The war in Ukraine reveals something very important about cryptocurrencies

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Despite the sanctions on Russia over the war, cryptocurrencies continue to flow to militias and arms dealers, thanks to suspicious transactions in Russia, China and India.

by Jeff John Roberts

Since Russia launched its military operation in Ukraine in February, cryptocurrencies have become part of history. The conflict has shown the world the potential and limits of blockchain technology and also raised tough ethical questions for the cryptocurrency community and its critics.

The most recent example comes via Wired’s famous cybersecurity reporter Andy Greenberg, whose latest article recounts how difficult it is to stop cryptocurrency donations to Russia’s war machine.

Greenberg explores how, despite sanctions, cryptocurrencies continue to flow to militias and arms dealers thanks to suspicious transactions in Russia, China and India.

Forensic accounting shows that more than $4 million has been invested in cryptocurrencies, though the actual number is likely much higher.

For those who hate cryptocurrencies, this further confirms their belief that Bitcoin is only useful for fraud and crime – regardless of the fact that regimes like Russia are trading in US dollars, gold and other “respected” currencies.

Meanwhile, the detection of cryptocurrencies flowing into Russia has created some unexpected heroes.

These include Binance, which has a reputation for operating outside the law, but in the case of the conflict in Ukraine has supported an investigative team that helped track illegal donations by monitoring Telegram and blockchain.

The most unexpected and frankly disturbing aspect of the conflict in Ukraine, however, is the number of prominent Twitter personalities acting as apologists for the war.

In some cases, this takes the form of a call for the West to stop intervening on Ukraine’s side for fear of Russia using nuclear weapons (an argument that is both logical and wrong given that appeasing Russia would encourage other countries to engage in nuclear blackmail).

Worse still are the voices on Twitter expressing tacit sympathy for Russia and placing moral responsibility on the US and UK for supporting Ukraine. It’s hard to know if this is a misinformed offshoot of the libertarian philosophy that has defined the ethos of so many leaders in the cryptocurrency space.

Or worse, whether it is simply admiration for the authoritarianism that inspires Russia’s supporters. Whatever the reason, it’s frustrating to watch large segments of the cryptocurrency community – usually so committed to the idea of human freedom – take to Twitter on Russia’s side.

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