 Ilya Palasukhin is a co-founder of NIR Protocol and grew up in Kharkiv, Ukraine. A day after the Russian invasion, he joined the Unshane Crypto Fund as a multi-six signer. As a multi-six signer, he and 10 others decide how the fund is spent. In less than a month, the fund has already raised $7 million worth of crypto for humanitarian aid in Ukraine. In this video, we discuss the legalization of crypto in Ukraine, how the Unshane fund is impacting lives, and how the Russian-Ukraine conflict is defining the role of crypto. I'm Jackson Dumont, and this is a Cointelegraph interview. It's great to have you on the show today, and I can't even imagine what you're going through right now. Yeah, thanks for inviting. And yeah, it's been tough. I mean, it's almost three weeks, so... The president of Ukraine recently signed a law which will create a new legal framework for crypto in Ukraine. Can you tell us a bit more about what's going on there? For sure, yeah. So that kind of project being in the works for the past two years. And so that was kind of a huge work by the Ministry of Digital Transformation, which also doing a lot of great things right now. And so right now it was just ratified by the president, so it's kind of active. And so kind of overall, this really means that crypto is like as any other asset, like I mean, the specific rules, how it operates, and like pretty much digital currencies. And it's... I mean, there's a set of specific rules that apply, like what does that mean, how can be held and operated by various entities. And then the kind of... The one condition there is like, is adding this taxation rules on the kind of Ukrainian IRS side. And so then, and they will have actually a interesting kind of forgiveness program where you can declare all your crypto assets, tax them at a very moderate amount, and then this will be fully kind of now above board and going forward into a system. And so in general, like if this kind of horrendous events did not happen, like Ukraine was on a really good track to become kind of huge crypto hub in the world, but especially in Europe, part of the reason why I was like actually spending a lot of more time setting up a lot of kind of near ecosystem there as well. Gotcha, gotcha. So you know, was there a particular reason why they pushed through this legislation right now? Because there's been a lot of talk about how crypto is going to be used to support Ukraine in the conflict, how to circumvent even Russian sanctions possibly. Like the role of crypto in all this is still very unclear. Is the legislation an avenue for Ukraine to receive more aid in the form of crypto? So independent of this legislation, what has happened is that crypto became largest driver for humanitarian help as well as some of the military help for Ukraine. So kind of day one, right? We all like, holy shit, you know, this is happening. What can we do, right? This was like really, I'm sitting in New York. It's like evening, just got a call from my mom saying, you know, like she's hearing explosions seen on the news, you know, the kind of footing, declaring pretty much war to Ukraine. And like, what can I do? And you know, you go first, like look for what are the ways to support the country. What we started doing as well as minutes of digital transformation is setting up crypto addresses which can receive donations. And then even beyond that is then start deploying this capital, right? So we set up the Unchained Fund. So this is kind of eight crypto entrepreneurs from Ukraine as well as a few, like some folks from outside, like founder of Kidcoin as well joined who are kind of on the multi-stake of addresses across all the networks. So obviously near, but also Ethereum, you know, Bitcoin, Harmony, Avalanche. And there's all those networks, obviously, and there's all those networks, right? You can set up, set it up and you can start receiving funds and you can start deploying funds as well. So far, I collected $7 million, already $2.5 million, I deployed the reports, you know, clear transaction history where money are going. You can kind of create like a full system, like an NGO system in days, right, instead of months that would take to create a new nonprofit, set up banks accounts, you know, get all the legal structure, make sure that people can wire money to it without problems, right? Like this crypto, we were able to do it really quickly, half volunteers, half, half, you know, CRM built around that and start deploying capital. And from government to humanitarian need to kind of the existing NGOs, like all of them are using it, crypto community itself became really powerful for us, right? You know, kind of chats with crypto people everywhere in all the cities for helping people, getting resources, you know, getting food, getting protected equipment for the territorial defense, you know, obviously it's really tough time, but at the same time it kind of brought people together in many ways and crypto have been part of this bloodline that was able to kind of continue sounds assistance working. Yeah. I mean, this was the situation that crypto was meant for, right, being