The Wolf Of All Streets - How Crypto Is Helping Ukraine Fight In War With Russia | Alex Bornyakov

Episode Date: March 29, 2022

Ukraine has had approximately $60M in crypto donated since Russia started its invasion. It shows the incredible power crypto can have when a people and country are most vulnerable. On this episode of The Wolf Of All Streets, Alex Bornyakov (@abornyakov) — The Deputy Minister of Digital Transformation of Ukraine — shares just how crypto is assisting the country during this time of crisis. Alex and Scott discuss what it’s like in Ukraine right now, why the Ukrainian government has been pro-crypto, and how you can help Ukraine today. EPISODE LINKS Alex Bornyakov: https://twitter.com/abornyakov Production & Marketing Team: https://penname.co/ FOLLOW SCOTT MELKER Twitter: https://twitter.com/scottmelker Instagram: https://www.instagram.com/scottmelker Facebook: https://www.facebook.com/wolfofallstreets Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple Podcasts: https://apple.co/3FASB2c

What's up, everybody? I'm Scott Melker, and this is the Wolf of Wall Street's podcast, where two times every week I talk to your favorite personalities from the world to Bitcoin, finance, music, art, sports, politics, basically anyone with a good story to tell. Now, almost a month ago to the day, the world collectively held their breath as Russia did the unthinkable and invaded Ukraine. Now, it seemed that Russia believed it would be a very, very quick war and that they would have very little resistance, but the people of Ukraine have fought like lions, both for their land and for their freedom. And now a month into the conflict, even though it's been a small part, the crypto community

has played a role in supporting Ukraine through $60 million now in donations. Now, one of the people behind facilitating that entire effort is my guest today, who is Alex Bornyakov, the Deputy Minister of Digital Transformation of Ukraine. Alex, it's an honor. Thank you so much for joining me. Hi, everyone. Hi, Scott. So listen, I know you definitely can't talk about your specific location, but I know you are in Ukraine. I would love to hear what it's been like for you over the past month, trying to operate and obviously explosions around 6 a.m. in the morning. And I spent a couple of days in Kiev, but then we decided to evacuate because it was impossible to work. And there was instant shelling and jets flying. So we moved to our safe location. Yes, we are still in Ukraine. And we managed to restore the operations

of the ministry, because we felt that we need to do our best in order to help our country help our people started to get an enormous amount of requests about what what's going to be next. And of course, from the IT industry, from IT experts, from many people that are in digital space. And well, last month was tough, and especially first two weeks, even in the regions far away from the war zone, there are still sirens and people have to go to shelter because the possibility of airstrikes are almost everywhere.

And maybe you heard they launched rockets even to Lviv, which is quite opposite side of Ukraine and killed a lot of people there. And they still continue to send rockets to fire those rockets. So you basically, well, you can be safer in some locations, but you cannot completely be safe in Ukraine today. But still, so many people are staying here trying to do again their best to ensure that they're not going to take over. And there's a lot of people in Western Ukraine. There are problems with gas, with food, with some medicine.

And I think it's going a little bit better it's my personal observation but during the first two weeks it was like nightmare and but then we started we just dropped this and started to fight started to fight back, thanks to, it's also important, thanks to our militaries, because they stopped and it gave us hope. And it was inspiring. But also, the support of international community is also inspiring us to move forward to fight back. And this is what we do now. What is the specific role and job of the ministry? So before the war, we were focusing on countries' digital transformation. So we basically trying to do our best again to move all the government services online, build their state and smartphone. So basically,

you will be able to, you were able to communicate and interact with the government just using your phone and we did a lot of great things we came up with their concept of government application dia which were downloaded by 12 million people of ukraine and there was like digital passport digital digital driver license, digital car insurance, car titles, birth certificates, many other services. And we were on the way to really completely reshape the way government interact with its citizens. Also also we were aiming to teach people digital skills increase the digital literacy of of how people uh cover 95 percent of ukrainian territory with high-speed broadband internet and we had a separate goal which i was in in charge of to build uh the biggest IT hub in Eastern Europe here.

So we were doing a lot of things. One of them, our flagship product is a sort of like special economic zone called DSCD. It's like Silicon Valley in Ukraine. And with low taxes, with so much other benefits for IT companies to incorporate them. And it was a great time. Like every week, some international company were opening R&D center or opening their office in Ukraine. So this is like a real boost in Ukrainian IT industry before the war.

So once the war started, it, of course, has dramatically changed our focus to defend our country, to fight back, and we decided to focus ourselves on a couple of major initiatives. One of them is to, of course, to support our digital infrastructure. Another one is to get our word to Russian citizens through media coverage. So we gathered an IT army and IT army started to spread the truth because we believe that more we talk to Russian people, because they're in sort of a bubble and are under heavy propaganda.

