Celsius Once Solicited Donations for Ukraine. Here’s What Happened Next

Celsius Network executives, in the throes of a bankruptcy proceeding, are accused by critics of siphoning off money and ensuring that the C-suite gets a payout before creditors. But when it comes to Celsius’ fundraising campaign for Ukraine, did the funds – intended to help victims of war – make it to the right place?

Months after Celsius’ bankruptcy filing, critics on Twitter are reexamining the digital asset lender’s efforts to solicit donations on behalf of Ukraine. They argue there’s no evidence from on-chain data that the cryptocurrency collected was ever passed along.

However, after a look at the data, it appears Celsius didn’t receive a material amount of funds from its donation drive, and what little bitcoin it did get it sent on to Ukraine.

The timeline

In the days following Russia’s invasion of Ukraine in February, crypto donations flowed rapidly into the war-torn country.

In less than two weeks, nearly $100 million had made its way to wallets set up by Ukraine’s Ministry of Digital Transformation. Major crypto exchanges including FTX and Binance provided directions for their users on how to donate to official wallets, and social media platforms worked hard to stamp out posts from scammers.

Celsius took a different approach. Instead of directing users to official Ukraine government-run wallets, it tweeted out addresses for wallets that it controlled, and solicited donations by way of those wallets.

“To help #Ukraine, @CelsiusNetwork is publishing addresses where you can donate BTC and ETH in a safe and controlled way,” the company tweeted.

Where the crypto went

According to Nansen’s wallet profiler tool, all ether (ETH) sent to that wallet was passed on to further wallets that Nansen says are controlled by Celsius.

A spokesperson for Ukraine’s Ministry of Digital Transformation said that she wasn’t aware of any ether donations received from Celsius.

It’s unknown whether Celsius made a cash donation via other means, such as a wire transfer, or if the cryptocurrency was passed along via an alternative not-easy-to-track crypto route or some other channel. But the matter has caused an outcry on Twitter among some crypto-focused users.

Celsius didn’t respond to a request for comment by CoinDesk sent to its press email.

Tracking Celsius’ bitcoin (BTC) wallets is a bit more complex. A representative for Chainalysis says that the provided wallet is a services wallet, and it can’t be effectively traced.

It’s difficult to trace funds through a services wallet “because the way that services store and manage funds deposited by users inherently makes further tracing inaccurate,” Chainalysis said in a blog post on the topic. “Only the exchange itself knows which deposits and withdrawals are associated with specific customers, and that information is kept in the exchange’s order books, which aren’t visible on blockchains or in analysis tools.”

As the wallet has low volume, with less than 100 total transactions, some manual analysis of on-chain data is possible, though its accuracy comes with some conditions.

One of the listed wallets appears to have donated small amounts of bitcoin to the primary Ukraine bitcoin wallet. Hashed transaction data shows that a donation of $34.59 was made on Feb. 26, along with two more donations of $11.40 and $39.31.

However, these transactions occurred before the tweet from Celsius soliciting donations went live. They could be from Celsius users already donating to the cause.

After the tweet went up, on-chain data shows that a bitcoin transaction of approximately $53 went to the Ukraine wallet from Celsius’ second BTC wallet.

How much ether did Celsius receive?

Given Celsius CEO Alex Mashinsky’s Ukrainian heritage, one might assume that his intent was genuine when the company solicited donations via Twitter.

But many commenters on Crypto Twitter, ever the cynical chatter gallery, seemed to disagree, and by volume of donations, the campaign wasn’t much of a success anyway.

On-chain data shows that less than $100 in ether was sent to the wallet after the tweet went up on March 2 (as the wallet was used in Celsius' operations, most transactions involve internal transfers between Celsius' wallets).

All in all, this represented less than 1% of the incoming tokens to Celsius’ ERC-20 wallet, which is one of the wallets the company used to process its general transactions for business.

Critics of Celsius and Mashinsky have pointed to Mashinsky and other executives' eight-figure withdrawals from known Celsius wallets as proof that the executives sought to enrich themselves, or at least save their fortunes as the company’s financial situation was deteriorating.

But that may not be the case. Celsius didn’t receive a material amount of funds from its donation drive, and what little bitcoin it did get it sent on to Ukraine. The ether stayed in the wallet, but in the amount in question is the equivalent of a rounding error. The firm’s poor public image, however, and the choice to use its own wallets and not well-publicized Ukrainian wallets, encourages some conspiracy theory narratives.