able to bypass borders and giving equitable financial access to people in need. So we touched on a lot of stuff just there. So I kind of want to go back and pick apart some of that a little bit. Let's say that I'm Ukrainian. I receive crypto from the Unchained Fund or someone from outside of the country. How do I turn that crypto into food, water, gasoline, as you said? How do I, how do I cash out essentially? Yeah, for sure. I think there have been few routes. One is actually a lot more people are starting to accept crypto. I think actually from the government numbers, they say 40% of their suppliers are willing to take on crypto directly and similarly on the ground, a lot of people are willing to take crypto, especially if you're talking stable coins because obviously Grievna right now is in a little bit unclear situation. Although it's been kind of also really great to see it being reasonably stable, but people are reasonably want to be able to kind of be hedged against like exchange rate risk. And so they're willing to kind of keep you as the T. Actually, as the T is trading at a huge premium right now in Ukraine. And so there is a lot of kind of just natural demand for people to take on crypto. And then even if they don't and for many reasons, right, there still needs to be kind of Grievna payouts to the system. The exchanges that operate in Ukraine are offering Grievna pairs and you're able to withdraw directly to your kind of cards, like David cards, similarly to Binance have been able to do that as well. And so it's actually like relatively straightforward and very quick to move to move and exchange to Grievna and then get it on your card. And so then you can pay this card. There's still some, I would say a lot less, obviously, but like cash cash and exchanges as well that you can operate. Would you say that crypto is sort of becoming a de facto legal tender in Ukraine? I mean, I would say Grievna is still the legal currency, but I would say the crypto adoption have definitely jumped and kind of people are definitely willing and wanting to operate more in it. And I think we'll see, especially after this law, like people will actually going to continue to like ramp up that option. Yeah, because that's kind of the direction it feels like we're heading in for those watching who aren't sure exactly what we're referring to. Think about El Salvador adopting Bitcoin as legal tender. This means that merchants in El Salvador, like clothing shops or grocery stores must accept Bitcoin as a payment. So I mean, to me, when I see this framework and the way you describe the current climate there in Ukraine in regards to crypto, it does seem like we're heading towards that direction of full scale adoption. Would you agree with that? Yeah, I think so. And I think it's definitely the direction that government wanted to go even before this war started. So I think kind of it postpones some other things. And hopefully, you know, we're going to end very soon and we can start rebuilding everything. But I think crypto will become a huge engine for future development of Ukraine. And let's talk about Unchained Fund. So $7 million have already been raised to support Ukrainians. You are one of the signers of the multi-sig wallet. Tell me if I scan the QR code on the website and donate some money to the fund, what avenue does that take? How does it get into the hands of Ukrainians? Yeah, so there are a few routes that kind of has been taking. One is we have kind of screened and whitelisted few existing NGOs, which are deploying capital like this is, you know, helping like specific NGO that helps kids with evacuation and getting them into safe place. Like right now in Europe, there are a few places where the kids have been moved because that NGO needs funding. So being allocated in some funds to that. But then a lot more is because between our network and kind of broader crypto network, there's actually a lot of volunteers on the ground. There's like some friends, some of the near-ecosystem people are on the ground either in territorial defense or helping with kind of supplies, helping with, you know, driving people, like some of, you know, people I work with actually been, you know, driving around, getting people food and water. And so they need funds to kind of acquire this and get the things around. So there's a system built, which allows people to apply, go through a KYC process, push this location as well, because we actually have been getting a bunch of scan as well, and then get funded to get the food, to get the water, to maybe fund, you know, buying some vacation equipment or paying for the vacation of people from really terrible, terrible situations. And then kind of beyond that, starting to explore what are the other ways we can start kind of building up supplies that can be distributed across Ukraine and things like that. So really kind of, it started with like, I would say immediate response type of thing. And now it's starting to become more kind of how do we build out a set of supplies that then can be distributed across Ukraine and build up a little bit of logistics there as well. And you