Alex Bornyakov: Ukraine, The Cyber Front

In the fall of 2021, Ukrainian deputy minister of Digital Transformation Alex Bornyakov spoke to The New York Times about a law the country was in the midst of passing that would legalize and regulate cryptocurrencies. The paper described the policy shift as part of Ukraine’s efforts to revamp its image as a haven for international Web3 startups: “The big idea is to become one of the top jurisdictions in the world for crypto companies,” the Deputy Minister is quoted as saying. “We believe this is the new economy, this is the future and we believe this is something that is going to boost our economy.”

Today, these rosy prognostications feel like artifacts of another time: the window between March 2021 and May 2022, when Beeple stunned the art market with a 69-million-dollar sale at Christie’s, celebrities hawked NFTs on late-night TV, and mass public interest in the blockchain exploded. They also double as a poignant reminder of a moment, not long ago, when Ukraine was dreaming of a prosperous future instead of fighting a devastating war. In the immediate aftermath of Russia’s February 2022 invasion, Ukraine’s robust blockchain infrastructure would prove to be a useful vehicle for rapidfire fundraising: just days after the country posted its official wallet addresses on social media, the Ukrainian government had received close to 10 million dollars in donations from users across the world. Within a few weeks, that amount had swelled to 54.7 million dollars.

By mid-April 2022, according to a tweet from Mykhailo Fedorov, the vice prime minister of Ukraine and minister of Digital Transformation, some 45.1 million dollars of these Web3 donations had gone toward funding necessities like helmets (645 purchased), fuel (25 tons, at 33,334 dollars) and medical supplies (1.1 million dollars). Direct crypto donations have dipped dramatically since the spring of 2022, and are just a drop in the bucket compared to the billions of dollars in military and humanitarian aid that Ukraine has received from foreign governments across the globe. Still, the country’s onchain fundraising efforts, bolstered by organizations like Aid For Ukraine and UkraineDAO, signaled a sea change for virtual currencies. Crypto stans celebrated the wartime fundraising trend as proof of the technology’s potential as a financial lifeline in a time of crisis, while economic and national security analysts fretted that Russian elites would take advantage of crypto’s anonymity to circumvent economic sanctions.

I first learned about Deputy Minister Bornyakov and the Ministry of Digital Transformation as part of my work covering the Meta History Museum NFT project for VICE. The Meta History Museum, which offers limited collections of digital artworks documenting the progress of Putin’s war, is the brainchild of a small group of activists, based primarily in Ukraine. When I was reporting the story in spring 2022, the initiative had raised between 650,000 dollars and 850,000 dollars for Ukraine’s official wallets—a respectable sum, by any means, but disappointing to its investors, who had purchased their NFTs in the hopes that the project would go viral. If the Meta History Museum got enough hype, the reasoning went, the artworks would fetch higher prices on the secondary market, and investors would be able to sell them at a profit. Without the buzz, buyers would likely be unable to resell their NFTs, making their investments more like regular old donations.

"When I Graduated, It Was May 2019—The Same Year Zelenskyy Was Elected As President. He Had This Vision To Build A Country On A Smartphone."

I scoured the Meta History Museum’s Discord as the project’s creators and investors shouldered the Sisyphean task of getting the internet’s attention. I was intrigued by this blunt transactionalism: while speculation is a critical part of the Web3 economy, it’s a less palatable talking point when it comes to charity. Still, this style of altruism has a precedent: in the 20th century, well-intentioned civilians in countries including the UK, Canada, and the US purchased war bonds with the promise that they would be repaid at a high interest rate. Was crypto—with its barefaced approach to the bottom line—changing the nature of charity? Or is charity, to some degree, always motivated by a degree of self-interest?

In the following interview, Bornyakov explains the ways in which his role at the Ministry of Digital Transformation has shifted since the war began—he relocated to Silicon Valley, for one thing—and the Ministry’s persevering belief in the blockchain, despite a dip in crypto donations since the crash. The deputy minister touches on the country’s efforts to make its struggles legible to a Western audience, from Twitter to graphic design, while spotlighting the ways in which Ukraine is continuing to work toward President Volodymyr Zelenskyy’s 2019 dream of a “state in a smartphone.” Though the goals of the Ministry of Digital Transformation have changed radically over the past year, it’s clear that the country’s reputation for technological prowess is as strong as ever. “Now, we have an IT army,” Deputy Minister Bornyakov tells Victoria Camblin. “We fight in the cyber front.”—Eliza Levinson

Victoria Camblin: Can you briefly describe your personal pathway to politics, and the role of technology in that?

