Crypto Thrives in War-Torn Ukraine, Sanctioned Russia: Chain Analysis

Ranked 6th and 7th in this year’s Global Cryptocurrency Adoption Index, Ukraine and Russia stand out as key players in the global crypto economy.

According to the latest Chainalysis report shared with CryptoPotato, Russia rose a remarkable six places compared to last year’s ranking. This feat comes amid the ongoing war and intensified sanctions from Russia. Meanwhile, Eastern Europe led the way with $182.44 billion in crypto inflows to Russia, while Ukraine followed with $106.1 billion.

Russia and Ukraine DeFi Growth

Chainalysis found that decentralized exchanges (DEX) in Eastern Europe saw a significant increase in crypto flows, led by Ukraine and Russia.

Across the region, DEX platforms received approximately $149 billion in crypto, with Ukraine’s DEX inflows growing over 160% to $34.9 billion and Russia’s by more than 173%, reaching 58.4 billion dollars. DeFi lending services in Moldova, Hungary and the Czech Republic also saw substantial growth, receiving $11.29 billion in digital assets.

Over the past year, the size of DeFi transactions in Ukraine and Russia reveal two main trends. Ukraine saw a massive 361.49% increase in large institutional transactions, defined as those over $10 million. This cohort drove most of their DeFi activity.

DeFi growth by region. Source: Chainalysis

Russia, along with Belarus, Poland, and Slovakia, also experienced notable growth in DeFi through large institutional transfers.

Ukraine, however, saw a significant increase in large and small retail transactions, with growth of 82.29% and 91.99%, respectively. These smaller transactions suggest grassroots crypto adoption, likely reflecting an effort by investors to use crypto for everyday spending as Ukraine navigates geopolitical challenges and rebounding inflation.

Sanctions fuel growth of Russia’s KYC-free crypto platforms

Homegrown crypto services in Russia have steadily increased in popularity, with substantial inflows from both inside and outside the country. In fact, Chainalysis revealed that web traffic to centralized exchanges has remained flat, but Russian-language non-KYC exchanges experienced a spike in activity last year and have since stabilized.

The increase is likely related to sanctions on Russian banks, which led locals to use these platforms to convert their fiat into cryptocurrency.

Russian CEX vs No KYC Exchanges. Source: Chainalysis SPECIAL OFFER (Sponsored) Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

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