Cryptocurrency is not some dark surreptitious money laundering tool for Russian war criminals. Instead:
Cryptocurrency has proven to be an invaluable Humanitarian Tool
Ukraine has received close to $100 million in crypto donations, according to Ukraine’s deputy minister at the Ministry of Digital Transformation Alex Bornyakov, who notes President Zelensky’s support for crypto as potentially an ‘economic breakthrough’ for Ukraine.
“Never before in history have we had an asset like that. It’s like gold. You can have your savings in something where you just have to memorize or write down on paper the private key, and that’s really powerful,” Alex Gladstein, chief strategy officer at The Human Rights Foundation said in an interview with Computerworld . “I’ve interviewed lots of people from Argentina and Afghanistan who’ve left their country with their value because of the power of bitcoin. It’s a tremendous humanitarian tool.”
Crypto donations, that run on decentralized blockchains, eliminate the roughly 25-30% administrative overhead of charitable giving, putting all of the money in the pockets of the charity recipients. (Some charities are more efficient).
Web3’s value to Ukraine goes well beyond cryptocurrency donations.
- Permanent Unalterable Government Records
Rebuilding countries that are destroyed requires permanent, salvageable, and trustworthy records of land registries, titles, birth records and other official documents that help the rebuilding country establish who owns what and who is entitled to what. This became crystal clear when Haiti, already one of the world’s poorest countries, had tremendous difficulty rebuilding after the devastating 2010 earthquake destroyed 60 years of their country’s archives. See Haiti Quake Destroyed or Damaged 60 years of Archives
Ukraine is one of the first countries to use blockchain for land registries and other government records. This technology will serve them well when it comes time to rebuild.
- Permanent Unalterable Documentation of War Crimes
Russian state agencies are experts at generating fake propaganda-ridden content that spreads quickly through social media. Their disinformation campaigns activities have been documented extensively by national intelligence agencies over the past decade. The Russian State is already altering images and accounts of their reported war crimes, as has been widely reported globally.
Deepfake media has already been used to create a video of President Zelensky asking Ukrainians to lay down their arms and surrender. See Deepfake Zelensky Surrender Video is the first Intentionally used in Ukraine War
It is essential to securely and permanently store immutable authenticated images and accounts of the Russian invasion of Ukraine. Once authenticated and the originator is documented, the images and accounts must be stored in permanent unalterable storage systems enabled through blockchain technology. Already these efforts are underway. Arweave a startup vendor widely used for secure persistent NFT object storage, says there are already ten million pieces of images or photos of the conflict stored in its system. See Company using Blockchain Technology to Archive Russia-Ukraine conflict
Ukraine’s Forward Thinking stands in stark contrast to Russia’s Draconian Inhuman Invasion
Ukraine is one of the most progressive countries on earth, as can be seen in part by their thoughtful embrace of Web3 technology. The Ukrainian population itself ranks fourth in the 2021 Global Crypto Adoption Index compiled by data firm Chainalysis and conducts around $150 million in daily volume of cryptocurrency transactions.
Ukraine is ahead of most countries across the globe in terms of regulating digital assets.
Deputy minister of Digital Transformation of Ukraine Oleksandr Bornyakov wrote in Fortune last October “We became one of the world’s first countries to take a comprehensive approach toward establishing a quality regulatory framework for the virtual asset market, in which the creation of state infrastructure is a key issue.”
Lessons for US Senators
Elizabeth Warren and the cosponsors of the draft Digital Assets Sanctions Compliance Enhancement Act must educate themselves on Web3 technology. They have much to learn from Ukraine, the country they are trying to protect. Sure, criminals will use any financial system to try and hide and launder money. But blockchain is a much harder system to hide in than existing legacy financial systems. See Impacts of the Russian Invasion of Ukraine on Cryptocurrency Networks
The facts speak for themselves. “Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021” according to Chainalysis’ 2022 Crypto Crime Report Introduction who notes these transactions represent some $14 billion sent to these illicit addresses. Meanwhile, money laundering statistics from the United Nations show that about 2% to 5% of the world’s GDP is laundered every year. That’s approximately $800 billion to $2 trillion. See Money Laundering Statistics
The Russian invasion of Ukraine has terrorized freedom loving people everywhere as we watch in horror what is transpiring in 2022. Web3 won’t stop the missiles, but it does offer a ray of hope for a better safer world where innovation thrives.