Everstake, a Ukraine-based cryptocurrency firm, has been caught in the crosshairs of a controversial relationship involving Kyiv, Democrats, and the beleaguered FTX exchange that has captured the attention of Washington officials.
As part of efforts to generate more funds for the war effort, the Ukrainian government launched “Aid for Ukraine,” a website that accepted cryptocurrency donations that would be converted into fiat money and then deposited at the National Bank of Ukraine. The contributions would be used to purchase a wide range of essential items, from medical supplies to military clothing.
The Ministry of Digital Transformation partnered with FTX, Ukraine’s Kuna exchange, and Everstake to help facilitate crypto-denominated donations, which have totaled between $60 million and $100 million.
Because of former FTX CEO Sam Bankman-Fried’s immense donations to Democrat lawmakers and the timing between the creation of the fund and President Joe Biden’s billions in financial and military assistance to Kyiv, there has been speculation of wrongdoing. Critics allege that Ukraine invested in FTX to funnel money to the Democratic Party.
According to Everstake CEO Sergey Vasylchuk, it is a ridiculous assertion to think that the Ukrainian government would invest in private companies at a time of war and utilize critical resources for political payoffs, noting that Kyiv is “investing in the needs of families” with the aid it receives.
“Technically, the Ministry of Digital Transformation mostly supported the information point of view,” he told The Epoch Times, adding that it was chaotic in the early days of the war, requiring the use of backups to receive funds.
“It was messed up at the time,” the head of the staking service platform noted. “I never felt this was like a wonderful cheat. For me, when they say Ukraine invests in companies, I just ignore it.”
Vasylchuk confirmed that he was never in contact with Bankman-Fried during the process, explaining that FTX maintained only a small role in the fundraising effort.
“We have six people who were part of the compliance legal team” who helped get the Aid for Ukraine project off the ground, Vasylchuk averred.
Sergey Vasylchuk, CEO of Everstake, a Ukraine-based cryptocurrency firm. (Courtesy of Everstake)
Crypto has turned into a vital tool in the military conflict in Eastern Europe.
In recent months, pro-Russia organizations have been accepting donations through cryptocurrency exchanges, raising millions of dollars in digital currencies that are then used to support Moscow’s military campaign.
In the aftermath of the FTX collapse, there have been widespread concerns this would trigger a contagion effect. Cryptocurrency prices have plummeted, crypto-related firms have tumbled, and many parties that have been exposed to Bankman-Fried’s empire have experienced financial pressures.
But Vasylchuk says that Everstake is weathering the storm because it maintains diversified assets and, depending on a treasure trove of web reports, the company uses various wallets to ensure the safety and security of its holdings.
Ukraine officials have also addressed the recent allegations, including Deputy Minister of Digital Transformation Oleksandr Bornyakov, who described the latest rumors as “nonsense.”
“A fundraising crypto foundation @_AidForUkraine used @FTX_Official to convert crypto donations into fiat in March. Ukraine’s gov never invested any funds into FTX. The whole narrative that Ukraine allegedly invested in FTX, who donated money to Democrats is nonsense, frankly,” he wrote in a tweet last week.
Aid for Ukraine was recently taken down and replaced with “UNITED24.”
“UNITED24 was launched by the president of Ukraine, Volodymyr Zelensky, as the main venue for collecting charitable donations in support of Ukraine. Funds will be transferred to the official accounts of the National Bank of Ukraine and allocated by assigned ministries to cover the most pressing needs,” the new website states.
The website also informed visitors that “we are looking for companies or enterprises that can help Ukraine with specific needs.”
Ukrainian President Volodymyr Zelensky during a meeting with the U.S. secretary of state in Kyiv on Sept. 8, 2022. (Genya Savilov/POOL/AFP via Getty Images)
Washington Probing FTX-Ukraine Connections
A growing number of U.S. officials are not convinced by these explanations.
In a letter to Secretary of State Antony Blinken, several House Republicans, led by Rep. Troy Nehls (R-Texas), wrote that it had recently come to their “attention that billions of taxpayer dollars sent to Ukraine to assist with their war efforts were potentially invested in a crypto exchange that then made massive donations to Democrats” during the 2022 midterm election campaign.
“While this partnership was touted as a way to assist Ukraine in cashing out crypto donations for ammunition and humanitarian aid, we have serious concerns that the Ukrainian government may have invested portions of the nearly $66 billion of U.S. economic assistance into FTX to keep Democrats in power—and keep the money coming in,” the lawmakers explained in a letter (pdf) exclusively obtained by FOX Business.
“We sincerely hope the primary driver behind the billions in congressional assistance to Ukraine was not Democrats attempting to keep themselves in power, and that none of the missing funds were used as a passthrough to avoid campaign finance laws or end up in Democrat pockets.”
A State Department spokesperson told the business news network that there is “no reason to believe that these reports are anything but pure falsehoods and misinformation.”
The House Financial Services Committee, led by Reps. Patrick McHenry (R-N.C.) and Maxine Waters (D-Calif.), announced a bipartisan hearing into the FTX debacle and what it could mean for the digital asset economy. The committee plans to hear from Bankman-Fried and individuals involved in Alameda Research, Binance, and FTX.
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