In times of crisis, there is no good; there’s only a best course of action, given the circumstances. Is crypto good in the context of Russia’s invasion of Ukraine? Is it bad? Neutral? It’s a hard question to answer.

Cryptocurrency is now a more mainstream part of the global financial system, which means that — for better or for worse — it’s inevitably a part of international conflict, too. This is on full display as Russian forces invade Ukraine. Some Ukrainians are also turning to crypto as an alternative to Ukrainian financial institutions, which are limiting people’s access to bank accounts and foreign currency. In a scenario where governments are in chaos, it’s difficult to rely on traditional banks, and there’s fear of surveillance. So a relatively anonymous system where no government is involved is appealing.

“The fact that it can’t be frozen, the fact that it can’t be censored, and the fact that it can be used without ID is very, very important,” Alex Gladstein, chief strategy officer at the Human Rights Foundation, told Recode. “And they are why bitcoin is such an important humanitarian tool.”

Millions of dollars in crypto have flowed in to support Ukraine’s army and hacktivist groups. Almost $100 million worth of crypto has been sent to support Ukrainians over the past several weeks, said Alex Bornyakov, Ukraine’s deputy minister of digital transformation, on March 9. The Ukrainian government itself is soliciting donations in crypto and has raised at least $54 million as of March 11. The Ukrainian government has already spent at least $15 million of the crypto it’s received, and has brought on several crypto companies to help, including FTX, Kuna, and a company called Everstake.

The government has also launched a website to centralize its crypto-based fundraising effort. This new website explains that Ukraine is indeed accepting several cryptocurrencies, including bitcoin and the meme-inspired dogecoin, to support its fight against Russia, and that it’s also open to fiat currency donations, too. (“Want to HODL? Send Cash,” the site says.) Because the country’s officials can’t make all the purchases they want using crypto, they sometimes convert some of these donations back into fiat currency to buy supplies.

Just how useful an avenue crypto is for people in crisis or organizations in need of donations is up for debate. You need a relatively sophisticated understanding of technology to use crypto, and if you weren’t already set up for it, the onset of a war might not be the moment to try to do it. Plenty of donations to Ukrainian groups are flowing in just fine using more traditional currencies — though one such group was banned from Patreon because fundraising for military equipment violates the platform’s rules.

“This is not a time for disrupting things. Folks have their lives disrupted already,” said Giulio Coppi, global digital specialist at the Norwegian Refugee Council.

All of the things that make crypto appealing to those under siege apply to those doing the sieging as well. Crypto is often used by bad actors, and could be exploited by Russia to avoid sanctions, which are currently the main weapon being employed by the US and its allies against Russia. Its prevalence in cyberwarfare also means people holding crypto could be a target for cyberattacks, and although one of the main appeals of crypto is that it’s supposed to be anonymous, it isn’t foolproof.

More broadly, cryptocurrencies are quite volatile. While proponents of the crypto space often argue that bitcoin and the like are some sort of “digital gold,” they’ve lost value amid global uncertainty, undercutting the argument that they’re a kind of safe haven. If you imagine a scenario where you take $1,000 out of Ukraine in a cryptocurrency and by the time you’re able to convert it back to cash it’s lost half its value, that’s not ideal. But what if crypto is the easiest way to get money in a crisis? Is it better than nothing at all?

Ukrainians are using crypto — but there are limitations

Right now, at least some Ukrainians escaping the country seem to be taking their crypto with them, which they hope to convert back into fiat currency once they arrive to safety. Others seem to be looking toward crypto as a way to store their wealth as Ukraine’s economy collapses; the country’s central bank suspended electronic cash transfers at the start of the invasion and is blocking Ukrainian citizens from withdrawing foreign currency for many types of transactions. In the last week of February, trading on the Ukrainian crypto platform Kuna reached its highest level since May 2021.

“In Ukraine right now, you can download a bitcoin wallet open source — totally unconnected from your ID — and you can generate an address via a QR code or an alphanumeric string,” Gladstein explained. “You can paste that to me, I can send you $1,000, and it goes through in a few minutes.”

Using crypto in the middle of a crisis isn’t necessarily easy. For one thing, you need an internet connection and a working device. You also need to know how to use crypto, which has a steep learning curve and is something people aren’t going to be able to pick up quickly in moments of crisis. There are thousands of cryptocurrencies, and they don’t all work the same way. Crypto also has to be available to buy: In February, even wealthier Ukrainians were reportedly having trouble buying Tether, a digital currency that’s pegged to the US dollar. And if you’re only converting other assets you own into crypto now, the rest of the financial system needs to be working, too.

“It might work for some people, but they need first to unfreeze their assets, transfer them into digital currency, and then manage to get out [of the country], which is actually the main problem right now,” Coppi said. “And then when they’re out, hope it hasn’t devalued too much.”

