Ukraine has canceled a much-hyped crypto "airdrop" to "reward" people who donated cryptocurrency to the country's army amid the Russian invasion, and will issue NFTs instead.
The Ukrainian government has amassed more than $30 million in crypto donations over the past week, and in a surprising move announced an airdrop on Tuesday. "Airdrop confirmed," the official Twitter account for Ukraine's government tweeted on Wednesday morning. "Snapshot will be taken tomorrow, on March 3rd, at 6pm Kyiv time (UTC/GMT +2 hours). Reward to follow!” After the airdrop announcement, Ukraine received millions more dollars in crypto donations, most likely as people piled in to claim the eventual reward.
An airdrop—giving new coins away for free to a large number of people—is most commonly found among buzzy crypto projects that want to kickstart a token or DAO, not a nation and definitely not a nation currently at war. Now, Ukraine has speedrun the entire lifecycle of a crypto project, from the airdrop announcement, to scams that proliferated based on it, to the final cancellation and accusations of being a "rug," which is crypto-lingo for when a project takes people's money based on a promise and then breaks it.
"After careful consideration we decided to cancel airdrop," Ukrainian Minister for Digital Transformation Mykhailo Federov wrote in a tweet on Thursday morning. "Every day there are more and more people willing to help Ukraine to fight back the agression [sic]. Instead, we will announce NFTs to support Ukrainian Armed Forces soon."
"We DO NOT HAVE any plans to issue any fungible tokens," he added.
Some who donated seemed completely fine with the news. After all, everyone was, in theory at least, simply donating money to a cause they believed in. The response from others in crypto was swift and severe, however, and while it seems clear most people are joking around amid the absurdity of the situation, perhaps not everyone is.
"Gotta love it when a nation pulls off a crypto scam rugging millions," the Twitter account for a metaverse real estate project called Valon replied to Federov. "All the scam victims: Feel free to join our ICO & actually start making profit."
"RUG PULL," tweeted another user. "I'd be careful about sending money in Ukraine during these times…"
The airdrop ran into trouble even before the cancellation, due to a scam and the ensuing confusion.
Scammers spoofed a crypto airdrop from Ukraine with a token called WORLD. Leading cryptocurrency trade publication Coindesk wrote an article saying that this was the legitimate Ukraine airdrop, despite it starting hours before the advertised snapshot that would determine who gets the airdrop in the first place. Coindesk later issued a correction—although in Google results, the headline still displays as "Ukraine Begins Airdrop of WORLD Tokens on Ethereum"—but not before another crypto news outlet, Blockworks, advertised the same scam in a tweet. Blockworks later apologized.
The drama began even earlier, immediately after the airdrop was announced. Justin Sun, creator of the Tron cryptocurrency, tweeted at Ukraine that leaving Tron users out of the airdrop would be "UNFAIR" and "UNJUST!" Samson Mow, the architect of El Salvador's Bitcoin Bonds, tweeted, "War is not an excuse to #shitcoin."
An incredible and incredibly confusing moment, both in the history of war and the history of cryptocurrency.