Blockchain Events
Celsius Solicited Ukraine Donations
After Russia invaded Ukraine earlier this year, many digital asset platforms rushed to get the address of the Ukrainian government’s crypto donation wallets out to the public. Celsius took a different approach and set up its own wallets to accept donations. But how much money was given? How much did they give?
Critics say that Celsius executives stole money and made sure that the C-suite got paid before creditors when the company was going bankrupt. But did the money that Celsius raised for Ukraine, which was supposed to help war victims, get to where it was supposed to go?
Critics on Twitter are looking back at Celsius’s efforts to raise money for Ukraine months after it went bankrupt. They say that there’s no proof from on-chain data that the cryptocurrency raised was ever sent to Ukraine.
In the days after Russia invaded Ukraine in February, there were a lot of crypto donations going into the war-torn country.
In less than two weeks, wallets set up by Ukraine’s Ministry of Digital Transformation had received nearly $100 million. Major cryptocurrency exchanges like FTX and Binance told their users how to donate to official wallets, and social media sites worked hard to get rid of scammers’ posts.
Celsius did things in a different way. Instead of telling people to use wallets run by the Ukraine government, it tweeted out the addresses of wallets it controlled and asked for donations through those.
The company tweeted, “To help #Ukraine, @CelsiusNetwork is putting out addresses where you can donate BTC and ETH in a safe and controlled way.”
What Happened to the Crypto
Nansen’s wallet profiler tool shows that all of the ether (ETH) that was sent to that wallet was sent to other wallets that Nansen says are controlled by Celsius.
A spokeswoman for Ukraine’s Ministry of Digital Transformation said she didn’t know that Celsius had given them any ether.
No one knows if Celsius sent cash through a different method, like a wire transfer, or if the cryptocurrency was sent through a different, hard-to-track crypto route or some other way. But some Twitter users who are interested in cryptocurrency are very upset about it.
It’s a bit harder to keep track of Celsius’ bitcoin (BTC) wallets. A Chainalysis representative says that the wallet given is a services wallet that can’t be tracked very well.
It’s hard to track funds through a service wallet because “the way services store and manage funds deposited by users makes further tracing inaccurate,” Chainalysis said in a blog post about the subject. “Only the exchange knows which deposits and withdrawals belong to which customers. This information is kept in the exchange’s order books, which aren’t visible on blockchains or in analysis tools.”
With less than 100 total transactions, the wallet has a low volume. This means that some manual analysis of on-chain data is possible, but its accuracy is limited in some ways.
One of the wallets on the list seems to have given small amounts of bitcoin to the main bitcoin wallet for Ukraine. A donation of $34.59 was made on February 26. Two other donations of $11.40 and $39.31 were also made on that day.
But these transactions took place before Celsius’s tweet asking for donations went live. They could be from people who already use Celsius and have given money to the cause.
After the tweet went out, on-chain data shows that about $53 worth of bitcoin went from Celsius’ second BTC wallet to the Ukraine wallet.
What amount of ether did Celsius get?
Given that Celsius CEO Alex Mashinsky is from Ukraine, it seems likely that he was sincere when the company asked for donations on Twitter.
But many cynical crypto Twitter commenters seemed to disagree, and judging by the number of donations, the campaign wasn’t very successful anyway.
On-chain data shows that less than $100 worth of ether was sent to the wallet after the tweet went out on March 2. Since the wallet was used in Celsius’ operations, most of the transactions were between Celsius’ wallets.
Overall, this was less than 1% of the tokens that came into Celsius’ ERC-20 wallet, which was one of the wallets the company used to handle general business transactions.
Critics of Celsius and Mashinsky have pointed to the fact that Mashinsky and other executives withdrew eight figures from known Celsius wallets as proof that the executives were trying to get rich or at least save their fortunes while the company’s finances were getting worse.
The truth is that this is more like a case of making a big deal out of nothing. From its donation drive, Celsius didn’t get much money, and what little bitcoin it did get, it was sent to Ukraine. The ether stayed in the wallet, but the amount in question is the same as a rounding error. But the company has a bad reputation, and the fact that it chose to use its own wallets instead of well-known Ukrainian wallets gives rise to some conspiracy theories.
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