Your Guide to Donating Crypto to Ukraine | Money

when russia began to invade ukraine, the ukrainian government asked the world for help in the form of cryptocurrencies. since then, crypto investors have donated more than $59 million to the cause, according to blockchain analytics firm elliptic.

Some are calling the conflict between Russia and Ukraine the world’s first crypto war, as Ukraine has amassed a lot of digital aid and also because of concerns that Russia uses cryptocurrencies to evade sanctions. Ukraine ranks fourth in the world in terms of cryptocurrency adoption, according to blockchain chainalysis research firm Recode reports, and the country currently accepts donations of bitcoin, ethereum, tether, and dogecoin.

Reading: Donate bitcoin to ukraine

Last week, Ukrainian Deputy Prime Minister Mykhailo Fedorov announced aidforukraine, a collaboration between Ukrainian government agencies, cryptocurrency firm everstake, and blockchain platform solana. What’s more, Binance, the leading cryptocurrency exchange, announced that it has donated more than $10 million to its Ukraine Emergency Relief Fund. According to the Binance website, the money will support intergovernmental organizations and local NGOs that will provide food, fuel, and supplies to refugees and children. You can donate to this Ukraine relief fund through the Binance charity platform. it currently accepts binance coin, binance usd (a type of stablecoin or cryptocurrency whose value in this case is pegged to the US dollar), bitcoin, and ethereum.

this is what you should know about donating cryptocurrencies to support ukraine.

what us charities are supporting ukraine?

If you have crypto to donate, you can give it to us. and international charities supporting Ukraine through the Donation Bloc, an organization that vets nonprofits and helps them create secure platforms that accept crypto donations. It recently launched the Ukraine Emergency Response Fund, which supports a network of charities that drive humanitarian efforts in the country, including Save the Children, Food for Life Global-Americas and the International Medical Corps. The donation block says that the Ukraine fund is a 501(c)3 fund run by a Renaissance charity. Americans who donate to 501(c)3 charities may be eligible for tax benefits (more on this later). You can donate directly to the fund or to individual charities within the fund, all of which are designated 501(c)3 organizations. the fund currently accepts more than 70 cryptocurrencies, including bitcoin and ethereum.

When you make a donation through the donation block platform, you can request a tax receipt for the transaction. If you are eligible for tax exemptions, you can use this to claim them when you file your taxes.

how to donate cryptocurrencies to ukraine

If you already own cryptocurrency, you can use your crypto wallet account to send a designated amount of the coin directly to the crypto address of an accredited non-profit organization or the Ukrainian government. in most cases, it will take a few simple steps. click “withdraw”, choose the currency and amount, and enter the receiving crypto wallet address. some organizations may also have qr codes on their official sites that you can link to your crypto wallet.

See also: How to Accept Bitcoin Payments with BitcoinPay

however, some potential donors may be at a disadvantage here. robinhood is an example of an investment app that allows you to buy cryptocurrencies, but does not currently allow you to move your cryptocurrency outside of its platform. additionally, some exchanges charge fees for transferring cryptocurrencies to external crypto wallet addresses.

but be careful if you decide to sell your crypto through an app like robinhood and then use the cash to buy more crypto through a different source to donate. if you sold your cryptocurrency for a profit, you may owe capital gains tax.

how to avoid scams

While a humanitarian crisis can open people’s hearts and wallets, it also opens the door for cybercriminals. To avoid scams, the best thing you can do is do extensive research on the organizations you plan to support.

but even the usual due diligence is not enough when you are donating cryptocurrency. You also need to make sure that you are donating your crypto to the correct wallet address. An effective way to verify a wallet address is to visit the organization’s official website or call to confirm where it posts its crypto wallet address, says David Weisberger, CEO of Coinroutes, an algorithmic trading platform for buying and selling cryptocurrencies. . from there, he says that you should always copy and paste the address into the recipient field in your digital wallet.

The Giving Block co-founder, Pat Duffy, says donors should beware of donation links on social media and non-official non-profit websites. Cyber ​​thieves may flock to social media claiming they are collecting cryptocurrency donations for a legitimate nonprofit, but share cryptocurrency wallet addresses on their own accounts.

One way to check if a nonprofit’s social media post is legitimate is to check that the account is verified. On Twitter, this is indicated by a small blue check mark on the account page. emails should be taken with caution as it is easy to create malicious emails that appear to come from a legitimate non-profit organization. you must ensure that the sender’s email address matches the organization. And most experts suggest that requests for phone calls or texts are red flags, especially if you don’t have a prior relationship with the organization.

better business bureau compiled a list of bbb-accredited non-profit organizations currently operating in ukraine. these include save the children, catholic relief services and global donations.

beware of people claiming to be stuck in ukraine and need help. Avast, a global cybersecurity company, recently released a report stating that the company tracked down a handful of cybercriminals posing as Ukrainians in need on Twitter. therefore, unless you know the person and can confirm that you are donating to their crypto wallet, it is best to avoid this.

See also: Texas Republicans want to make the state the center of the cryptocurrency universe | The Texas Tribune

avast warns that you should be aware of the immediate mention of bitcoin, as well as social media profile names that consist only of letters and numbers. the cybersecurity company suggests never donating cryptocurrency directly to strangers, as it’s “virtually impossible to tell if it’s a person in need or a scammer.” instead, they suggest that you donate crypto only to reputable organizations and initiate the transaction directly on their official website. tomáš foltýn of global digital security company eset tells yahoo! news that the company’s investigative team found a “cluster” of fraudulent websites claiming to support humanitarian efforts in ukraine.

tax implications of donating cryptocurrencies to ukraine

When you sell your crypto for more than you bought it for, you may owe capital gains tax on the gains. The capital gains tax rate typically ranges from 0% to 37%, depending on your income and how long you’ve owned the cryptocurrency. (Short-term capital gains on assets held for one year or less are taxed at ordinary income tax rates.) But if you donate the appreciated cryptocurrency to a 501(c)3 charity, you can usually avoid capital gains tax.

And if you itemize your taxes, you may get a second tax benefit, says Daniel Rodriguez, a licensed investment trustee and chief operating officer of Hill Estate Strategies, a wealth management firm in Richmond, Virginia. If you have had your cryptocurrency appreciated for more than a year, you can generally deduct the fair market value of your cryptocurrency donation at the time of the donation (up to 30% of your adjusted gross income) when you file your taxes. if she has had it for less than a year before donating it, she can generally deduct the price she originally bought the crypto for, rather than the appreciated value.

eric bronnenkant, head of improvement taxes at digital investment adviser, recommends that you avoid directly donating cryptocurrencies that have decreased in value since you first bought them. instead, he recommends that he sell the cryptocurrency and donate the cash. Doing so may help him take a loss to offset any future capital gains taxes he may owe, and he may receive a tax deduction for his cash contribution if he itemizes.

but note that these tax benefits generally apply to the us. uu. taxpayers who donate to 501(c)3 charities. therefore, donating crypto directly to Ukrainian government-operated wallets will generally make you ineligible for tax exemptions.

more for the money

5 Best Crypto Wallets of 2022

the war in ukraine is rattling markets and undermining a key case for bitcoin

what russian sanctions could mean for us inflation. uu.

See also: How Long Does a Bitcoin Transaction Take? Bitcoin Unconfirmed Transactions

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button