Ukrainian Vice Prime Minister Mykhailo Fedorov, who is also the nation's minister of digital transformation, said in a tweet Thursday that the government had decided to cancel an "airdrop" of cryptocurrency tokens to donors. The official Twitter account of the Ukrainian government on Wednesday said it would reward donors who had contributed digital assets to its fundraising efforts, but Fedorov's tweet nixed that plan.
"After careful consideration, we decided to cancel [the] airdrop," Fedorov tweeted. "Every day there are more and more people willing to help Ukraine to fight back the aggression."
Instead, the country will sell non-fungible tokens to raise further funds for its military, Fedorov said. NFTs are digital assets that represent ownership of an item. Their most prominent use so far has been in the sale of digital art, music and sports highlight clips.
"We will announce NFTs to support Ukrainian Armed Forces soon," Fedorov said. "We DO NOT HAVE any plans to issue any fungible tokens."
The government and various nongovernment organizations supporting Ukraine's military have raised nearly $55 million in digital-asset donations as of late morning Wednesday, according to blockchain analytics firm Elliptic.
The funds stem from more than 100,000 donations, including a $5.8 million donation from the founder of blockchain platform Polkadot, Elliptic said.
Cryptocurrency has also been in the spotlight as a potential way for Russian actors to evade the slew of financial sanctions levied over the past week. On Wednesday, a group of Democratic senators asked Treasury Secretary Janet Yellen to detail the U.S. Department of the Treasury's plan to ensure cryptocurrencies aren't used as a sanctions dodge, and New York Gov. Kathy Hochul said the state's Department of Financial Services would speed up procurement of blockchain analytics services to help track down illicit uses of digital assets.
A number of major cryptocurrency exchanges, for their part, have put out statements saying sanctions compliance is top-of-mind. But many of them have pushed back on Fedorov's request to issue a blanket ban on all Russian users.
Coinbase Global Inc.'s chief legal officer, Paul Grewal, for example, said Monday that such a move would "punish ordinary Russian citizens who are enduring historic currency destabilizations as a result of their government's aggression against a democratic neighbor."
--Additional reporting by Dorothy Atkins and Jon Hill. Editing by Janice Carter Brown.
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