Global cryptocurrency crash devalues Ukraine’s crypto fundraise

Despite being battered by three months of war, Ukraine aims to continue to tap crypto investors to help raise funds after a crash in prices hampered the nation’s fundraising efforts in May.

Following Russia’s invasion of Ukraine on February 24, 2022, the Ukrainian government used social media to request donations in cryptocurrency. MykhailoFedorov, Vice Prime Minister of Ukraine, sought to rally crypto investors this weekat Davos’s World Economic Forum (WEF).

On March 19, 2022, the Ukrainian government’s “Aid for Ukraine” fund announced it had raised over $60 million worth of cryptocurrency. But in May 2019, two months later, the total amount raised was worth $51.5 million, Alex Bornyakov, the Deputy Minister for Digital Transformation, said.

Cryptocurrencies have crashed steeply in recent weeks. Bitcoin has fallen over 20% of its value so far in May, following a 17% crash in April, highlighting the risks faced by investors in cryptocurrencies.

All the funds raised in the “Aid for Ukraine” fund were stored in cryptocurrency. However, the Ukrainian government spent $45 million of the fund on equipment for Ukraine’s army before the global crash, Bornyakov reported in written responses.

Ukraine has been financing its war effort in part with cryptocurrencies. The year before the invasion saw a rise in donations in Bitcoin to Ukrainian volunteer groups. The Ukrainian government estimated it required $15 billion over the next three months to aid its war-torn economic recovery.