Alex Bornyakov: I started with the technology part first. As a child I liked everything about computers and wanted to devote my life to something related to IT. I worked as a developer, a programmer, an engineer, and a manager, then ended up founding my own companies. The first one was a software outsourcing company. Then there was an advertising platform, a digital marketing platform, and a venture fund. I became an investor. At some point, I realized that I had achieved a lot of things personally, building my own wealth. I had also given jobs to hundreds of people, and decided I wanted to do more public good. This was in 2009, [leading up to] an election year. Back in the day, there were two major political parties. One wanted to go toward Russia. The other wanted to go toward the European Union. That’s the party I decided to join, because I believed in Ukraine’s European future. I started to help them, dedicating part of my time for public activities while continuing to do business. I was already traveling to America a lot, because I had this company working in the digital marketing space, mostly for the US market. When I decided to get another master’s degree, I enrolled in the School of International and Public Affairs at Columbia University. This happened by accident—I didn’t plan it. When I graduated, it was May 2019—the same year Zelenskyy was elected as president. He had this vision to build a country on a smartphone. Soon, they created the Ministry of Digital Transformation. I was making my way back to Ukraine and planning to take a few months off after all the coursework when a friend of mine said, “Listen, I know Mykhailo Fedorov, and he’s looking for someone like you, with experience both in business and in public administration.” I was curious to implement what I learned at Columbia, so we set up an interview. Fedorov told me about the President’s vision of completely redesigning government services to move them online. And there were other cool things. He said he wanted to develop a Ukrainian IT ecosystem, because he believed that was one of the most promising industries that Ukraine could benefit from. He asked me to do a presentation of how I saw the future of IT, and a week or two later he offered me a job. By fall 2019, I was at the Ministry.

VC: You are actually in the US now, in California, and there is a long history between Ukraine and Silicon Valley, with US companies depending on Ukrainian tech expertise. That connection has also been evident in Ukraine’s partnerships during the war. How did it come into play in your initial vision?

AB: The integral part of developing a startup and venture ecosystem in Ukraine, in addition to knowledge and expertise, has always been access to capital. And Silicon Valley has the biggest flow of capital in this space. Ukraine has always looked at Silicon Valley as an example of how we should build companies, and Ukrainian entrepreneurs have always been eager to come here, seeing Silicon Valley as the ultimate destination if you want to build on a multi-million- or multi-billion-dollar level. I should mention that the US market is huge—300 million plus people—so Ukraine’s startuppers were aiming for that audience, too. But access to capital has always been the one limitation. You can start building and raising money in Ukraine, but at some stage if you want to develop the company further, you need to go to Silicon Valley. There are very few examples of successful Ukrainian funding rounds of more than five or ten million outside of Silicon Valley—which is an interesting fact, by the way.

VC: It seems like a low threshold. We often talk about Silicon Valley in terms of generations, in the same way we talk about the different versions of the internet: Web1, Web3, and so on. You are part of a very young ministry that is all about transformation, in a country with a very young government. Do you identify as part of a new or specific generation?

AB: I was among the first people in Ukraine who started to invest in startups, and the whole thing really only started in about 2011 or 2012. That is the first generation in Ukraine. I still know the people who were building their startups 10 years ago—they’re still on the scene. Some were very successful, sure, but it isn’t like people retired and then other people came. Maybe five years later there was another wave of younger people, but I don’t think it’s possible to say that there are “millennials” and then the next generation, or that there is a generation of Web1, Web2, or Web3. In Ukraine, it’s still the first generation of entrepreneurs in the startup system.

VC: That’s very interesting, because I think people get really caught up in these distinctions—especially when speaking about the move to Web3—and they lose the aspect of continuity. You say the culture in Ukraine got started around 2011, which I noticed is when you started your Twitter account. At that time, there was still this energy of social media being where the revolution happens, where people can drive change. I think that energy was lost, frankly—until this year, with Ukraine’s use of the platform after the war. You mentioned a background in digital marketing, which seems to be part of what the Ministry of Digital Transformation is doing, particularly on Twitter. How much of what you’re working on is about messaging as well as innovation— about getting a new story across about Ukraine?

AB: For the first decade after I joined, Twitter was a major source of information for me about what was going on in the US market—it was not a place for Ukrainian companies or for Ukrainian people. I was following only US media companies, US journalists, because I wanted the latest US perspectives. Twitter is still not popular in Ukraine at this point, but it has had a completely different function for us since the invasion. When the war started, we realized this is the only way, or at least the most efficient way, to reach a Western audience. If you really want to get your message through in the United States, Canada, and Western Europe, you should use Twitter. In fact, you must use Twitter. That’s just how you do it.

