue to impact Russia’s finances. The central bank (CBR) has issued a license to Russia’s largest lender, Sberbank. The bank can now issue DFAs to its clients, which means that Russian companies can now mint digital assets to reactivate their dormant funds.

A Sberbank spokesman said,  “We are just starting our work with digital assets, realizing that further development requires adaptation of the current regulatory framework. To do that, we are ready to work closely with the regulator and executive bodies.”

“Companies will be able to make their first transaction on our blockchain platform one month from now. We are just starting our work with digital assets, realizing that further development requires adaptation of the current regulatory framework. To do that, we are ready to work closely with the regulator and executive bodies.” – Sergey Popov, director of the Transaction Business Division, Sberbank website

21st MARCH 2022

Ukraine is Developing a CBDC Amid the Armed Conflict with Russia

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Denelle Dixon, CEO of Stellar, revealed during an interview with CoinDesk that Ukraine is continuing with the development of its CBDC (central bank digital currency). This news comes despite the delays and challenges of the relevant people often unable to access offices because of the war with Russia.

Dixon said that development is “not as consistent as it once was” but that over a year, Ukrainian president Volodymyr Zelenskyy wanted to “move to a cashless society.”

During the interview, Dixon said that even though Ukraine is escalating cryptocurrency usage, the focus is on the Ukrainian Hryvnia rather than XLM. The development of the CBDC is to strengthen the Hryvnia rather than undermining it or replacing it with another currency.

Dixon also commented on the innovative decision of the Ukrainian government to accept cryptocurrency donations for humanitarian aid. In addition, Dixon said that Stellar is “talking to the administration about things that we can do to help with … humanitarian aid needs.”

In October 2021, Stellar introduced on-and-off ramps in conjunction with MoneyGram, a money transfer company that she felt could be applicable with Ukraine.

Last week, Ukraine signed a law to establish a legal framework for digital assets, which should help businesses manage cryptocurrency donations, among other benefits. 

22nd MARCH 2022

Are Wealthy Russians Using Crypto to Bypass Sanctions?

Christine lagarde president of european central bank

Christine LagardePhotographer: Andreas Arnold/Bloomberg

The U.S. and European Union recently announced an aim to limit Russia’s ability to do business in U.S dollars and other international currencies. Additionally, the ruling includes penalties on the country’s elite and the major banks. As a result, speculation about Russians using cryptocurrencies instead of fiat currency is rising.

Christine Lagarde, President of the European Central Bank, suggests that Russians could be attempting to bypass sanctions by converting rubles into stablecoins and cryptocurrency.

During a virtual event this week, Lagarde said, “When you see the volumes of rubles into stable, into cryptos, at the moment it is the highest level that we have seen since maybe 2021.”

“Crypto assets “are certainly being used, as we speak, as a way to try to circumvent the sanctions that have been decided by many countries around the world against Russia.”

According to Jonathan Levin, co-founder of blockchain-analytics firm Chainalysis, there was no evidence that Russians were using cryptocurrencies to evade sanctions. Amid speculation about wealthy Russians circumnavigating the financial system, Levin, and other industry experts, informed the U.S Senate Banking Committee that the crypto market is too small for any large-scale evasions of sanctions to go unnoticed.

Fabio Panetta, ECB Executive Board member, however, disagreed. He said that “crypto could represent a “major loophole” at the heart of the financial system.”

24th MARCH 2022

Russia is Open to Bitcoin payments for Energy Exports

bitcoin graphic

Western sanctions and frozen foreign currency reserves have brought the Russian International financial system to its knees, rendering the ruble practically worthless.

Russia is the world’s biggest exporter of natural gas and the second-largest oil supplier. Sanctions arising from the war have sent energy prices skyrocketing across the globe.

Pavel Zavalny, a top Russian energy official, said that the country is open to selling energy (oil and gas) to the west for Rubles, as well as the national currencies of friendly countries such as the Yuan, Lira, and Dinar, on top of gold, or Bitcoin. Zavalny, Russia’s Energy Committee of the State Duma, said that Payments in US Dollars or other fiat currencies are worthless. He said, “For us, this currency turns into candy wrappers. We have lost all interest in Euros and Dollars.”

Subsequently, the Chairman suggested that Russia starts accepting Bitcoin as payment for energy exports. He said, “We’ve been offering China to switch to transacting in national currencies, such as the Ruble and the Renminbi, for a while now. With Turkey, that would be the Lira and Ruble. Currency sets can be different; it’s a common practice. If it would be necessary to trade with Bitcoin, we’d do it.”

