Russian Activists Turn to Crypto for Donations to Aid Ukraine Refugees

“For Russian citizens, sending money to help Ukrainians might not be safe” through the banking system, says one volunteer.

AccessTimeIconJul 18, 2022 at 6:58 p.m. UTC
Updated Jul 27, 2022 at 5:00 p.m. UTC
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Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC.

“There was a woman that arrived in a bathrobe.”

Alexander Shmelev was describing a refugee who drove 30 hours to Pristaniste, the shelter in Budva, Montenegro, he opened on March 5, about two weeks after Russia invaded Ukraine.

The woman lived 2,445 kilometers (1,500 miles) away in Kharkiv, Ukraine’s second-largest city, Shmelev said. “When the shelling started, she just grabbed her son, jumped in a car and drove all the way to us.”

The shelter consists of three multifamily homes where around 78 refugees from Ukraine, Russia and Belarus can get some rest and decide what they want to do next: either move to a different country or become legal residents in Montenegro and stay longer.

Since Shmelev and his wife Svetlana, both well-known Russian activists and educators, opened the shelter, the project has been in constant need of funding. The new charity project initially did not have a bank account in Montenegro, so the Shmelevs decided to start a cryptocurrency fundraiser.

By the time Pristaniste (named after the Serbian word for “refugee”) finalized the paperwork and got its bank account on June 26, over $50,000 has been raised already – in crypto. CoinDesk spoke to a number of similar projects helping refugees in several countries that are using crypto as an additional channel of funding.

These projects are the underdogs of the charity world, and their founders often face unwelcoming treatment abroad and retaliation from their home country – Russia. Since the war started and Russians got cut off from the global payment systems as a result of sanctions, crypto has become the fastest way to help people across borders.

The main convenience of crypto for volunteers helping refugees is that it’s immediately available to send and receive, while bank accounts abroad, especially for organizations, are not, and take time and paperwork to obtain, as Shmelev’s experience illustrates.

For some, crypto is also safer than fiat donations: Russians who want to help Ukrainians face political threats at home, where such help might be recognized as treason – and with bank transfers, any donation can be immediately traced back to the donor.

Home for all

After the invasion, millions of Ukrainians started fleeing the country. Many Russians felt unsafe at home, too.

Intensifying repression of independent journalists, activists and nongovernmental organizations (NGOs), severe censorship and the rumors of a coming nationwide war mobilization led hundreds of Russians to seek refuge in Turkey, Armenia, Georgia and other countries. Everywhere they went, they met refugees from the other side.

These two types of involuntary migrants sometimes share the same shelters, supported by the same teams of volunteers who are trying to build safe homes from scratch, with limited to no resources and no help from the local authorities.

Pristaniste raised crypto via Coinbase’s payment platform, Coinbase Commerce, and the crypto crowdfunding website Heo.Finance. According to the data on Heo.Finance, Pristaniste managed to raise over $43,500 in various cryptos since this spring. An additional $10,000 has been raised in a separate campaign to provide education for refugees’ children in Montenegro.

Overall, crypto donations by early July exceeded $53,000, twice as much as the $21,000 raised in fiat. However, since Pristaniste opened a Montenegro bank account on June 26 and started a campaign on GoFundMe, the inflow of crypto donations slowed down quite a bit, Shmelev said. But for Russians who do not have a foreign bank account, crypto is still the only way to donate a small sum, not worth the high fees an interbank SWIFT transfer would require.

“We used to think we better put Ukrainians and Russians in separate homes but then the first couple that stayed with us was a mixed one,” Shmelev said. “In the end, there is no separation, and there have been no conflicts.”

One family that stayed at the shelter and left some time ago wrote to Shmelev, “it’s a strange time when close ones become strangers and strangers become family,” he recalled.

Along with Ukrainians, Pristaniste hosts refugees from Belarus who participated in the 2020 protests and fled the country fearing repression, as well as Russian journalists and activists avoiding police raids, harassment and jail time at home.

“Another group is young men that can be conscripted to the military [in Russia] due to their age and their parents don’t want them to go to war,” Shmelev said. “Sometimes, parents don’t go themselves but send their sons here.”

Donations for unbanked

For Russian citizens, the situation was made worse by the fact that their own bank accounts in Russia are no longer accessible from abroad due to the sanctions the EU and the U.S. imposed on Russia. Visa and Mastercard stopped processing payments from Russia-issued debit cards, and ​​major global payment systems, such as Western Union, Wise, Remitly and MoneyGram, stopped serving Russian users.

