Alexei Navalny, one of the major opposition politicians who ran against current Russian President Vladimir Putin this year, raised more than 25 percent of his campaign donations in bitcoin.
100,000 Donors, $6 Million
During the 2018 Russian presidential election, analysts predicted a landslide victory for Putin and for him to be re-elected with the support of the majority of the Russian people. On March 18, Vladimir Putin secured his fourth term in office with 77 percent of the votes, garnering more than 56 million votes.
However, Navalny, who was considered to be one of the few politicians in the country with a chance of success against Putin, had his opportunity to run for the presidency seized by the Russian authorities when the government barred Navalny from pursuing his presidential campaign.
Initially, Navalny announced his intent to run for president through a campaign video released on YouTube and various Russian social media platforms. The website of the Navalny campaign launched moments later with a donation platform that allowed the citizens of Russia to donate bitcoin to the Navalny campaign.
Although Navalny was forced to withdraw his campaign in December 2016, within a few months, he had raised around $6 million from bitcoin donations, sent by more than 100,000 donors. The 100,000 donor count did not include donors who sent funds to the campaign through bank transfer and credit card networks. Navalny raised $6 million solely from bitcoin donors, and more than 100,000 bitcoin users sent Navalny funds for his campaign.
Why Did Navalny Accept Bitcoin?
In late 2016, the central bank of Russia and other agencies of the Russian government requested that Yandex, Russia’s largest social media platform and mobile payment network, halt the services it was providing to Navalny’s campaign.
According to local sources, the central bank’s decision to ban Yandex from processing payments for Navalny’s campaign was made less than one month after the initiation of the campaign. At the time, Russia’s Financial Security Service (FSB) asked Yandex to confiscate information belonging to individual donors who were sending funds to the Navalny campaign and blocked more than 12,000 transactions from going through.
In January 2017, the Russian central bank denied allegations that it had prevented Yandex from processing payments sent to Navanly.
“Employees of the Central Bank did not make any calls or in any other way commit the actions that are described in your posts, Alexey [Navalny]. We can only answer your demands with one of our own: tell us the name of our employee who demanded that Yandex Money close your account, or apologize for writing these lies,” the official statement of the central bank translated by The Moscow Times read.
As leading cryptocurrency exchange Kraken explained this week, all centralized platforms, including Yandex’s payment network, are centralized choke points. The Kraken team wrote:
Thank you all for suggesting Kraken as an alternative for wikileaks[;] however, Kraken is also a centralized choke point. Those who require uncensored financial autonomy should control their own private keys and rely only on the blockchain for processing.
It is not practical to rely on centralized financial service providers and platforms, especially if individuals or organizations like Navalny and Wikileaks may be vulnerable to censorship and various threats.