Money Disappearing from Major Charity to Help Ukraine – Is there a Scam?

Contributions from across the world poured in for Ukraine when Russia’s full-scale invasion began in February 2022. Among new organizations launched to raise funds to aid those affected by the invasion was the prominent UkraineDAO. Serious questions have since emerged about how it has operated.

 The initiative was promoted by celebrities such as the Nadia Tolokonnikova of Russian band Pussy Riot, and Ethereum founder Vitalik Buterin, who between Feb. 26 and March 2, auctioned off a Ukrainian flag non-fungible token (NFT), raising $6.8 million.

 UkraineDAO claimed it was supported by the Ukrainian Ministry of Digital Transformation, something that the Deputy Minister firmly denied when speaking to Kyiv Post.

 The group issued commemorative tokens, called $LOVE, to those who donated to their effort. At the time, UkraineDAO indicated that the tokens were issued only to be souvenirs, not to be speculatively bought or sold.

 However, as Kyiv Post has reported, records indicate that over $20 million has passed through $LOVE since its formation last year. Financial experts described daily transactions as having the appearance of being illicit, with more than $40,000 a day being bought and sold, without obvious reasons. On Oct. 20, a transaction of $4.1 million was recorded.

 Within days of the auction, Tolokonnikova left UkraineDAO, alleging that, despite the group’s pledge when she signed up, that “100 percent” of money donated would go to help Ukraine, some of the funds had not been sent, but were rather repurposed as a $5,000 monthly salary for Alona Shevchenko, the leader of UkraineDAO, who has received $67,501 to date from the donated funds.

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 OnlyFans’ owner, Leo Radvinsky, an American businessperson born in Odesa, told Kyiv Post that he, the single largest donor to UkraineDAO, had “donated money to the initiative, as many others did.

 “I do not know the individual [Alona Shevchenko] or the [Ukraine]DAO. The money was supposed to go straight to the people who needed it.”

 On March 14, 2022, 52 ETH (a cryptocurrency native to the Ethereum blockchain), worth $134,700 was sent from UkraineDAO.eth address to an unknown wallet, which transferred the entire amount to Coinbase cryptocurrency exchange. The recipient of this “donation” never used that wallet again. Another 60 ETH ($155,442.00) was transferred to another anonymous wallet that forwarded the entire amount to the FTX exchange, which went bankrupt six months later. Sam Bankman-Fried, FTX founder and CEO was imprisoned one month later.

 In addition to these two transactions, $34,013.64 was sent to a wallet known to have been used by Matthew Bundy, who goes by the alias “Zencephalon” in crypto and NFT related projects, a co-founder of UkraineDAO who is also affiliated with PleasrDAO, an online organization and community that collects NFTs, as was Alona Shevchenko.

 PleasrDAO

 The founders of UkraineDAO have something in common: They are all officers of PleasrDAO.

 A search finds that neither UkraineDAO nor PleasrDAO are listed with the US-based Security and Exchange Commission (SEC). Given Shevchenko is a resident of the UK and is found  in the business registry as director of a company, an inquiry to the British Financial Conduct Authority (FCA) showed that the issuer of $LOVE is not registered with them either.

 According to a 2017 SEC decision, “DAO Tokens” which are sold or bought by a “virtual'' group, such as in the case of UkraineDAO, are considered “securities” per the US’ Securities Exchange Act of 1933 and 1934.

 Kyiv Post can confirm that Shevchenko, UkraineDAO, and PleasrDAO were reported to British authorities by multiple sources. One of Kyiv Post’s readers submitted the following reply from the FCA.

A review of PartyBid, which was used by UkraineDAO for the NFT flag auction fundraiser, indicates that despite multiple donations exceeding hundreds of thousands of dollars, UkraineDAO did not execute the US Treasury Department's Office of Foreign Assets Control (OFAC) screenings, nor implement any standardized Know Your Customer (KYC) or Anti-Money Laundering (AML) procedures that would be expected during the Customer Due Diligence (CDD) process.

 This is despite the fact that some donations were made with “mixers”- blockchain services that obfuscate the origin of funds, such as Tornado Cash, which has since been sanctioned by the US Treasury Department’s Office of Foreign Assets Control (OFAC) due to its use by international criminal entities.

 Cryptocurrency related projects that utilize KYC and AML checks use third-party services to ensure the legality of their business. The PartyBid NFT auction platform does not include such services, nor are there any indications that UkraineDAO used a third-party service to identify the individuals and entities that contributed.

Ms. Shevchenko’s latest crypto DAO project, IranDAO, states they “believe our current mission and vision fall under a number of OFAC exemptions, exceptions, and general licenses. That said, we are now working with lawyers to confirm that all Iran DAO activities are compliant with OFAC regulations.” The wallet of the IranDAO shows a balance of around $2,000 in donations received, with no outgoing transactions.

 PleasrDAO, which rose to fame by raising over $4 million to buy the only existing copy of a Wu-Tang Clan album, in 2021, has a website that, despite PleasrDAO ETH wallet having around $25 million, lists no contact information and only anonymous Twitter accounts for many of the several dozen people who are mentioned as “members'' of the organization. Many of the names listed for those people are aliases, and no legal names are given.

 The US Securities and Exchange Commission does not have a record of any US company by that name or any variation thereof.

 Multiple websites reference PleasrDAO as being located in Princeton, New Jersey. A search of New Jersey’s business and tax authority registry of does not turn-up results for PleasrDAO or any close variant of the name.

 On no website, according to Google searches, does PleasrDAO appear with terms one would expect for a company registered or operating in the US, such as LLC or Inc.

 Prior to starting UkraineDAO, the leaders of PleasrDAO “spearheaded” a number of controversial crypto fundraisers, including FreeRossDAO, to support Silk Road founder Ross Ulbricht, who is currently serving life in prison for having abetted in the international traffic of weapons, narcotics, money laundering, and other crimes. In January 2023, alongside Edward Snowden, who the month before Russian President Vladimir Putin decreed to grant his request of Russian citizenship, PleasrDAO sought to raise money for press freedom.

 UkraineDAO takes pride in having donated the single largest donation to Ukraine’s most prominent charity, Come Back Alive, that amounted to $4 million. The group made a donation to the crypto account owned by the government of Ukraine of around $1 million, as well as 190.94 ETH to Outright International and 4.43 ETH to Psychology for Human Rights organization. These donations were given on March 6 2022, and are listed on the UkraineDAO website.

 After a more thorough look into the UkraineDAO.eth wallet, it turns out that roughly $340,000 worth of ETH sent was to anonymous wallets that cashed out on exchanges, $76,102.35 worth of stablecoins was sent to Coinbase exchange, and $67,500 USD was paid as “salary” to the Ukraine DAO front face Alona Shevchenko. UkraineDAO wallet still holds $212,000 worth of cryptocurrency. This makes a total of around $700,000 that was not given to Ukraine, despite the promise made by UkraineDAO.

 Kyiv Post contacted PleasrDAO, via Twitter direct message, requesting commentary and the contact information for “CryptoSteve'' - a cofounder of UkraineDAO and PleasrDAO, and Matthew Bundy. A Tweet left on CryptoSteve’s timeline, was not responded to. Shevchenko indicated last week that she would not answer the questions that are the basis for this piece.