Crypto-'Charity' for Ukraine Raises a Trove of Unanswered Questions

UkraineDAO, which broke records using crypto to sell one of the most expensive NFTs ever, to fundraise for Ukraine, has come under tighter scrutiny recently, after Ukrainian Deputy Minister of Digital Transformation Alex Bornyakov refuted the group’s claim of being “government endorsed.” Questions remain as to how funds were used – some of which appear unaccounted for.

The charity, which made headlines by raising over $6.8 million for Ukrainian causes via the use of cryptocurrency, had initially boasted of being “endorsed” by the Ukrainian government – something that Ukrainian officials have flatly denied. UkraineDAO has now caught the attention of foreign authorities, including the British Financial Conduct Authority which stated that “it may be a scam.”

Interviews conducted with several of the originators of UkraineDAO give conflicting reports as to how UkraineDAO was founded, and what objectives the organization may have had. Multiple sources close to the foundation of UkraineDAO told Kyiv Post that there was no strategy for the creation of the commemorative tokens called $LOVE, which caused alarm among some participants.

Kyiv Post has earlier reported about trades of more than $40,000 per day, every day, and with a total of more than $20 million in the past year, in a pattern that crypto experts said did not fit the profile of normal trading.

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According to the accounts of several of the people who were involved with the foundation of UkraineDAO, the organization was primarily brought to life by Pussy Riot frontwoman Nadya Tolokonnikova. A Russian opposition activist and staunch opponent of Vladimir Putin, she used her contacts to bring other well-known figures, such as Vitalik Buterin, the founder of Ethereum, to join the UkraineDAO effort.

The UkraineDAO website, however, tells a different foundational story – listing only Alona Shevchenko, “Crypto Steve” and Matthew Bundy, who goes by “Zencephalon,” all of whom were involved in PleasrDAO, as being the “co-founders.”

Kyiv Post was unable to locate UkraineDAO’s registration as a charity or corporation in any country in which it has fundraised or in which it has operated.

According to statements made by Tolokonnikova around the time of her departure from UkraineDAO, the use of funds to give Shevchenko a monthly salary of $5,000, was a point of contention, as the charity had publicly promised that 100% of funds would be spent to help Ukraine.

Tolokonnikova’s departure correlates to the official UkraineDAO.eth wallet that shows that early participants, including her, were removed as transaction signers after the initial funds’ distribution on March 6, 2022.

Tweets by Pussy Riot, now deleted from Twitter

Some who were involved in the foundation of UkraineDAO expressed hope that Bundy, “Crypto Steve,” and Shevchenko would send the money that they currently have to Ukraine to help people, rather than to pay Shevchenko’s salary.

When Bundy was asked by Kyiv Post if $5,000 per month for Shevchenko to be the “organizational lead,” might be excessive given that Ukrainian soldiers in the trenches, medics caring for wounded warriors, or even President Zelensky make less than $5,000 a month, Bundy demurred, stating: “How the Ukrainian government chooses to compensate its employees is up to them to decide. I didn’t decide Alona’s salary, the DAO voted for it.”

News website Web 3 is Great has reported that UkraineDAO did not allow all members to vote on the distribution of funds, and it was possible for only two of the five leaders of the organization to vote on how money – such as Shevchenko’s salary – would be distributed.

Bundy explained that “It didn’t sound unreasonable to me for someone living in London, and it certainly came as a pay-cut compared to her previous jobs, especially considering the hours that she works,” which according to Bundy was 16 hours a day, and that Shevchenko had never “asked for a stipend or salary.”

It is unclear what Shevchenko currently does as UkraineDAO’s “organizational lead,” however Shevchenko has claimed that UkraineDAO is now dedicated to, among other things, fighting Russian disinformation, to which ends it created a “Russian assets” list.

The potpourri list of “Russian Assets,” which theoretically names alleged allies of Russia’s narratives about the war in Ukraine, includes organizations and people such as former partner Pussy Riot, Reuters, EuroNews, Bellingcat, the New York Times, and Pope Francis. The list does include some Russian citizens; however, they are a small minority compared to the number of Americans, Europeans, and Ukrainians who are listed on the website.

Bundy was asked by Kyiv Post if perhaps the fundraised monies could better be spent on Ukraine’s urgent needs, which the “charity” had advertised as the purpose of its fundraising, asking that since “a Ukrainian soldier fighting in the trenches receives around $315 a month, a medic taking care of wounded soldiers in the combat zone receives $325 a month, President Zelenskyy receives $1100 USD for his work,” in that context – could the money perhaps a salary of $5,000 per month for Shevchenko be perceived as excessive?

Bundy retorted that “It’s not really clear to me that 5k a month will do a lot more for Ukraine if it goes somewhere besides supporting Alona.” However, he said that he was open to people making proposals to recommend a “high impact place to send money.”

Bundy told Kyiv Post that the money going to Shevchenko was fundraised from outside the initial auction that UkraineDAO held to raise money for Ukraine, and thus could be distributed via extraordinary grants, or as salary, and did not fall under the promise of being “100 percent” used for charitable purposes, a view that was contested by others who were involved with the creation of UkraineDAO.

Seeking clarification as to whether UkraineDAO’s alleged donations were used by the recipient charities as intended, Kyiv Post reached out to a number of the alleged recipients, seeking comment as to how the donated money was used.

Come Back Alive, a major Ukrainian, government-backed charity, that has raised tens of millions of dollars, was approached by Kyiv Post with requests for clarification on financial transactions, which some analysts had flagged as questionable. An email response said that CBA’s “specialists are very busy and, unfortunately, [CBA] will not be able to help” in clarifying its finances.

A report by Global Crypto Press indicated that they were able to identify where roughly $400,000 of the missing funds were located. However, the question is why they are located not in Ukrainian charities but in other wallets, including $155,000 which was sent to an FTX wallet. FTX went bankrupt, and its founder Sam Bankman-Fried is facing criminal prosecution for wire fraud and other financial crimes.

An investigation into UkraineDAO by Ross Davis for Global Crypto Press concluded that “I’m struggling to come up with a scenario that ends with these payments to herself [Shevchenko] turning out to be completely ethical” stating that “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.”

Alona Shevchenko declined to answer the questions that Kyiv Post twice sent her. “Crypto Steve” and PleasrDAO did not respond to attempts to reach them. As this article went to press, none of the charities to whom UkraineDAO donated had responded to requests for comment with the exception of Come Back Alive – which declined.