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Could the Secret to Russian News Site, Meduza’s Success Be Crypto?

cryptoknowmics.com 18 May 2022 22:00, UTC
Reading time: ~5 m

Cryptocurrency donations fund the operation of the independent Russian news site "Meduza." This was a result of the pressure from the Kremlin and sanctions from the West. With the restrictions imposed as a result of the invasion of Ukraine, the Riga-based website now accepts a variety of digital coins from its Russian readers.

Journalists Pulled out of Russia As Meduza Seeks Crypto Support

According to Bloomberg, the Ukrainian conflict has had multiple effects on the Russian news website, Meduza. First, President Vladimir Putin's government prevented journalists from reporting the conflict when the Kremlin launched its special military operation. This compelled the news organization to seek assistance transporting 25 journalists to Latvia. Because of Western sanctions, the 30,000 Russian readers who assisted Meduza before the conflict cannot send money through Stripe because the payment processor has ceased operations in the Russian Federation. The sanctions acted in compliance.

What Could Be The Secret?

Because of the war and the sanctions, Meduza requested funds from its international readers in US dollars, euros, or cryptocurrencies. As a result, it now accepts credit cards, bank wires, PayPal, and a variety of cryptocurrencies, including bitcoin (BTC), ether (ETH), tether (USDT), and Monero a privacy-protecting cryptocurrency (XMR). According to the report, the BTC and ETH wallets have accumulated approximately $230,000 in cryptocurrency. According to Ivan Kolpakov, the editor-in-chief of the Russian news website, Meduza only raises about half of what it needs to grow. He wouldn't say how much money was donated, but he did say that the website is receiving all of its funding from outside the United States for the first time. Some independent Russian news outlets have shut down, and the Russian government has blocked others due to unprecedented pressure from Moscow officials. They found Meduza in Latvia's capital after Russia annexed Crimea in 2014. During another media shutdown last year, the Russian government labelled Meduza, a "foreign agent."  Before the new sanctions, the designation, targeting Russian media that receives funding from outside Russia, had already reduced their advertising revenue.

Russia-Ukraine War: What $54m in crypto donations could mean for the global crypto market

Since World War II, they regarded the Russia-Ukraine War as Europe's largest attack by one state against another. As more cryptocurrency donations pour in to help Ukraine, cryptocurrencies become an increasingly important part of the conflict. Russian troops entered Ukraine, a neighboring European country, on February 24, 2022. Putin called the invasion a "special military operation." However, The Washington Post reports that over 2,870 Ukrainian soldiers were killed and over 3,500 were injured. Many countries have sent weapons to Ukraine because Russia has the best military. The United States sent Ukraine weapons in December 2021 as part of a $200 million defense package approved by President Joe Biden. However, cryptocurrencies have been a fantastic way for people to assist Eastern European countries. According to CNBC, they received $54 million in cryptocurrency donations in the first week of March. But what does this mean for the global cryptocurrency market? How do people use them, and how are they regulated?

Ukraine requested crypto donations

On February 26, 2022, Ukraine's Deputy Prime Minister, Mykhailo Fedorov, requested cryptocurrency donations for Ukraine. He made this request on Telegram and Twitter. However, Vitalik Buterin, the co-founder of Ethereum, warned his followers to be cautious because he couldn't tell if the post was true or not.  Buterin deleted the tweet after he was certain, and donations poured in. According to the Washington Post, 46,000 people gave less than $100. However, there were also significant contributions, including $290,000 from FTX CEO Sam Bankman-Fried and $280,000 from an anonymous donor. Donations in extremely valuable tokens(NFTs) that could not be traded were also made. However, there was no need to sell them because donations in cryptocurrencies continued to pour in. Elliptic, a crypto analytics company, also confirmed that Gavin Wood, the founder of Polkadot, contributed $5.8 million. In addition, they converted some donations into fiat currency, specifically the Euro, and spent on military equipment, according to the Ukrainian cryptocurrency exchange Kuna.io.

How do crypto donations to Ukraine affect the crypto market, adoption, and regulation?

As cryptocurrency donations to Ukraine increased awareness of cryptocurrencies, crypto evangelists took advantage of the opportunity to talk about how great cryptocurrencies are and how people who don't like them can't understand. Scott Melker, a cryptocurrency trader and investor, tweeted, "Ukraine has received approximately $50 million cryptocurrency donations. So perhaps it isn't just for bad guys." He stated that countries have incorrectly viewed cryptocurrency as a means to engage in illegal activities. Anthony Pompliano, also known as "Pomp," is a well-known cryptocurrency commentator who has publicly expressed his support for cryptocurrencies. He stated, "This appears to be a watershed moment for the world's fiat currencies. A country currently fighting a violent war to maintain its sovereignty and independence is appealing to the public for bitcoin and other cryptocurrencies donations. This was unthinkable just a few years ago." Cryptocurrencies have been the simplest and possibly the only way for the Ukrainian government to accept donations. Following Russia's invasion of Ukraine in February, the country's president, Volodymyr Zelenskyy, declared martial law. They suspended Civil law and placed civilians under military rule. This made sending and receiving fiat currencies nearly impossible. Even though recent events have made cryptocurrencies look good, the market has not shown any sign of improvement.

Effects Of The Donations On Crypto Price

Within hours of the invasion, the value of the most popular cryptocurrency, Bitcoin, fell by 8%, from $37,000 to $34,000. Ethereum and Solana have also suffered significant losses in value. Nonetheless, as the conflict progressed and more sanctions were imposed on Russia, the price of Bitcoin rose to around $44,000. Then, just as investors were expecting a stable market, the largest cryptocurrency by market capitalization fell below $39,000. The more money they gave, the more the market crashed. This was most likely due to Ukraine's conversion of crypto assets into fiat currency. According to Andy LaPointe, a crypto educator and investor, "Cryptocurrency market capitalization is $1.84 trillion worldwide. Even if they sold all of the donations to Ukraine at once, it would have no effect on prices." Donations to Ukraine do not affect the cryptocurrency market, but they are excellent for the cryptocurrency's public relations. As a result, we may see more applications for cryptocurrency.

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