Ukraine's Govt crypto fundraising devalued by cryptocurrency fall

After a price drop destroyed the country's fundraising efforts in May, Ukraine expects to continue tapping crypto investors to help collect finances.

Following Russia's invasion of Ukraine on February 24, the Ukrainian government requested cryptocurrency donations on social media. At the World Economic Forum in Davos this week, Ukraine's Vice Prime Minister Mykhailo Fedorov tried to rally crypto investors. The government's "Aid for Ukraine" fund said on March 19 that it had raised more than USD60 million in cryptocurrencies. But, according to Ukraine's deputy minister for digital transformation, Alex Bornyakov, the total raised two months later, on May 19, was USD51.5 million.

In recent weeks, cryptocurrency prices have plummeted. Following a 17 percent decrease in April, Bitcoin has lost more than 20% of its value in May, illustrating the risks faced by investors of the extremely volatile assets. The government was able to spend USD45 million of the monies raised in the "Aid for Ukraine" fund on equipment for Ukraine's army before the crash, according to Bornyakov in written responses to Reuters questions.

Ukraine has used bitcoins to help support its war effort. Bitcoin payments to Ukrainian volunteer groups, some of which supplied equipment to government forces, increased in the year leading up to the war. While cryptocurrency may bring some much-needed revenue, Kyiv has calculated that it will require USD15 billion in the next three months to assist the country's war-torn economy recover.

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