On 23rd March, Putin announced that Russia would start demanding Ruble payments for natural gas from “unfriendly countries.” He ordered the Russian central bank to develop a structure for the country to accept these types of payments and set a timescale of one week. Consequently, European natural gas prices rose by around 30%.

David Broadstock, a senior research fellow at Singapore’s Energy Studies Institute, says that “Russia is very quickly feeling the impact of unprecedented sanctions.” He added that Bitcoin is considered a high growth asset, but with massive price swings, accepting Bitcoin “introduces considerably more risk in the trade of natural gas.”

Additionally, China is one of Russia’s “friendly” trade partners, but cryptocurrency is banned in China, limiting possibilities for accepting Bitcoin payments.

25th MARCH 2022

Ukraine Launches a Virtual NFT War-themed History Museum

On 26th February, two days after the Russians launched their military invasion, the Ministry of Digital Transformation posted a request for support from the cryptocurrency community and, to date, has received over $100 million in coins like Ethereum (ETH), Bitcoin (BTC), and many other tokens.

In the latest development, Ukraine has used the modern power of blockchain technology to launch a virtual NFT museum on the Ethereum blockchain. The NFT art will capture and forever eternalize memories of significant events in chronological order during Russia’s military invasion. All proceeds raised will be allocated to the Ukrainian Ministry of Digital Transformation.

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Initially, the collection, depicting key events from 24th February, will feature 50 unique NFTs minted at 0.15 Ethereum (ETH), and the sale will include artwork by Ukrainian artists. Royalty fees for subsequent secondary market sales are 10%, with a percentage allocated towards the project’s development. 

The Deputy Minister of Digital Transformation Oleksandr Boryakov said:

“Our enemies are very afraid of the truth, because the truth always wins. It is extremely important to tell the world the real facts about the Russian invasion in Ukraine. Blockchain seems to be a powerful tool to keep the memory of the Russian war crimes, suffering of the peaceful civil people of Ukraine, the heroism of the Ukrainian Armed Forces, the resistance of the Ukrainian people and the whole Putin Blitzfail.”

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The NFT sale starts on Wednesday 2nd April 2022, with all sales listed in the official virtual war museum. On 27th March, the Meta History: Museum of Art Twitter account warned of scam NFT art appearing on the OpenSea marketplace and advised NFT enthusiasts to do their due diligence before buying NFT war art.

To view the NFT art, the museum is now open.

28th MARCH 2022

Japan is Revising Foreign Exchange Law to Stop Crypto Loophole for Russian Sanctions

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Hirokazu Matsuno, Chief Cabinet Secretary of Japan

Japan is revising Foreign Exchange laws to close the cryptocurrency loophole for Sanctions on Russia. The Japanese government expects to push through its revision of the Foreign Exchange Act to target sanctioned Russian crypto users.

Speaking at a press conference on Monday 28th, March 2022, Hirokazu Matsuno, Japan’s Chief Cabinet Secretary, said that the Japanese government is liaising with “relevant parties” to make the necessary adjustments before submitting the new bill. 

Across the globe, Western powers and allies have collaborated to impose economic sanctions against Russia, but lawmakers have criticized cryptocurrency for its role in helping Russian users evade sanctions.

If Japan’s revision to the act goes through, the Japanese government can legally apply parameters regarding cryptocurrency exchanges’ governance. Japan would have the legal rights to force crypto exchanges to investigate potential sanctioned Russian targets as a means to target evasion and close the current loophole.

Hirokazu Matsuno, Chief Cabinet Secretary of Japan, said, “In order to make the sanction more practical and effective, the decision was made to amend the Foreign Exchange Act…and the Finance Ministry is taking the lead”.

The current Japanese Foreign Exchange (Forex) Act can impose restrictions on direct investments made by foreign investors overseas, but it has no legal influence over cryptocurrency exchanges.

According to Kyodo News, the Russian Foreign Ministry stated it would cease talks with Japan regarding a postwar peace treaty. It’s believed this seemingly knee-jerk reaction was in response to the Japanese sanctions against Moscow. 

Japan’s prime minister, Fumio Kishida, said, “Russia’s actions are extremely unreasonable and totally unacceptable. All the current situations have originated from Russia’s aggression on Ukraine.”