Cryptocurrency gains more attention amid Ukraine crisis

Captured image of the Ukrainian government's Twitter message

By Anna J. Park

The military clash between Russia and Ukraine is now being called the world's first “crypto war,” as the stateless digital currency seems to be used by both sides. The currency is being used to receive charity and donations for one side, but also to fund an autocratic regime on the other.

Since the Ukrainian government posted an official Twitter message on Feb. 27 saying that the government is accepting cryptocurrency donations, numerous netizens from all around the world sent digital currency donations for Ukrainians. Many Korean Twitter users have also been posting screen shot images that prove their crypto donations for the country under Russian invasion.

Even before the Ukrainian government released its digital wallet address for the donation on Sunday, people from across the world already sent millions of dollars to support the country's army. According to blockchain analytics firm Elliptic, over $4.1 million or 109 BTC was raised in just one day since Come Back Alive, a Kyiv-based NGO foundation, launched the campaign last Thursday.

However, such borderless digital funds could also provide a safe haven for Russia, as the country now faces multiple layers of economic sanctions from powerful countries, including a cutoff from the SWIFT banking system.

That's why Christine Lagarde, president of the European Central Bank (ECB), seeks to approve regulations on cryptocurrencies, aiming to prevent Russia from bypassing global financial sanctions.

“Whenever there is a ban or prohibition or a mechanism in place to boycott or prohibit, there are always criminal ways that will try to circumvent the prohibition or the ban,” Lagarde said. “It's so critically important that the Markets in Crypto Assets Directive (MiCA) is pushed through as quickly as possible so we have a regulatory framework within which crypto assets can actually be caught.”

The price of a Bitcoin fell by more than two percent over concerns about the regulation as well as continuing military clashes. The digital currency traded at $37,842.44 as of 2:50 p.m. Korea time, which is a 2.16 percent drop from the previous day. It is more than a 44 percent plunge from early November, when one Bitcoin traded at around $67,000.

Meanwhile, Ethereum founder Vitalik Buterin denounced Russia's invasion on Ukraine through his Twitter account last week. The Russia-born Canadian cryptocurrency billionaire tweeted, “Reminder: Ethereum is neutral, but I am not.”

The Ethereum founder continued to tweet messages on cryptocurrency fundraising campaigns to support Ukraine with humanitarian aid.