#UKRAINERUSSIAWAR. Crypto money for Ukraine disappeared


The scandal surrounding the currently bankrupt crypto exchange FTX continues to make headlines. According to thegrayzone’s investigation by Kit Klarenberg published on 15 November, it was discovered that the FTX exchange helped donate USD 60 million to Kiev, allegedly ‘for the purchase of cartridges, bandages, and bulletproof vests’ that have since disappeared.

Within days of the start of the conflict, Ukraine’s Ministry of Digital Development established a partnership with FTX and started collecting donations with their help. The site with cryptocurrency donations moved from the ministerial portal to a separate landing place (https://aid-for-ukraine.io/), the FTX logo disappeared, and officials of the Ministry of Digital Transformation started to claim that they worked with Sam Bankman-Freed first a couple of months after the start of the war. But in the very first two months of collaboration with FTX, ’60 to 70 million dollars’ were received, of which 54 million were spent on something in general terms and under the cover of secrecy.

The Ukrainian government, according to the portal, made the online records of its fundraising agreement with the crypto FTX disappear a few days before the scandal broke. The disappearance of FTX, the fifth largest cryptocurrency exchange by trading volume in 2022, and the second largest by size of holdings, unleashed a wave of chaos in global financial markets.

Kiev for Kit Klarenberg, is conducting a clean-up and whitewashing operation to remove from the web any reference to a high-level cryptocurrency deal made with FTX. Oddly enough, the operation seems to have started a few days before the scandal broke. FTX lost 94% of its value in a single day. FTX filed for bankruptcy on 11 November.

FTX founder Sam Bankman-Fried is also a donor to the Democratic Party, in 2020 he donated $5.2 million to Joe Biden’s election campaign. And now he faces a criminal investigation in the Bahamas, where the exchange was based, and calls for official investigations into the largely unregulated cryptocurrency industry are spreading around the world. The sudden death of FTX has been compared to the disintegration of Lehman Brothers in 2008 that precipitated the financial crisis.

Large client holdings apparently disappeared thanks to a secret ‘back door’ in FTX’s accounting system that allowed Bankman-Fried to make changes to the company’s financial records without any accountability. This connivance may have been used to hide at least $10 billion of client funds that Bankman-Fried transferred from the exchange to another company he founded in 2017. Digital asset trading firm Alameda Research, via twitter @FTX_Official, wrote on 16 November that Bankman-Fried had resigned from all positions and had no role in the company.

While the mainstream media dwelled on the details of Bankman-Fried’s gigantic cryptocurrency scam, none of the major media outlets investigated or even acknowledged FTX’s relationship with the Ukrainian government. After all, Bankman-Fried has ostentatiously promoted its intimate financial relationship with the government of Ukrainian President Volodymyr Zelensky.

In a post dated 14 March 2022, FTX pledges to ‘turn bitcoin into bullets, bandages and other war material’ for Ukraine. The partnership between FTX and the Ukrainian government was thus announced when the leading cryptocurrency website CoinDesk announced that Kiev had launched a webpage dedicated to cryptocurrency donations, called Aid for Ukraine.

The portal read: ‘Under its auspices, FTX has pledged to “convert cryptocurrency contributions to Ukraine’s war effort into fiat to be deposited” with the National Bank of Kiev, enabling the ailing government to “turn bitcoins into bullets, bandages, and other war materiel. CoinDesk stated that the initiative ‘deepens an unprecedented link between public and private sector forces in crypto’. Oleksandr Bornyakov, an official at Ukraine’s Ministry of Digital Transformation, hinted to CoinDesk at an “upcoming NFT auction” to “give the next boost to the cryptocurrency collection process””

In a press release accompanying the announcement of FTX’s partnership with Ukraine, Bankman-Fried explained that ‘at the beginning of the conflict in Ukraine, FTX felt the need to provide assistance in any way possible’. He promised that the agreement provides ‘the ability to deliver aid and resources to the people who need it most’.

In Kiev, the Aid to Ukraine website disappears just days before the FTX scandal is made public. But Ffno until recently, it encouraged visitors to ‘help Ukraine with cryptocurrency’ and urged ‘not to leave us alone with the enemy’.

In 2022 alone, Bankman-Fried has donated almost $40 million to Democratic candidates, campaigns and PACs. This round of donations has made him the second largest individual donor to Democratic causes, after liberal venture capitalist George Soros.

Most recently, Bankman-Fried pledged to donate the incredible sum of $1 billion between this year and 2024 to ensure a Democratic victory in the next presidential election. On 14 October, however, he backtracked, calling the investment a ‘stupid’ move. Something scandalous was brewing behind the scenes. A week later, the Texas State Securities Board announced that it was investigating FTX on suspicion of selling unregistered securities.

To return to the $60 million raised and declared on the web in July by the cryptocurrency aid collection site for Ukraine,. The last available acquisition on the Internet Archive of ‘Aid for Ukraine’ took place on the afternoon of 26 October. The page was deleted by Kiev at the end of October.

What happened to the $60 million raised by Aid for Ukraine? If FTX was indeed laundering funds for the proxy war in Ukraine, the slightest indication that regulators were investigating its operations would have set off alarm bells throughout Washington – and by extension, Kiev. A breakdown of expenditure on Aid for Ukraine’s new website states that Kiev had spent a total of $54,573,622 in cryptocurrency donations by 7 July on a wide variety of equipment, vehicles, drones, ‘lethal equipment’ and other resources. One of the largest expenditures was $5,250,519 for a ‘worldwide media campaign against the war’, the details of which ‘will be published only after our victory’ for ‘security reasons’.

Anna Lotti

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