Ukrainian crypto firm Everstake has denied allegations that its platform was used to launder the now-defunct FTX’s money.
Everstake CEO Sergey Vasylchuk said the rumors were “fake news based on made-up assumptions.” According to him, this could be Russian propaganda because it started to lose against the Ukrainian military.
“This time, they decided to use the collapse of FTX to spin yet another tale about money laundering,” Vasylchuk said. “It is obvious that Western support of Ukraine hurts Russia as it leads to its losses on the battlefield. We know for a fact that every donation was spent for the benefit of Ukraine.”
A fundraising crypto foundation @_AidForUkraine used @FTX_Official to convert crypto donations into fiat in March. Ukraine's gov never invested any funds into FTX. The whole narrative that Ukraine allegedly invested in FTX, who donated money to Democrats is nonsense, frankly 🤦♂️
— Alex Bornyakov (@abornyakov) November 14, 2022
Everstake was among the Ukrainian crypto companies that partnered with the Ukrainian government and FTX to launch a donation website, Aid for Ukraine, at the start of the Ukraine War in March.
The campaign managed to amass approximately $60 million in crypto and fiats. In addition to funding the military, the donation was also used to provide humanitarian assistance to Ukraine citizens.
Following FTX’s bankruptcy and the revelation of the crypto exchange’s misuse of customer funds, rumors began circulating about the final destination of that campaign donation. There were allegations that the funds had been sent to the United States Democratic Party. U.S. Rep. Madison Cawthorn of North Carolina, a Republican, has publicly addressed this rumor to his followers.
The rumors gained more support after FTX founder Samuel Bankman-Fried admitted to being a “significant donor” in the U.S. midterm elections, with most of his funds going to Democratic candidates. Governor candidate Beto O’Rourke, who lost a race in Texas against incumbent Republican Gov. Greg Abbott, reportedly returned a $1 million donation from Bankman-Fried before the election.
.@BlockFi, the latest casualty in the @FTX_Official collapse, is making its first appearance in bankruptcy court.@nikhileshde discusses what we know so far and what to expect from the first day of hearings, presented by @trondao: https://t.co/Utb30fPccB pic.twitter.com/BiMFQDIDLW
— CoinDesk (@CoinDesk) November 29, 2022
The crypto company pointed out that Ukrainian Deputy Prime Minister Mykhailo Fedorov had reported the fund use last August. Most of the donations went toward equipment for the military.
Everstake also claimed that Aid for Ukraine only used FTX’s platform “a few times” back in March to convert crypto tokens to fiat. When FTX declared bankruptcy, Aid for Ukraine no longer had funds reserved in the exchange.
Donations made to Aid for Ukraine have reduced significantly in recent months, according to Vasylchuk. Crypto users and other donors can donate via several organizations these days.
According to Vasylchuk, the Ukrainian government had to respond to “serious” inquiries regarding the online rumor. The CEO guessed that the recent turbulence in Twitter further exacerbated the development of conspiracy theories on the platform. He expressed concerns that people could be misled by false information on social media.
Meanwhile, Bankman-Fried also addressed the rumors during an interview with Tiffany Fong on November 16. The former FTX CEO said he wished he “could have pulled that off.”
Bankman-Fried addresses FTX issues
FTX announced bankruptcy earlier this month after days of liquidity crunch. Many investors began to withdraw their funds as the distrust toward the exchange’s financial health continued to diminish. It turned out that FTX was not able to handle a large liquidity demand and had to halt withdrawals.
During his interview with Fong, Bankman-Fried talked about allegations that he had used FTX’s customer funds for his trading company, Alameda Research. He said he should have known “what a hyper-correlated cross-scenario looks like.” He admitted that FTX did not have an expert who monitored risk positions.
Bankman-Fried also discussed customer refunds. He said the chance for international customers to recover their money was “slim,” while U.S. customers would likely get their money back.