So we wanted to tell them what's really going on. We still continue actually, we still go on. But also to disrupt their digital infrastructure. So 300,000 people joined this IT army. And now we manage this part, manage some other activities. Of course, we still help our IT industry. But it's more like to survive rather than develop like it was before. It seems from the outside that pressure from your government and from your ministry has actually

contributed massively to tech companies removing their services from Russia. Is that true? Yeah, yeah. This is what we call, it's another thing that we started to do after the war. So we dedicated a lot of resources to do what we call digital diplomacy, or some call digital blockade. has to be stopped through economic means because they, like unlike other nations, they don't spend money on the roads, on the building new hospitals, schools, increasing their regular people level of incomes, right? But they build rockets, tanks, bombs, and they just kill their neighbors, basically. So we think that this is not just about Ukraine.

It's also about the safety of all the people in Europe, or maybe even more. And I know this because lately I saw the poll, some survey results that 75% of Russians support invasion to Poland. So we decided we have to do everything so their economy and the companies that work in Russia are not going to pay taxes anymore because they use these taxes to build and create means of war, not for peaceful things. So indeed, it was successful. And I know hundreds of companies already left Russia, and we continue to press on. It's an incredible story. And crypto has played, obviously, a major role in that. I think it was unexpected to see how much the crypto community worldwide came together to start sending donations directly to Ukraine to help. Can you talk about how that came together and how impactful that's been where those funds are being used?

Sure. So it's all started in the first day of war because the National Bank of Ukraine has a very limited ability of people and companies to actually send money, especially abroad. And Mikko Lefard told me, the Minister of Digital Transmission told me like, let's create this crypto fund. And we can, so we would be able to get those money like really quick and be able to also to pay for the things that we need right now. And by that time we felt that we need to give everything to support our militaries with non-lethal means. So we partnered with private exchange.

They set up all these accounts and we announced that we get, we getting, we able to get donations in crypto. And this was really beyond expectations to be fair. We expected to get maybe a couple, I don't know million dollars maybe 10 20 million dollars but eventually so so far we managed to get almost 65 so and then and we continue to add some new tokens and and because people already asking, we can work with our community. We can show that our community want to help. And this was really helpful and it's really helping us. Yeah. I think everybody's sort of famously saw Gavin would tweet all seven,

$5 million. If you had my coin. We really, we really we really appreciated gavin would help because um it was not so hard to first default to create this wallet and transfer it so those money are being spent on on the help on different things like medical supply, food rations, bullet requests, helmets, and many, many other things that we take from Ministry of Defense because obviously they know what really is a priority. And would you say that the money that's being sent via crypto is being put to use faster and it's more efficient than through other means yeah

especially during the first days because during the first day it's just so so much mess it was so hectic everything was just falling apart and maybe you remember they were advancing really fast during the first week and of course with with the such in such circumstances, it's really hard to plan anything. Like, if you want to send wire, and wire is going to get to your supplier in three days, but you honestly don't have three days. Maybe in three days, you're not going to live in this country anymore. So there was tough, tough times. Now we can at least plan short term, but back in the days, it was not possible.

So crypto was really helpful because in 10, 15 minutes, we saw the transaction and it was relatively faster, much faster. I mean, I think it was a world-altering moment, certainly for anyone in the crypto community to see the government of Ukraine tweet out those addresses. Yeah, indeed. I mean, really just incredible. And then to see the outpouring. So before the war, you talked about basically digitizing and modernizing all of your technology.

What you described is so far ahead of what we have in the United States, right? Everything is you talked about basically digitizing and modernizing all of your technology. What you described is so far ahead of what we have in the United States, right? Everything is clunky, our birth certificates, our IDs, none of that is digital. Were you utilizing any blockchain solutions to do that? Not really, but there were a couple of pilot projects um one of them were uh really you were using blockchain in in um in the process of uh um selling confiscated uh goods like our custom or our uh minister of justice can confiscate something and then they have to sell it on the auction. So they've created a blockchain project to be transferring and everyone would have seen that what exactly is selling in which order so because there's a high probability of corruption because it's confiscated so it could be sold for coins you know so they were implementing this but but we were uh once once i i failed to mention that uh when the ministry of digital transformation

was created it was two years with three years and a couple of months before. Almost since the first day of the ministry, we told that crypto legislation is our priority, that we want to become the crypto friendly jurisdiction. So we were working towards crypto laws, passing them through the parliament, which eventually happened. Unfortunately, we finished this process right before the war. It's only the signature of our president, Zelensky, left. But he signed this like a week ago in the war time. So because we believe that, of course, this fund, crypto fund, was the inspiring thing for all of us. So we need to move towards crypto. But it's also because we want to send a strong signal to your international community that once the war is over,

we welcome any crypto company to Ukraine to work in our jurisdiction to incorporate companies here. What gave you the foresight to want to pass those laws? We've seen numerous approaches from nation states, obviously with regard to crypto, anywhere from El Salvador making Bitcoin legal tender to China outright banning it. Clearly you guys have a vision for what you want. You've legalized crypto, one of the first countries really to make a stand and do so.

