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Ukraine ditches crypto fundraising plans and turns to NFTs for salvation instead

March 3, 2022, 6:02 PM UTC

The Ukrainian government said it would give out free tokens in an “airdrop” of newly created crypto assets to reward those who had donated to the country. But less than 12 hours later, it canceled the plan. 

NFTs are the focus of its new fundraising strategy as Russian missiles bombard Ukrainian cities.

The government announced the airdrop through a tweet early Thursday, saying it was confirmed for Thursday at 6 p.m. local time. An airdrop is a promotional tool usually used to increase adoption of a new cryptocurrency or blockchain product and involves transferring cryptocurrency directly to people’s crypto wallets. Users may be asked to complete a task like following a social media account to receive the free crypto. 

The airdrop announcement prompted thousands of small donations—ranging from 0.0001 Ether to 0.01 Ether (approximately 30 cents to $30)—to pour into the Ukrainian government’s official Ethereum wallet, according to CoinDesk.

On Thursday, Ukrainian Vice Prime Minister Mykhailo Fedorov said on his verified Twitter account that the airdrop was canceled. Instead, Fedorov said, the government would be releasing NFTs to support Ukrainian armed forces defending the country following Russia’s invasion last week.

“We DO NOT HAVE any plans to issue any fungible tokens,” Fedorov tweeted on Thursday.

Before Fedorov’s tweet on Thursday, a scammer sent free “Peaceful World” tokens to wallets in a way that made it seem as if the Ukrainian government’s official Ethereum wallet had sent them, according to crypto outlet The <em>Block</em>. The tokens reached $500,000 in trading volume on crypto exchange Uniswap Thursday, according to The Block, as some believed the government’s airdrop had taken place earlier than expected. Etherscan, which tracks blockchain transactions, later labeled the Peaceful World tokens as spam, according to CoinDesk.

Ukraine is not the first government to plan a cryptocurrency airdrop. After it made Bitcoin legal tender last year, El Salvador offered its citizens $30 in Bitcoin if they downloaded the state’s cryptocurrency wallet.

Following Russia’s invasion of Ukraine last week, crypto has become a tool for the government to quickly receive donations from supporters worldwide. On its official Twitter account, the Ukrainian government posted wallet addresses to receive crypto donations in Bitcoin, Ether, and the stablecoin USDT, which is tied to the value of the U.S. dollar.

On Monday, Gavin Wood, a cofounder of Ethereum and creator of the Polkadot blockchain, donated $5 million in Polkadot’s native cryptocurrency to support Ukraine, according to a tweet from Fedorov. Ukraine has received $30 million in crypto donations since it started accepting them last Friday, according to Fedorov’s most recent Telegram update.

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