started this fund in February, right? Well, yeah, it was started pretty much like the day after war started. That's incredible that you were able to move so fast to provide aid in that situation. I mean, that's kind of the point is that the reality, like you can start this fund in, you know, in a matter of minutes, and then, you know, you publish the website, you start getting donations, and then you can start distributing them as well, right? So, and so I think like, I have not, I mean, I don't know the exact numbers, but I'm pretty sure this is from like NGO perspective, you know, distributing $2.5 million to like actual direct, you know, like we have hundreds and hundreds of applications. I think over 1600 applications have been processed so far, right? We actually process and pay out 100 applications per day right now, or more, right? And this is like small amounts, small checks, buying food, buying, you know, some equipment, getting this to direct to people, like, you know, we have photos of people who are like getting, you know, food baskets, for example, in Harkief and, you know, people who've been commenting that like they were able to get medicine, like insulin, for example, which is people diabetic, it's huge need. So really like, you know, real people, real stories kind of across, across the whole Ukraine. Thanks for your take on that. Now, the last thing I want to discuss here was about a month ago, the Ukrainian government said that they were going to do an airdrop, and then they announced it was going to be an NFT airdrop, and then nothing happened. Could you explain a little bit more what was going on in that situation? Yeah, so I think they, I mean, to be clear, like they're under a ton of stress, what they're doing, like it's super important, they, you know, renowning IT army, they, you know, protecting the Ukrainian infrastructure, the fact that the Ukrainian infrastructure continues working is, I think, like huge benefit. You know, most of the services are continuing working, you can open companies, you can pay taxes, you can all do all those things, which, you know, you would be like surprised, like the country that, you know, like in the active war is actually has all the stuff working. And so that's really like their main focus, and obviously kind of being present, communicating exactly what's happening with the country, which has been a super important driver. And so my understanding is they all, they wanted to do an NFT, like the airdrop part meant airdrop of NFTs. And that they just like did not explain that correctly, I mean, like Twitter is hard. Yeah, and then, and then I think like at this point, it's just like not the right time, like the goal, the goal for something like this would be to really kind of highlight the people who have contributed to this program, to this crypto donations, right, and kind of pretty much, I mean, not reward in financial way, but actually, you know, highlight that their contribution. And it's just like not, I mean, at least from my perspective, it's not the right time. I think like when the war ends, you know, we can start kind of doing things like that and being kind of, you know, giving credit to people who have supported it. But right now we need to, you know, we need to get this war to stop, right? We need to win it. We need to get people equipped and fully, fully kind of, you know, safe, get people out of the places, etc. And so that I think like everybody's focused on that is on kind of winning the war and keeping people safe. So I'd like to give you the floor now for any final words you have to say to our audience. For sure. Yeah, I think kind of in general, I mean, it's been, it's been a very hard week for all the Ukrainians. So if you know, if you know anyone who is from Ukraine or whose family is from Ukraine, please kind of extend your friendship, your love to them. Like a lot of people have actually really hard time right now. They need your support. That's my kind of word of kindness that you should extend. And you know, support these initiatives. There's a lot of kind of this kind of avenues to support, you know, Ukraine. This is a chain fund, you know, come back alive directly to the Ministry of Digital Transformation, the digital.gov.ua. And then, yeah, I mean, kind of, you can participate in, if you're especially in the European Union, we have launched away from Ukraine, which is important to collect all the volunteer information and all the information for the Ukrainians who have left Ukraine and who are right now kind of displaced and looking for, you know, for a place to stay for, you know, how to set up immigration, where to live, like where to eat, you know, where to send their kids to school, etc. So I know there's a lot of volunteers and we're trying to kind of organize some of this information space for people from Ukraine. So check that out as well. Thank you, Ilya. It's been impressive that we managed to go this entire interview without talking about near. But these are the times that we live in. So I really appreciate you coming on the show and I hope you and your loved ones stay safe. Thank you.