Crypto in times of war: the free money principle at work

Cryptocurrencies are created to circulate freely – this is their main force, which, however, makes them the targets of all sorts of accusations related to money laundering.

Many crypto specialists have spent a great deal of time proving the contrary – notably by showing how transparent the blockchain is – but so far to no avail.

That’s what makes the recent Elliptic study all the more precious. By comparing crypto donations to pro-Ukrainian and pro-russian fundraisers since the beginning of the full-scale russian invasion, it showed that the freely circulating money does not equal sponsoring terrorism, and that with the right mechanisms in place, it goes where it’s needed.

Here are the highlights of the report.

➡️ Ukraine

💰 Pro-Ukrainian causes outnumbered pro-russian donations 44:1, raising a total of over $212 million, mostly in $ETH, $USDT, and $BTC, but also smaller coins like $DOT, $BNB, and others.

🏛️ Most money went to the official government wallets ($83m), blockchain projects ($78m), military charities ($35m), and humanitarian causes ($28m). The government spent most of the received donations on fighter drones and military clothing.

⚙️ Crypto tools like DeFi, NFTs, and DAOs have helped raise over $78 million in donations.

➡️ russia

🛑 Thanks to on-chain analytics firms like Elliptic, Chainalysis, or Scorechain, millions of russia-linked addresses were prevented from using crypto to circumvent sanctions or finance the war.

🧟 Pro-russian entities have still managed to raise $4.8 million in crypto donations. Many attempts by certain entities – including some related to sanctioned groups – to emulate Ukraine’s success with NFTs and DeFi have failed.

❌ Over 10% of pro-russian donations originate from illicit sources, including dark web markets, sanctioned entities and stolen credit card vendors.

The russia-Ukrainian war is an extreme stress test for the main crypto compliance narrative – that a transparent blockchain is a better AML tool than opaque banking.
So far, its accuracy outweighs anti-crypto line 44:1.