Is that about wooing foreign companies in to make investments in Ukraine in crypto? Is it about the citizens having access to a superior form of money? What was the reason for it? Well, of course, it's not just one reason. It was about international companies and investments and taxes that Ukraine can get from those types of activities. But also because Ukraine has a huge blockchain community and so many people in Ukraine were using. And according to Chainalysis, we were in 2020, we were top one country in the world, according to them, of crypto adoption index. So there are millions of people of Ukrainians who are using crypto, actually. And we think that this is our duty as government officials to let them do this officially. Like if I'm Ukrainian and there are a couple other millions of Ukrainians

use crypto, so why government can do this legal, make this legal in Ukraine? So this is one of their purposes. And of course we were doing this in close touch with their community. And how was FTX involved in setting all this up? I'm obviously a huge fan of them. I've had Sam Baikman Freed on the show multiple times, but I know that they've been pivotal in setting up the donation platform and other things. Well, I don't know technical details, but we started to talk to them because National Bank wanted to have a bridge. And they set up also a fund to help Ukrainian army and for humanitarian needs. And some people were wanting to donate.

So National Bank proved that they can do that. So they partner with FTX and provided this fiat crypto bridge. So you can send crypto and this money goes directly to a national bank account. So this is just amazing. I mean, this is a really cool example of how government could partner with crypto companies. UO talked about that you had massive adoption of crypto already in Ukraine, and it was very much a part of your future plans. Do you think that with everything that's happened since the war started, the perception of crypto has changed at all in the country for better or worse? Well, I think with the crypto fund, it's definitely changed to a better one, especially from the government side. Because again, we as a minister of digital transformation totally had a vision how we want to move forward with crypto.

But in the same time, Ukraine ukraine is pretty much it's a big country we 40 million people in uh territory is huge um so there are a lot of different government branches and authorities that was skeptic about crypto So we were doing a lot to convince them. And now with Cryptofon and those things, it's became easier. It's relatively easy. I think that's probably not just true in Ukraine. I think that all over the world,

people are seeing how it's being used there. And it's actually making a lot of skeptics come on to Team Crypto, so to speak, which is really inspiring, I think, to see. Are there any massive misconceptions or misinformation that you see coming out that we should know is not true, in general? Well, we're definitely not Nazis or fascists. Like Russian propaganda says, there is no bio or chemical weapon. I'm 100% sure. We're a peaceful nation. We never invaded anyone. And even before, right before the war, quite frankly, we didn't expect it. We hoped till the last moment that it's not going to happen. And our president was saying till the last day that we have no intentions to fight with Russia. So what they're telling is complete lies. Also, they're telling we're bombing and destroying our cities ourselves.

It's total bullshit. We value every life, every people, citizen life, and every piece of Ukraine is very valuable for us. So we have and still have beautiful cities. And I don't know if you were in Ukraine, but for the last couple of years, Ukraine advanced very fast to the country that is, it's a nice country where you want to live. I used to live in the States. And in New York, I moved back. So and I like Kiev. It's amazing. There are a lot of other cities. So what they're telling is complete nonsense. And I think the world should know that. I think most people do. But of course, there are still quite a few people who need convincing. Are you concerned

at all about the narrative of Russia or Russians or oligarchs utilizing crypto to circumvent sanctions? I believe that there could be cases when, if you speak specifically about oligarchs i don't know but what i know is that russian russians using odc and using those different types of exchanges to move up money outside russia and we see those evidences because we track their mass media and social media and they even paused um like instructions on how to get it out money and or transfer from their rubles to u.s dollar or other um like euro or other currencies so i don't, I can't say if it's a massive, but I think they're testing and it depends on the length of this war and sanctions because we waited more time and more time because Russian government

limiting and more limiting their ability to free moving finances free. So with that, with more actions and more actions towards this, crypto will be used more and more. So this is my understanding of what's going to happen. All right. That makes perfect sense that people would try to get their money out of the country. And what you're saying is the social media was telling them how to do it with dollars and euros as much as with crypto. So it's, once again, it's not a crypto problem. It's obviously an issue of people trying to hide their money and move around sanctions, which you would, I guess, naturally assume to happen. Before I let you go,

most important question maybe now is how can we still help you? What can we do from other parts of the world to make sure that you have the support that you need? Well, again, I'm going to say that we really appreciate the support of international community on the government level and on the personal level. We really feel it. And this is really inspiring for us. We definitely need help to our refugees, which we have over 3 million people already left Ukraine. So giving them a job, giving them any assistance would definitely help. We as a government, of course we encourage people to donate but once it's over we welcome everyone to kiev to consider us as as a place where you can conduct business because ukrainian economy definitely would need a boost and is the best place for people to donate in crypto still the addresses supplied by Ukraine government. Yeah, we've released a website called

donate.digitalgov.ua. So there are addresses and available tokens, so everyone can see that. Well, I'm confident that once this is all over and you've won that the crypto community will be coming in droves to Ukraine to operate and invest based on what you were already building even before the war. So I think that that will definitely happen.

I want to thank you so much. Like I said, it's really an honor. I know that your time is extremely valuable. We're all very much pulling for you. So thank you so much for joining. Thank you. Take care. Bye. you