The government of Ukraine announced today that its Aid for Ukraine crypto fundraising campaign sold a donated Cryptopunk NFT and raised over $100,000 to support its war efforts against Russia.

Cryptopunk #5364 was donated to the Ukrainian crypto fund in March. Yesterday, the fund sold the NFT to an anonymous buyer for 90 ETH. NFTs are blockchain-based tokens that show ownership over digital or physical assets.

Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation—the office responsible for overseeing the nation’s wartime crypto fundraising—announced the sale in a tweet today. 

Ukraine began accepting crypto and NFT donations in late February, shortly after Russian troops invaded the country. Since then, the nation has reportedly raised over $135 million in crypto through cryptocurrency donations and sales of donated NFTs. 

In early March, a crypto group raised $6.75 million for the country’s war effort via the sale of a single NFT of the Ukrainian flag. A few weeks ago, the Ukrainian rap group Kalush Orchestra, this year’s Eurovision champions, auctioned off their trophy from the music competition to raise almost $1 million in ETH for the fund.  

 Russia-Ukraine Conflict

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Ukraine's vice prime minister and minister of digital information, Mykhailo Fedorov, on Sunday shared a photo of what the war-torn nation is spending crypto donations on: 200 sets of ballistic plates for bulletproof vests. "The better equipped soldiers," wrote Fedorov, "the sooner day of Ukrainian victory." Ukraine began accepting donations in cryptocurrencies almost immediately after Russia invaded in late February. Tens of millions of dollars quickly flooded in—from individuals, crypto grants,...

The crypto fund helps purchase non-lethal supplies for Ukraine’s military, ranging from bulletproof vests to medical supplies. The funds are not actually held or spent by the Ukrainian government, which only endorses and oversees the project. Ukrainian crypto exchange Kuna operates the fund’s treasury, which is used to help fund the purchases of volunteers. 

Ukraine’s wartime embrace of crypto has served as a case study for the potential benefits of utilizing crypto in geopolitical conflicts where fiat currency (such as U.S. dollars) can be difficult to move quickly.

It has also highlighted potential drawbacks, as well. The International Monetary Fund warned in April that Russia could skirt economic sanctions by mining cryptocurrencies—although U.S. Treasury Secretery Janet Yellen says the practice hasn't been widely observed.

Further, crypto and NFT donations are fully exposed to the current crypto bear market. Ethereum’s price has plummeted almost 70% in the last ten weeks, inexorably affecting the fundraising potential of NFT collections like Cryptopunks built on Ethereum.

The Cryptopunk that sold yesterday generated a little over $100,000 in wartime fundraising for Ukraine; that same amount of ETH would have been worth over $267,000 on the day the NFT was donated in March.