The War In Ukraine: Economic Sanctions And Cryptocurrencies

Between 23 and 24 February 2022, Putin initiated the invasion of Ukraine. His aim is to liberate Donetsk, Lugansk and all pro-Russian Ukrainian territories. Western countries are not intervening because Ukraine is not part of NATO. On the other hand, if someone intervened, the threat of World War III would be very concrete.


For the moment, the answers have been Anonymous attacks (TV broadcasters, media, governments, Kremlin website, Gazprom, Rosneft, Lukoil, etc) and economic sanctions. Economic sanctions aim to weaken the country, undermining its productive and expansive capacity and creating internal tensions.
The assets of 5 Russian banks that financed the invasion of Ukraine were frozen. Access by Russian banks to European financial markets and the Nord Stream 2 submarine pipeline between Russia and Germany was blocked. This 1,200 km long pipeline is capable of carrying over 50 billion cubic meters of gas per year from Russia to Germany.


The export to Russia of new technologies (Android and Apple), industrial equipment, export of civil and military goods was also blocked. In addition, a ban was also enacted for EU banks from accepting deposits from Russian citizens over 100,000€. Japan has banned the issuance of visas to people linked to the two independent republics. Canada has banned economic transactions with both Russia and the pro-Russian territories. Similar sanctions also from England. Furthermore, for Aeroflot, the Russian airline, it was forbidden to fly over British airspace. Europe and other countries have followed what England has done by closing airspace to Russia and, in the same way, Putin has closed it to 36 countries. In the US, four Russian state-owned banks have been sanctioned for a total value of $ 1 trillion, halved the export of technological equipment and implemented restrictions on loans to 13 Russian companies. Later, sanctions also came from the giants of the web: Google, Youtube and from social networks (Facebook and Twitter). The world of sport also responded aggressively by disqualifying the Russian national team from most sporting events. Similar speech for the Russian clubs. I think this is wrong.



In this context, it is important to underline that cryptocurrencies have been the absolute protagonists for several reasons. When the invasion began, the entire market collapsed: crypto and nasdaq. However, the 2 days later there was a clear mismatch between crypto and financial markets with Bitcoin reaching almost $ 45,000. In recent days there has been a lot of talk about the possibility of the Russians to break economic sanctions with cryptocurrencies. We know that if exchanges are used, everything is easily traceable due to the KYC. Actually, even the blockchains are public (apart from Monero, Dash, ZCash, Secret Network or if you use mixers like Tornado Cash).


Furthermore, cryptocurrencies were also protagonists due to the donations accepted by Ukraine. The donations were made through Bitcoin, Ethereum, Solana, etc. On March 2, the Ukrainian government leaked an indiscretion: there would be an airdrop for those who donated.


As you can see in the photo below (Dune Analytics), there was a boom in donations when Ukraine announced an airdrop (ICO or NFT):

Some of the crypto world responded under the Ukrainian government posts. Above all Gavin Wood, the founder of Polkadot. Wood reiterated that he would donate $ 5M if they put Dot's address as well. Many users have criticized Wood saying to stop advertising Dot even in such a situation. Wood was however satisfied and then donated 5M.



The very ugly figure that the founder of Tron made: Justin Sun was not surprised. Sun first wrote about whether it was possible to donate using the Trc20 network. He later complained that despite having donated over $ 1.2M, his community was apparently ignored by the airdrop. The Ukrainian government publicly thanked Ethereum users, Gavin Wood, the Bitcoin community and Solana but not Tron.



The wisest decision was made by the Ukrainian government which decided to cancel the airdrop. It was probably a publicity stunt from the start, perhaps to increase donations. If we see the graph above they have succeeded perfectly. A lot of people started donating because of the airdrop.



According to some users on Twitter it was the fastest rug pull in history! It was certainly a good social experiment. Now we just have to hope that the war in Ukraine ends as soon as possible. It is not possible to die of war in 2022. This is true for Ukraine and equally for all nations where wars seem to have become almost the norm.




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