How to donate cryptocurrency to Ukraine and avoid risks?

Last week, Russia’s attacks on Ukraine left the world aback. As a result, governments, and people from around the world showed their support. This translated into massive donations being sent to Ukraine, with millions donated in cryptocurrency to Ukraine.

How to donate cryptocurrency to Ukraine?

Several posts published on Twitter accounts linked to the government provide addresses to donate cryptocurrency to Ukraine. These addresses are confirmed to be controlled by the government and safe to donate to:

• BTC: 357a3So9CbsNfBBgFYACGvxxS6tMaDoa1P
• ETH and USDT: 0x165CD37b4C644C2921454429E7F9358d18A45e14
• USDT (TRC20): TEFccmfQ38cZS1DTZVhsxKVDckA8Y6VfCy
• DOT: 1x8aa2N2Ar9SQweJv9vsuZn3WYDHu7gMQu1RePjZuBe33Hv

As of March 3, people have donated $40+ million in cryptocurrencies to Ukraine via the wallets above. This shows that the cryptocurrency community widely supports Ukraine and wants to help. Cryptocurrency donations break down as follows.

The Ukrainian government has also stated on its Twitter account that it will start supporting additional cryptocurrencies for donations. Over the last two days it provided addresses for Solana and Dogecoin:

• Solana: 66pJhhESDjdeBBDdkKmxYYd7q6GUggYPWjxpMKNX39KV
• Dogecoin: DS76K9uJJzQjCFvAbpPGtFerp1qkJoeLwL

Besides, Come Back Alive, one of the largest NGOs raising funds for Ukraine, is also receiving huge amounts in cryptocurrency donations. The organization supporting the Ukrainian military has managed to raise $8+ million through its Bitcoin wallet bc1qkd5az2ml7dk5j5h672yhxmhmxe9tuf97j39fm6. The NGO provided additional donations addresses on their Twitter account:

• Ethereum (ETH, USDT, USDC): 0xa1b1bbB8070Df2450810b8eB2425D543cfCeF79b
• TRC20 (Tether): TX9aNri16bSxVYi6oMnKDj5RMKAMBXWzon

Besides, several companies from the industry are also implementing ways to easily donate cryptocurrency to Ukraine. For example, the decentralized exchange Uniswap allows users to donate the token of their choice. Uniswap will then automatically convert the tokens to ETH and send them the government.

Cryptocurrency donations are an easy way to support Ukraine, the people, and their efforts. If you’d like to make a donation to Ukraine, you should be careful of the address you are sending to. Indeed, nefarious actors are trying to take advantage of the situation to scam people.

Worldwide governments are sanctioning Russia

After Russia’s decision to attack Ukraine, sanctions have started falling on the country as a swift reaction from international governments like the US, the UK, The EU, Japan, or Singapore. For instance, these sanctions include financial sanctions, travel bans, or asset freezes.

More specifically, the EU decided to ban 7 Russian banks from the SWIFT banking system, which will take effect on March 12. The system allows rapid money transfers across countries and today links 11,000+ banks in 200+ countries. This exclusion could constitute a major issue for Russia as it would disrupt its financial and banking systems by adding costs and delays for banks to process the payments.

Moreover, several western countries also agreed to freeze the Russian Central Bank assets, preventing the Bank to access hundreds of billions of dollars in international reserves. Also, people in the EU, the US, and the UK are now prohibited to do transactions with Russia’s Central Bank, Finance Ministry, and wealth funds which will further cripple the Russian economy.

Yesterday, the OFAC published a new regulation, effective March 1, that requires VASPs and crypto service providers to monitor constantly and refuse transactions stemming from sanctioned persons and their crypto wallets.

It is likely that additional sanctions will keep on coming as the conflict goes on. However and despite these sanctions, some say that Russia could use cryptocurrencies to bypass the penalties. Russia could then try to use crypto to evade these sanctions. However, the EU will be taking measures to prevent cryptocurrencies from being used to circumvent financial sanctions.

Implementing sanction compliance checks on cryptocurrencies

Red flagging risky crypto activity

Scorechain is always monitoring blockchain activity to flag the latest scams on the software. We have already spotted some scam donation addresses asking for funds in support of Ukraine.

Such addresses are immediately flagged as “Scam” and assigned a low risk-AML score. Users should avoid transacting with them at all costs as they represent high risks in terms of money laundering (ML), terrorism financing (TF), or sanction evading.

The platform also red flags sanction list addresses to which is assigned the lowest risk-AML score, notifying users of the dangers associated with addresses, transactions, and entities.

Risk Indicators and Risk Scoring

If companies would like to avoid transacting cryptocurrencies with Russia due to newly established sanctions, compliance officers can set the Risk Indicator “Russia” to be notified if an address, an entity, or a transaction has ties with Russian funds. It is also possible the use the Entity Directory to know which VASP is based in the country.

Risk Scoring assesses the overall level of AML risk for crypto entities, transactions, and addresses but also for incoming and outgoing funds. This helps compliance officers have a clear view of which address they can work with or not.

If you need advice on how to adapt your crypto AML strategies to the evolving sanction policies, or if you need additional information about a crypto donation address for Ukraine, don’t hesitate to contact us. Our AML experts will be happy to assist you.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped more than 200 customers in 45+ countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, Tron with TRC10 and TRC20 tokens, and BSC with BEP20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.