That means that for now, crypto might be most helpful to the people who already have it. That could account for millions of people in Ukraine, which has spent the last few years aggressively promoting its own domestic cryptocurrency industry. In February, the country’s parliament passed a law “legalizing” crypto, and Ukraine now ranks fourth in the world in terms of crypto adoption, according to the blockchain research company Chainalysis.

Andriy Andriyenko/SOPA Images/LightRocket via Getty Images

As the conflict continues, supporters of Ukraine are sending even more crypto into the country. On social media sites and platforms like Telegram, people — including leaders of the country’s burgeoning crypto sector — are sharing their crypto wallet addresses and soliciting donations. One NGO supporting the Ukrainian military has reportedly raised several million in cryptocurrency, and groups are using crypto to buy a motley collection of military equipment, medical supplies, and even a facial recognition app. Some of these fundraising efforts have been active for months, but picked up steam in early March.

To be sure, if you’re looking to send crypto to help in Ukraine, it’s important to check if the people on the receiving end want it and are equipped to handle it. Notably, neither the Ukrainian Ministry of Defense nor the National Bank of Ukraine appear to be directly accepting cryptocurrency donations right now.

Other aspects of Ukraine’s crypto fundraising plans are still up in the air. People were initially promised a free digital token in exchange for their crypto, but officials now say that donors will receive an NFT in support of the Ukrainian army instead. Given crypto’s volatility, it’s also worth remembering that the amount of the donation in crypto isn’t set in stone and could drop fast.

“If they don’t ask you for it, don’t send it,” Coppi said.

Russia can also take advantage of crypto

The heroic version of crypto in crisis — one that paints it as an alternative for people in dire situations — obfuscates the darker side of the space. It’s a very pertinent side, in particular, with regard to Russia.

Even before Russia’s invasion of Ukraine, the United States government was worried that cryptocurrencies could dull the impact of economic sanctions. Iran has used bitcoin mining to bypass trade embargoes, according to research from the blockchain analytics firm Elliptic.

Multiple countries have hit Russia with heavy sanctions. In some corners, that’s caused concern that Russia could use crypto to circumvent sanctions and move money undetected. As the New York Times outlines, the Russian government has been developing a digital ruble, and Russia has been building tools to help hide the origins of digital transactions. Basically, if sanctions are meant to keep countries and businesses from dealing with Russia, crypto would be a way to get around them. Michael Parker, a former federal prosecutor, told the Times it would be “naive” to think Russia hadn’t gamed out a scenario where sanctions were imposed and it would have to find alternatives.

Alexander Nemenov/AFP via Getty Images

To avoid this scenario, Mykhailo Fedorov, Ukraine’s vice prime minister and minister of digital transformation, has called for crypto and blockchain platforms to block the addresses of Russian users. The Biden administration is also weighing how it might sanction Russian cryptocurrency assets, and has already urged crypto exchanges to ensure that specific, sanctioned individuals and organizations from Russia aren’t using their platforms. Four senators, including Sens. Elizabeth Warren and Mark Warner, wrote to the Treasury Department earlier this month to ask how crypto is impacting sanctions enforcement.

While cutting off Russia’s access to crypto could have real repercussions for the country — crypto has become increasingly popular in Russia, which is also the world’s third-largest bitcoin miner — it may not be possible. Not all exchanges confirm the identity of their customers, and it’s generally difficult to track the origin of cryptocurrency transactions. Whether a cryptocurrency exchange legally has to comply with sanctions may depend on where they’re registered and where they operate. Many exchanges have rebuffed calls for them to freeze Russian accounts, and others have argued that crypto isn’t a realistic option for people looking to evade sanctions.

Crypto can also be used to fundraise for bad actors. Just as pro-Ukrainian groups have been able to get funding via crypto, so have pro-Russian separatist groups in Ukraine, including in 2014, when Russia invaded and annexed the Crimean Peninsula, said Jess Symington, the head of research at Elliptic. “The pro-Russian groups were particularly active around the 2014 conflict,” she said.

Russia has heavy ties to crypto-linked cybercrimes and illegal activity such as money laundering and ransomware. According to one analysis from Chainalysis, three-quarters of the money made through ransomware attacks in 2021 went to hackers linked to Russia. In January, the Ukrainian government was targeted by a series of cyberattacks that disguised themselves as ransomware that demanded bitcoin, before destroying data on government computers.

“Capital flight by economically distressed Ukrainians, or even Russians, is a very different thing than the Russian state attempting to launder money or evade sanctions,” said Alex Zerden, a former Treasury Department official under the Obama and Trump administrations.

