Since Russia launched its unprovoked attack on Ukraine in February, crypto has been part of the story. The conflict has shown the world the potential and the limits of blockchain technology, and also posed hard moral questions for the crypto community and its critics.
The latest example comes via Wired’s renowned cybersecurity reporter, Andy Greenberg, whose latest dispatch recounts the challenge of shutting down crypto donations to Russia’s war machine. Greenberg explores how, despite sanctions, crypto continues to trickle to militias and arms dealers, thanks to rogue exchanges in Russia, China, and India. Forensic accounting shows more than $4 million in crypto has poured in, though the actual number is likely much higher.
For crypto haters, this provides further confirmation of their belief that Bitcoin is only useful for scams and crime—no matter that criminal regimes like Russia do a brisk trade in U.S. dollars, gold, and other “respectable” currencies. Meanwhile, tracing the crypto flowing into Russia has produced some unlikely heroes. Those include Binance, which has a reputation for working outside the law, but in the case of the Ukraine conflict has backed an investigative team that’s helped track illegal donations by monitoring Telegram and the blockchain.
The most unexpected, and frankly troubling, element of the Ukraine conflict, however, is the number of prominent figures on crypto Twitter who are acting as apologists for Vladimir Putin’s barbaric war. In some cases, this has come in the form of calling for the West to stop intervening on Ukraine’s side lest Putin unleash nuclear weapons (an argument that’s defensible but also wrong given that appeasing Putin would only embolden him and other dictators to engage in nuclear blackmail).
Worse are the crypto Twitter voices expressing tacit sympathy for Russia and placing the moral blame on the U.S. and U.K. for backing Ukraine. It’s hard to know if this is a misguided strain of the libertarian philosophy that’s defined the ethos of so many early crypto leaders. Or worse, it’s a simple lust for authoritarianism that drives the crypto-loving Putin sympathizers. Whatever the cause, it’s dismaying to watch large segments of the crypto community—normally so devoted to the idea of human freedom—take to Twitter to side with a barbarous and depraved regime that has been conducting some of the worst war crimes since World War II.
Tomorrow’s newsletter will focus on a less serious topic, but the point here is that Ukraine is holding a mirror to the values of the crypto community—and the sight is often unflattering.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
The mining difficulty for Bitcoin is soaring, largely because of advanced new machines coming online and the end of summer power conservation in Texas leading to less downtime.
In a potential sign of more market trouble, the DeFi lending platform TrueFi said a Korea-based fund had defaulted on a loan—though the amount in question was only $3.4 million.
Since this is crypto, someone parsed Celsius bankruptcy filings and the blockchain to create a “leaderboard” of who lost the most money.
Bitwise CEO Hunter Horsley told Bloomberg TV that “fortunes are made in bear markets” and addressed the recent wave of C-suite turnover in crypto.
Coinbase obtained a license to operate in Singapore—a significant development since the island nation is a key outpost for crypto and has imposed a stricter regulatory regime after the 3AC collapse.
MEME O’ THE MOMENT
This is the web version of Fortune Crypto, a daily newsletter. Sign up here to get it delivered free to your inbox.