Source for exchange order book data: Kaiko The trend here is even stronger, especially in March, immediately after the war began. That month, Ukrainian hryvnia-denominated trade volume rose 121% to $307 million, while Russian ruble-denominated trade volume rose 35% to $805 million. After that, we see volumes drop off for both countries, ebbing and flowing through August, but never reaching their March highs. The true scale of this activity is also likely much higher than the totals we see above, as this data comes from just two exchanges accepting both countries fiat currencies, but we can still draw conclusions from the

We showed our data to Tatiana Dmytrenko, a high-ranking adviser in Ukraine's Ministry of Finance and member of the World Economic Forum's Digital Assets Task Force, and asked what use cases may have accounted for the spikes in hryvnia-for-crypto trading. She cited currency controls implemented by the Ukrainian government. "Due to the introduction of martial law in Ukraine, the Ukrainian Central Bank imposed restrictions on currency cash transactions, such as buying dollars or euros, she said. Transfers of currency funds abroad were also restricted soon after that Dmytrenko believes some Ukrainians may have looked to exchange their hryvnia for cryptocurrency in response to these measures. She also pointed out that these currency controls were relaxed in July 2022, at which point we see hryvnia-for-crypto trading decline.

To learn more about similar activity in Russia, we spoke with a regional money laundering expert who's worked with financial intelligence units in Eastern Europe as well as several international organizations. While he asked to remain anonymous, he gave us permission to quote him on how to interpret this data in light of what he's seen in Russia since the war began.

Eastern Europe 42 The major question not just for oligarchs but also ordinary Russians became, How do you get money out of Russia? the expert said. "Many began looking for new places where they could cash out their crypto." He cited the UAE and Turkey as countries they have relied on in the past, and also pointed to Kazakhstan and Georgia as countries that may have been able to absorb the increased demand for such services once the war began. While this activity is difficult to quantify, web visits from these countries to cryptocurrency services primarily serving Russian users could be one useful proxy metric. All four countries saw spikes in web visits to Russian cryptocurrency services after the war began in February, as seen in the chart below. Index: Web traffic visits from select countries to predominantly Russian cryptocurrency services, July 2021 June 2022