Crypto.com’s Oscars announcement urges donations to Ukraine via crypto. But it is not that simple. – Indigo Buzz
Cryptocurrency is completely useless for donating to Ukraine.
Did you see the cryptocurrency ad that aired during the Oscars?(opens in a new tab) Sunday evening ?
You may have forgotten this as the commercial aired in a world before the slap, so let me refresh your memory.
The announcement was about cryptocurrency exchange, Crypto.com, and its fundraising campaign for Ukraine. Titled ‘The Essentials’, the ad ran through a list of necessities such as bread, medicine, batteries and shelter before finally landing on the word ‘Hope’.
“In Ukraine, the basics are now essential,” says the messaging on the screen. The ad then tells viewers that Crypto.com is “matching donations” to the Red Cross and Red Crescent in order to “alleviate the humanitarian crisis in Ukraine.” Finally, the commercial provides users with an address where they can donate: Crypto.com/donate.
Admittedly, this sounds like a kind message followed by a kind gesture from a major corporation in response to Russia’s ongoing war in Ukraine.
It’s also quite clearly a publicity stunt intended to promote Crypto.com and cryptocurrencies as a whole. For what ? Because cryptocurrency is completely useless for these donations. Don’t take it from me. This is according to Crypto.com’s own FAQ section on its Ukraine donation page:
“Your cryptocurrency donation will be converted to TUSD (or any other cryptocurrency as applicable) after each successful donation to avoid risks of fluctuations in the value of the donated cryptocurrency, and then will be converted from TUSD to EUR after the campaign period,” reads the Crypto.com website.
So essentially Crypto.com will take your donations in the form of any cryptocurrency listed on its exchange and immediately convert it into a stablecoin, a type of cryptocurrency that’s pegged to fiat currency (that’s i.e. the US dollar). The reason is that most cryptocurrencies like Bitcoin and Ether are very volatile and their price fluctuates as well. A $50 crypto donation may not be valued at nearly $50 the next day, hour, or even minutes.
But hold on. This is not the last step Crypto.com will take to get your crypto donation to the Red Cross efforts in Ukraine. Crypto.com continues to note that the converted stablecoin will eventually be converted into euros (i.e. fiat currency) at the end of the campaign before finally being sent to the Red Cross.
Translation: The Red Cross never receives crypto. Crypto.com turns it into fiat currency before sending it to the organization. One could have simply made a donation with his credit or debit card and avoided all the excess transfers and transactions and the waste of energy that occurs(opens in a new tab) when donating via crypto.
To Crypto.com’s credit, the crypto exchange provides a direct payment link to the Red Cross(opens in a new tab) to do just that. However, this option is not promoted to the extent that the crypto payment option is. And there’s an obvious reason for that.
To donate via cryptocurrency (or even via NFT purchase), Crypto.com requires users to be an account with the company. This is definitely a way to expand its user base and possibly retain a percentage of those people as repeat customers. A similar strategy was used by other exchanges like FTX and Kraken when these two companies announced they were sending free cryptocurrency to Ukrainians earlier this month.
Something not mentioned in the ad? More information on these matching donations. On the website, Crypto.com states that they will match up to $1 million. Again, of course, a generous thing to do. But it’s worth proposing that the crypto exchange recently purchased the rights to rebrand the Staples Center name to the Crypto.com arena for $700 million over a 20-year period. The exchange also spent millions – up to $7 million per 30 seconds(opens in a new tab) commercial time – on a Super Bowl commercial this year as well.
Crypto.com said it was waiving “any charges or fees” on donations. According to the exchange, “100% of crypto donations (subject to third-party processing fees) will be forwarded to the Red Cross and Red Crescent to support those affected by the humanitarian crisis in Ukraine and affected countries.” . This is a very good thing and shows that the company will not directly benefit from these donations.
Indigo Buzz reached out to Crypto.com to find out if the waived fee also results in the per-trade spreads, essentially a markup on the price of the crypto trade itself, to ensure that a large portion of an individual’s donation goes at the Red Cross. We will update this post when we get back to you.
Last week, Snopes exposed(opens in a new tab) a fake Facebook advertising campaign carried out by fraudsters posing as Crypto.com. The scam attempted to trick Facebook users into donating cryptocurrency to Ukraine, which in reality would have gone to the scammers. Crypto-related scams have flourished since the Russian invasion of Ukraine began in February. Although this Crypto.com fundraising campaign comes legitimately from the official exchange, it is clear that there are many good reasons for asking people to be uncomfortable donating via cryptocurrency. .
Readers can donate directly to the Red Cross(opens in a new tab) or check out Indigo Buzz’s list of other legitimate charities focused on helping refugees fleeing Ukraine.
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