Controversy Over 'Government Supported' Ukraine Crypto-Charity that Raised MILLIONS....
As Russia invaded Ukraine in February of last year, an organization called Ukraine DAO instantly surfaced as a charity ready to help those wanting to donate to Ukraine using crypto, promising 100% of donations would go to the cause.
UkraineDAO started off doing what they promised to do…
The organization’s first move was the auction of an NFT of the Ukrainian flag. Many in the crypto community shared this on social media, along with some high profile exposure from people like Ethereum founder Vitalik Buterin and Nadia Tolokonnikova of Russian Anti-Putin band Pussy Riot.
The NFT raised a total of $6.8 million worth of ETH at the time - and on-chain records show this being transferred to non-profit Ukrainian Military Support organization ‘Come Back Alive’ which helps supply equipment and training for Ukrainian soldiers.
Their verifiable donations include:
- 1550.5 ETH to Come Back Alive.
- 387.63 ETH to Ukraine Government.
- 190.49 ETH to OutRight Action International
- 4.43 ETH to Psychology for Human Rights
This totals approximately 2130 ETH verifiably donated. But the wallet data shows a total of 2468 ETH received.
So there’s a remaining 338 ETH with a current value approximately $640,300. Some of this sits unspent, some is accounted for, and some is accounted for but the way it was used is where conflict begins to arise.
Things got real nasty, real fast...
The first issue came to light when Nadia Tolokonnikova of Russian Anti-Putin band Pussy Riot, who initially endorsed the project, quit after learning that the promise of “100% of funds” going to help those effected by the war untrue and project leader Alona Shevchenko had been taking a $5,000/month salary.
Alona responded showing how previously Nadia had given interviews where she was asked about when she ‘started the charity, Nadia told the interviewer the she "along with a number of friends’ felt they had to do something when they learned the invasion had begun. Alona seems to think Nadia was positioning herself in interviews to be seen as the main person behind it.
[This portion of the article has been updated] There are 5 leaders who all need to sign off anytime a transaction is made from the official wallet (multi-sig). We initially reported that Nadia was not one of those five people, therefore it appeared she was not among the original founders.
That was incorrect - she no longer is one of the five required signatures, which is why we did not see her there when we looked. But at the beginning, she was.
John Caldwell was another one of the five, he currently runs another charitable DAO he co-founded with Nadia called Unicorn DAO. John provided evidence of earlier transactions showing Nadia's signature on them, and explained that once UkraineDAO distributed the majority of the funds, both he and Nadia moved on, explaining "on that list of transactions, on #44 Pussyriot.eth was removed, then 45 I removed myself" trusting that the remaining funds would continue to be distributed appropriately.
It's the management of those remaining funds that have some people concerned...
You can still see the promise made on their official Twitter account that “100% proceeds go to support Ukrainians suffering for the war” - no room for confusion there .
While Alona is from Ukraine, she has been living in the UK for years before the war even started. When taking a look at her LinkedIn employment history, we see that she’s been employed in London-based companies since 2017 - clearly she does not qualify as one of the “Ukrainians suffering for the war” yet she took $5000 per month from the donated funds for things like rent and personal expenses.
Ukraine DAO also repeatedly stated they were “supported by the Ministry of Digital Transformation of Ukraine” making them “the first DAO to have been endorsed at the state level”. That claim would later be called ‘weird’ when after catching the attention of Ukrainian news outlet Kiev Post, who asked the Ukrainian government about these claims, they were told “The Ministry of Digital Transformation has not endorsed Ukraine DAO” .
However, I should mention that the Ukrainian government was not saying ‘we have no idea who you’re talking about’ - because there is some kind of relationship between the two organizations.
A profile on Alona Shevchenko which highlights her co-founding Ukraine DAO appears on an official Ukrainian government website. But when asked, Oleksandr Bornyakov, Ukraine’s Deputy Minister of the program downplayed its importance only as 1 of nearly 300 pages for volunteers for a program to educate the public on crypto.
Ukrainian News Outlets Claimed "around $700k" - We've Located Approximately $400K Of It...
At today's ETH value it's somewhere closer to $640,300 ‘unaccounted’ for funds, some of which more accurately should be called ‘unexplained’ funds. Because we know where some of that is, we just don’t know why it’s there.
There’s what was sent to individuals - Alona’s $5000 monthly payments to herself is somewhere around $70,000 total now. There was another $34,013 sent to another co-founder of the charity, Matthew Bundy; we can’t imagine why unless donors are now paying his rent too.
Then we don’t know who this was intended for, but another transaction for approximately $155,000 was sent to a wallet controlled by Sam Bankman-Fried’s former exchange FTX shortly before everyone lost access to their funds, as far as we can tell it was still there when that happened.
Lastly, $156,461 still sits in the official wallet of the charity.
The situation is much better thann $700,000 missing, but there's still a total around $200,000 gone from the charity's wallet but not listed as being spent anywhere - which is still too much to go unanswered for.
So, Now What?
Thankfully this isn’t a situation where donations are still flowing into the charity, so even if the worst outcome is true and a large amount of funds were misused, that number isn’t growing, at least from Ukraine DAO.
However, the same group appears to be on to the next cause - launching Iran DAO whose Twitter profile states their goal of “providing resources for Iran’s women-led revolution.”
It began with a Tweet from UkraineDAO stating they are “working to set up IranianDAO.”
In Closing…
It’s important to note that we could only label some Ukrainian funds ‘unaccounted’ for - which is very different than labeling them ‘stolen’. However, I’d like every dollar from their previous charity to be accounted for before even considering supporting a new one.
Or should the funds that ended up in Alona’s hands for personal expenses be considered ‘stolen’? This is a grey area legally. If 100% of the funds were to go to ‘Ukrainians suffering from the war’, she is Ukrainian, and while she only experiences the war via online news and TV from her home in England, perhaps she found the images emotionally distressful, technically making her a ‘Ukrainian suffering from the war’.
Unfortunately I’m struggling to come up with a scenario that ends with these payments to herself turning out to be completely ethical.
I’m confident that no one donated thinking any of their money was going to a Ukrainian, who hasn't lived in Ukraine for years, is one of the people trusted with access to the donated funds, finding a way to put some in her own pocket - technically legal or not.
While the Ukrainian government’s resources are focused elsewhere, there is a group of citizens along with journalists from the Kiev Post who continue to demand full accounting of every donated dollar, as well as question the legality of some of the DAO’s controversial decisions.
They vow that when the war is over they will be pressuring the government to review any potential exploitation by those using their crisis for personal profit.
The story may be far from over, but this is where things stand now.
UkraineDAO was contacted (via Twitter DM) and invited to share any additional information on the topics mentioned here. If they choose to, we will include it with our reporting.
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Author: Ross Davis
Silicon Valley Newsroom
GCP | Breaking Crypto News