Motskhaleba Foundation (the name means “mercy” in Georgian) started with a bot on the Telegram messaging app and a small team of volunteers connected online. Now a team of over 30 Russians, Ukrainians and Belarussians living in Tbilisi are getting ready to welcome about 25 refugees from Ukraine in a house the foundation rented so that the refugees get a break to catch their breath and plan their next steps toward a peaceful life.

The foundation is not registered as an official NGO yet. However, since May, the team managed to raise about $4,900 (28,300 Georgian lari) and rent a house, according to a makeshift financial report the team published in late July. Most of the funds are now coming via the personal bank account of the founder, a Moscow-born freelance journalist named Yulia Kosheliaeva, who relocated to Georgia this spring.

Bank transfers are not always the optimal way, she said: “Sometimes, people from other countries ask how to send us money, and we suggest a SWIFT transfer, but they say, ‘Are you crazy? Most of my donation is going to be eaten by fees!’”

For the Volunteers of Tbilisi, another organization in Georgia helping refugees with housing and everyday supplies, crypto provided 7% to 10% of all donations, said volunteer Sasha Khalipova. The organization has been receiving USDT, the stablecoin designed to hold its value against the U.S. dollar, on the Tron blockchain (where fees tend to be lower than other networks USDT runs on). The wallet receives small donations of 10 to 50 USDT every few days. Occasionally larger sums of 250 or more USDT come in. Since April 7, the wallet received over 60 transactions and about $9,200 in USDT, according to the data on Tronscan, a block explorer site.

For some volunteers, the donations were their first experience with crypto, and it proved sometimes confusing: For example, Koshelyaeva of Motskhaleba said the team was first advised by friends to use USDT and another stablecoin, USDC, on the Solana blockchain. Some surprised crypto donors asked for more “mainstream” options, and the team added the two most popular cryptocurrencies, bitcoin and ether.

For Russians for Ukraine, a volunteer organization in Poland helping the refugees crossing the Ukrainian border on the west, crypto is like a piggy bank for a rainy day, said George Nurmanov, the founder who himself fled Russia fearing political repressions.

Russians for Ukraine is renting a house near the Polish border in Przemysl so it can maintain a constant presence at the local train station, refugee center and at the pedestrian border crossing. The group helps refugees buy tickets, find shelter and communicate with the Polish cashiers at the railway stations. The volunteers’ house in Medyka, the Polish village right at the border, also serves as a temporary home for humanitarian supplies and people delivering them to Ukraine.

“People were asking me about crypto, so I opened those wallets,” Nurmanov said, adding that donations via PayPal and GoFundMe can sometimes get stuck between the service and a user’s account if a platform decides to freeze an account or if it just takes too long to transfer the money. At this point, only a small number of donations has hit Russians for Ukraine’s crypto wallets.

Silent protest

There is another reason crypto might be preferable for Russians willing to help Ukrainians, said Vlad, a volunteer for Ethos, a fund created by Russian expats that helps refugees rent apartments in Armenia and gives away things like medicine and hygiene products. Ethos is raising money in bitcoin, ether, tron, BNB and USDT. According to the blockchain data, so far, about $1,100 in USDT has been raised.

“For Russian citizens, sending money to help Ukrainians might not be safe,” Vlad said.

During the first week of the war, on Feb. 27, Russia’s office of attorney general warned in its official Telegram channel against helping a foreign state or organizations whose activities are “directed against the safety of Russia.” Such help can qualify as high treason, the post said. Earlier in July, the Federal Security Service’s armed squad paid a visit to the apartment of a Russian citizen who made donations to the fund supporting Ukraine’s army. He was told on camera that such actions can be classified as treason and asked if that was clear to him.

There are no known cases of people being punished for supporting humanitarian cases. However, Russian legal experts warn against using personal bank accounts for helping Ukrainians in any form, as there is no certainty about what can be classified a crime next, and bank transfers are easily traceable. Crypto, on the other hand, offers more ways for anonymity – although never a complete one.

Koshelyaeva says that she and her team expect Russians to be main donors to Motskhaleba.

“We know that many people who left Russia [after the war began] do care about what’s going on, and it’s important for them to show they disagree” with the government’s actions. “For some, donating money is the only available way to protest against the war and support Ukrainians. Many Russians come to us asking how to send us money,” Koshelyaeva said.

Speaking up against the war in Ukraine became illegal in Russia soon after the war started: Under the new law, opposing the Russian army's actions might lead to up to 15 years in jail. On July 8, a member of the Moscow municipal council, Aleksei Gorinov, was sentenced to seven years in prison for speaking against the war during the council’s session.

“To help financially in this horrendous situation is a little something people can do,” Koshelyaeva said.


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CoinDesk - Unknown

Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC.

CoinDesk - Unknown

Anna Baydakova is an investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC.