Why FTX donating cash to every Ukrainian?

February 25, 2022 01:08 PM PST | By Versha Jain

Why FTX donating cash to every Ukrainian? — Image source: Shutterstock.com

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Highlights

FTX CEO Sam Bankman-Fried said it would donate cash to each Ukrainian registered on the platform.

NGOs raised US$4 million in cryptocurrencies for Ukraine’s aid in the past two days.

Ukraine’s military, which is fighting a battle with Russia, had a budget of about US$5.9 billion in 2020.

Many private groups from around the world are helping the Ukrainian people and the reservists in the battle against the formidable Russian military after peace talks collapsed.

Fearing a major humanitarian crisis, international groups and private organizations are donating money and other relief to civilians caught in the conflict.

On Thursday, the US and EU allies have swiftly announced sanctions to penalize Russia after it commenced a pre-dawn military attack while urging Moscow to return to the discussion table.

The Ukrainian central bank has limited cash withdrawal and closed the foreign currencies exchanges as martial law came into forceWith limited access to currency notes, many people look at cryptocurrencies as an alternative.

FTX support

FTX Trading LtdCEO Sam Bankman-Fried said the cryptocurrency exchange would donate US$25 to each Ukrainian registered on the platform.

He reportedly tweeted, "do what you gotta do", referring to the FTX decision on Thursday.

FTX President Brett Harrison told Bloomberg that its userbase has grown in Ukraine.

Many other supporters are donating cryptocurrencies to Ukrainian NGOs, according to crypto analytics firm EllipticNGOs and other volunteer groups have raised around US$4 million in cryptocurrencies over the past two days.

On Friday, around US$3.5 million more were raised, of which US$3 million came from a single donor, it saidOn Thursday, nearly US$700,000 were raised for Ukraine’s aid.

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The crypto aid is proving critical to people desperate for cash as banks have shut operations.

A few days before the war broke out, Ukraine had legalized cryptocurrenciesThe Ukrainian Defence Ministry said it would welcome donations in fiat money for medical and logistics.

On Thursday, the National Bank of Ukraine has created a special account to transfer money in major currencies from around the world.

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Humanitarian aid to civilians

The humanitarian support is mainly aimed at the civiliansThe reservists are unlikely to make any major dent in the Russian military, whose annual budget was around US$62 billion in 2020.

However, local NGOs like Come Back Alive have been receiving overseas aid in cryptocurrencies since 2018It provides equipment, medical supplies, and training services to the military.

The Ukrainian military budget was about US$5.92 billion in 2020, as per World Bank data.

Still, the option to convert the cryptos into fiat money remains limitedMoreover, cryptocurrencies are not extensively used for paying for food and other essentials.

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Finally, the crypto aid may be of little help to people because of limited options to encash them in the conflict zoneAlso, it won't be easy to reach out to all people in need of cash.

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