Both Ukraine and Russia have embraced cryptocurrency. But its wartime utility is unclear.

There is the $400,000 in cryptocurrency donations raised by a Kyiv IT professional to support the Ukrainian army.

There are calls from Western cryptocurrency activists to mobilize on behalf of the Ukrainian people.

And there are fears that Russia could use cryptocurrency to avoid the effects of Western sanctions.

As Russian President Vladimir Putin’s forces mount an invasion against Ukraine, two economies that have led the way in embracing the new form of digital money are each turning to it to gain an edge in the geopolitical showdown. The first major conflict of the crypto era also means that, for the first time, a tool that can move billions of dollars easily across borders is available to be marshaled by both sides.

“Because there is no central controller who can impose their morals on its user, crypto can be used to crowdfund for the Ukrainian army or help Russia evade sanctions,” said Tom Robinson, chief scientist and co-founder at the crypto analytics firm Elliptic. “No one can prevent it from being used in either way.”

But how much it could truly influence the war remains to be seen. Donations of a few hundred thousand dollars in bitcoin, while symbolic, may not mean much for a Ukrainian army that received $650 million in weaponry from the United States last year and is still severely outnumbered.

Russian crypto activity has historically paled in comparison to the transactions processed by its traditional financial institutions. Russian sources collected about $400 million worth of cryptocurrency from ransomware attacks last year, 74 percent of the global revenue from the crime, according to a recent study by Chainalysis, the blockchain data firm. Yet those sums represent only a tiny fraction of the $46 billion in foreign exchange transactions that the U.S. Treasury Department says Russian financial institutions process every day.

“The challenge for the Russian economy and individuals, in this context, is the immaturity of crypto as part of their financial system doesn’t allow them at scale to circumvent the multinational sanctions being imposed,” said Juan Zarate, a former assistant secretary of the Treasury and deputy national security adviser in the George W. Bush administration. “If this were happening five years from now and there was greater infrastructure, adoption, and volume, it might be a different story. But that’s not the current reality.”

Both sides have deep roots in crypto. Chainalysis ranks Ukraine as the top European adopter of cryptocurrency and the fourth biggest in the world. In September, the country legalized crypto after years of murkiness, and its new Ministry of Digital Transformation has released video ads recruiting tech start-ups that could include crypto.

A host of Western crypto activists put out a pro-Ukraine call for donations shortly after Russia launched an attack Thursday. Ryan Selkis, the founder of crypto firm Messari, tweeted, “One of the best things we could do as an industry is figuring out how to support the Ukrainian people and their resistance with crypto contributions.”

Economic sanctions will attempt to slow the advance of Putin’s tanks

Austin Cain, who ran the group of crypto investors that tried to buy the Constitution, asked followers to “rally to save lives in Ukraine. Would love to jam and share ideas … ping me if interested.”

In a message to The Washington Post, Cain said the activists were digitally convening to figure out their next moves.

Late Thursday, Sam Bankman-Fried, chief executive of crypto platform FTX, said on Twitter that “we just gave $25 to each Ukrainian on FTX.” He did not immediately respond to a request for elaboration.

In Ukraine, Vitaliy Deynega, an IT worker in Kyiv who founded a nongovernmental organization called Come Back Alive, has raised $400,000 in cryptocurrency since the war began to buy medical and military supplies for the army, according to Elliptic. Crowdfunding for global causes is not new, but crypto makes it easier to transfer the funds, which are not subject to the same hurdles as traditional bank transfers.

Russia, meanwhile, has established itself as a hub for illicit crypto activity, including ransomware attacks and cryptocurrency-based money laundering, according to Chainalysis. Crypto businesses operating in Moscow City, the financial district of the Russian capital, pocketed $700 million worth of digital assets from entities linked to criminal activity over the last three years, Chainalysis found. That suggests a possible avenue for enterprises seeking to avoid sanctions.

But it is unclear whether it will even be necessary. The sanctions announced by the Biden administration are focused heavily on banks and do not cover energy payments, which means some of Russia’s biggest businesses do not at the moment need to resort to a dark web of crypto payments.

Even if they did, experts say, crypto would not be as inviting a place as it would seem.

“The problem is the off-ramp. You could theoretically move all the payments you want, but until you can buy a burger down the street, there’s not much you can do with the money,” said Nick Furneaux,·managing director at the U.K.-based investigative firm’s tech and author of the book “Investigating Cryptocurrencies.”

In the wake of the Ukraine invasion, Russia’s cyberattacks could go global

And U.S. authorities have demonstrated a growing sophistication in tracking and seizing illicit crypto funds, a fact that could further deter Russian interests looking for ways to evade the wave of new sanctions.

The Justice Department this month announced that they seized $3.6 billion in bitcoin allegedly stolen in a 2016 hack of the crypto exchange Bitfinex. Last summer, the Justice Department recovered $2.3 million worth of bitcoin paid to Eastern European cybercriminals after they shut down the Colonial Pipeline in a ransomware attack that led to fuel shortages on the East Coast.

“The oligarchs have so many well-heeled accountants and complicit bankers around the world, they don’t need to go that way,” said Marshall Billingslea, a former assistant secretary of the Treasury Department during the Trump administration. “And if they’re investing in sound sanctions advisers, they’re being warned that some of these blockchain currencies like bitcoin are not nearly as opaque as they might have thought.”

The Biden administration has been leaning on the crypto industry to take its steps to block and report sanctioned entities. The Treasury Department in October published guidance reminding crypto companies that they are responsible for policing their platforms and that slip-ups could lead to “enforcement actions … and negative impacts on a company’s reputation and business.”

【Cryptocurrency is suddenly everywhere — except in the cash register】

Some Russian figures are also urging more internal oversight of cryptocurrency. In a televised meeting with Putin on Thursday, Alexander Shokhin, the head of the business group the Russian Union of Industrialists and Entrepreneurs, made the case to the Russian leader that for the sake of “minimization of external financial risks,” the government should “institute effective regulation of digital financial assets and cryptocurrency.”

Meanwhile, Coinbase, the largest U.S.-based crypto exchange, said it is making several moves as the crisis in Ukraine unfolds, including blocking IP addresses in sanctioned areas and working with intelligence analysts to monitor “threat actors and their networks,” a company spokesperson said in an emailed statement. “We remain vigilant to ensure we are playing our part and meeting our obligations in the context of this rapidly evolving conflict.”

Elliptic’s Robinson, however, noted creative uses of crypto countries under sanction. He said Iran has been able to put its oil reserves to use by repurposing it to mine energy-intensive crypto, potentially salvaging hundreds of millions of dollars.

“Cryptocurrency mining provides a way for Russia to monetize its oil and gas reserves on the global market even if it isn’t able to physically export them,” he said.

Jeremy B. Merrill and Jeanne Whalen contributed to this report