Ukrainian Official Refutes FTX-Ukraine Money Laundering Rumors

The deputy crypto chief of Ukrainian government says war-torn country used FTX only as a fiat on-ramp.

AccessTimeIconNov 14, 2022 at 10:23 p.m. UTC
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Alex Bornyakov, deputy minister of digital transformation of Ukraine, took to Twitter Monday night to officially deny a conspiracy theory around the country's crypto fundraising effort.

"A fundraising crypto foundation @_AidForUkraine used @FTX_Official to convert crypto donations into fiat in March. Ukraine's gov never invested any funds into FTX. The whole narrative that Ukraine allegedly invested in FTX, who donated money to Democrats is nonsense, frankly," Bornyakov tweeted, ending with a "facepalm" emoji.

Last week, a theory spread on Twitter and right-wing websites suggesting the U.S. government's massive aid to the besieged nation rebounded to the U.S. Democratic party via the failed FTX crypto exchange, which was an official partner of Ukrainian government for the crypto fundraising campaign.

FTX filed for bankruptcy last week following CoinDesk's report that the balance sheet of FTX sister company Alameda Research held a surprisingly large amount of FTT, an exchange token issued by FTX. Soon after that, FTT tanked, spiraling a crisis of liquidity on the exchange and a collapse in the company's value.

Neither Ukrainian government nor FTX ever announced an investment event of any sorts. Such a move would have been extravagant for a nation fielding a full-scale military invasion from Russia using military and financial aid from the U.S., E.U., U.K. and other countries, observers have been quick to point out.

Ukraine, which raised hundreds of millions in crypto this spring, in addition to a traditional fiat campaign to support its military and civilian population, partnered with FTX in March to cash out crypto donations and turn them into ammunition and humanitarian aid. FTX, along with the Ukrainian exchange Kuna, became a platform for turning crypto into actual goods for the nation at war.

As CoinDesk earlier reported, FTX was used as a platform for merchants, which would register an account and receive payment for their goods in crypto. Then those merchants could immediately turn it into fiat if they wanted, according to the technical lead of Ukrainian government's crypto fundraise Michael Chobanyan, CEO of Kuna.

Chobanyan confirmed to CoinDesk that FTX role was limited to a fiat off-ramp: Kuna would send crypto their to get cash and pay for things the army needed.


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Anna Baydakova

Anna Baydakova was CoinDesk's investigative reporter with a special focus on Eastern Europe and Russia. Anna owns BTC and an NFT.

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