Coppi, from the Norwegian Refugee Council, warned that people putting their money in crypto may become unsuspecting victims in cyberwarfare, and not only in the Russia-Ukraine conflict. “Most conflicts are going to be more and more about cyberwarfare,” he said. “You risk becoming a target.”

That being said, it’s not as though other currencies can’t be used for unsavory activities. “US dollars are used for a lot of really great economic activities,” Zerden said. “It’s also used to buy drugs and weapons and, you know, engage in human trafficking, right?”

Bitcoin maybe isn’t digital gold

One of the big arguments that crypto proponents have long made is that cryptocurrencies have the potential to act as “digital gold.” That means that, unlike fiat currencies, bitcoin can’t be diluted because there’s only going to ever be a set number of bitcoin, and that investing in cryptocurrencies is a way to diversify your portfolio in the face of volatility. Theoretically, that’s supposed to mean that bitcoin is a way to hedge against inflation, or that if the stock market crashes, bitcoin won’t. This theory hasn’t entirely proven to be true. Crypto has shown itself to be super volatile, and it often moves with stocks. The current conflict has highlighted crypto’s volatility.

Bitcoin fell when Russia invaded Ukraine, as did the S&P 500 — it didn’t act differently from major US stocks. And as the S&P 500 rebounded later in the week, so did bitcoin.

“That’s removing the perception that people had that cryptocurrencies could be used as a hedging asset against these kinds of macroeconomic conditions,” said Hugh Harsono, a digital currency researcher.

Still, cryptocurrency advocates say bitcoin can be better than the alternatives — like cash, bank accounts, or other physical assets, like gold or real estate — because it’s beyond the control of any one institution and easily transportable. And while crypto may be volatile, it can be less volatile than some countries’ fiat currencies or markets. Earlier this year, the Turkish lira became more volatile than bitcoin, which prompted some people in Turkey to cash in their fiat currency for bitcoin and Tether.

“You’re worried that bitcoin went down 10 percent today or whatever,” Gladstein, from the Human Rights Foundation, said. “What are your other options for Ukrainians? What are they going to do? Put it in the Ukrainian stock market? Are they going to put it in a house? Are they going to bring the house with them?”

The extent to which people in Russia are turning to crypto right now is unclear. In the days just before and after the invasion, trading between rubles and bitcoin surged on Binance, one of the world’s most popular cryptocurrency exchanges. But data from Chainalysis suggests that crypto activity in rubles in March is lower than what it was at the end of February, and is much lower than its record level. There could still be a lot of crypto in Russia overall, however. While the Russian government has not been as welcoming to crypto as Ukraine, Russian people may have more than $200 billion worth of crypto, according to an estimate from the Kremlin made before Russia invaded Ukraine.

Crypto is a part of war now, like it or not

This isn’t the first time people have turned to crypto amid an international conflict, but it does feel like the first time crypto is front and center, so much so that some have even called Russia’s invasion of Ukraine “the world’s first crypto war.”

This is largely thanks to crypto proponents who have rallied in support of Ukraine and tried to find a role for crypto. The cryptocurrency exchange FTX, for instance, has given the equivalent of $25 to every Ukrainian user on its platform to use as they please, according to its CEO Sam Bankman-Fried. One of the co-founders of the Russian protest band Pussy Riot, ​​Nadya Tolokonnikova, has organized a fundraising effort to sell 10,000 NFTs of the Ukrainian flag. Vitalik Buterin, the Russian-born founder of ethereum, has encouraged people to donate to humanitarian efforts in the country with crypto.

Of course, some of crypto boosters’ efforts to inject the digital assets into a war effort have been a little cringeworthy. It doesn’t really help for a bored ape NFT person to express solidarity with Ukraine. Given the scamminess of parts of the space, it’s also hard to know which projects are actually going to help people in Ukraine and which ones are just money grabs by opportunists.

For now, we don’t know how crypto will shape international conflict, or whether it will ultimately help or hurt. People fleeing war zones might find a unique use for crypto, but they’ll need to figure out how to use it first. There are already plenty of other ways to raise and move money that don’t involve digital currencies. And while crypto may make it easier to sidestep sanctions, countries were evading sanctions long before bitcoin arrived.

What we do know is that bitcoin and other cryptocurrencies are now a real factor in global economies and in conflicts. Whether it’s good or bad in wartime, crypto is doing what its proponents say it does — giving people a way to work outside of traditional financial institutions — and there’s no sign that will change anytime soon.

Update, March 15, 2:30 pm ET: This piece was updated to note that Ukraine’s government has launched a website focused on its cryptocurrency fundraising efforts.

Update, March 7, 1:15 pm ET: This piece was updated to include new information about the role of cryptocurrency in the Russia-Ukraine war and to reference the most recent data available about the Ukrainian government’s crypto fundraising efforts.