VC: It’s interesting that you refer to the “Western audience.” I think Minister Fedorov recently tweeted that Ukraine has always been part of the West. I suppose in order to communicate that, to send a message about unity, you must acknowledge the different codes and platforms?

AB: I would describe what we want to do is to tell the world our story using Twitter.

VC: It seems that part of the exercise is one of translation, too, and of creating a vocabulary that serves the agenda. There is a foreign policy scholar named Mark Leonard who put out a book called The Age of Unpeace: How Connectivity Causes Conflict only a few months before Russia invaded Ukraine. Leonard used the word “unpeace” to describe conflict that takes place over communication lines, cyberspace—channels that Ukraine is using in the fight against Russia now. When I spoke to him, I challenged him to call this “war” instead of “unpeace,” to reflect the violence of those attacks. The language used by the Ministry of Digital Transformation is direct, however: cyberwarfare is war; digital armies are armies. How important is the specific terminology you are putting out there to the English-speaking world?

AB: I hadn’t heard of Leonard’s work, but “unpeace” actually makes sense. Russia didn’t start this war on February 24, 2022. For four or five years, they had been creating an information sphere in Ukrainian media in order to show that our government is incompetent, that people from different parts of Ukraine are not happy with what’s going on, that there’s ethnic conflicts. There were anonymous Telegram channels, there were journalists on the payroll, there were YouTube videos—there were entire local newspapers created specifically for distributing these messages. They were telling Western Ukrainians that Eastern Ukrainians hate them and telling Eastern Ukrainians that if you go to the west and speak Russian, you would be beaten up. I think that’s the right definition of “unpeace,” whether or not it is Leonard’s: when you create that atmosphere within a country that is not already at war; when you destabilize the situation so that when you do invade, you can do it easily. They bet on social inequality and conflict between the citizens of Ukraine. They perfected the tactic. And it wasn’t taken seriously, especially on a social level. Ukrainians weren’t talking about fake news. There were a couple attempts to stop it from parts of the government, some local actions, but until Russia physically invaded, no real actions were taken to prevent this. And it is very important to follow this in other territories, because I’m telling you, they’re not just targeting Ukraine—think about those rumors about Californians wanting to do a referendum on getting out of the States. When the war started, we started taking this very, very seriously. Part of what they were doing is also destroying cyber infrastructure. Now we have an IT army; we fight on the cyber front.

VC: Which brings us back to the activities of the Ministry of Digital Transformation, which have had to adapt rapidly to the needs of a country at war. There has been an incredible amount of innovation and experimentation. Ukraine began accepting donations in cryptocurrencies, and the government has used blockchain technology and NFTs to drive funds. I believe there had been a plan to do an airdrop of digital assets to donors, but that it was put on hold. I’d love to know more about that and about the ministry’s approach to tokens. Were there challenges, in your experience, or special considerations you encountered with tokenization at a state level? Do you see any future applications outside of emergency funds?

AB: I’ll start by saying that tokenization could be effective both for fundraising and for increasing the liquidity of assets in the real sector. This will become a simpler process once citizens start owning crypto assets at a higher level, with higher adoption rates. I just came back from the Dubai IDEX conference, where I met with the guys who worked on the tokenization of real estate—that’s a legal thing in Dubai now—and NFTs can play a role in that, as unique assets. We turned to NFTs as an opportunity for charity reasons, and it turned out very well. The top project that we supported though was an NFT museum called Meta History, which was set up with the Ukrainian blockchain community and the Ukrainian artist community with the support of our ministry. It brought in almost one million dollars in donations, so it’s a huge amount, and the concept is very cool. There are a couple other projects, such as Save Ukrainian Culture, which was launched by the Ministry of Culture and Information Policy, and the blockchain company Everstake. In terms of concerns or skepticism, I honestly didn’t encounter any. It all went smoothly. And after what we did with aid for Ukraine, receiving charitable donations in crypto and utilizing NFTs to help Ukrainian humanitarian and military causes, it changed a lot of people’s minds about these technologies—especially in Ukraine.

With blockchain you can observe in real time how, when, and how fast this help is being distributed. Without blockchain, you can’t reach this level of transparency. It’s technically impossible.

VC: So the charity function served as a gateway, a platform for encouraging adoption given the cause and its urgency. Are you thinking about how to sustain this interest in NFTs, making them useful in the longer term, outside wartime?

AB: We had many different ideas, but then Crypto Winter, as they call it, came. It shifted the focus. We still receive donations in crypto, but there are way fewer. Once crypto starts growing again, this will probably change. One of the things we were interested in is how to personalize people’s war efforts. I’m not describing a specific project—I’m talking about a concept of granting NFTs or tokens of appreciation for people who donated, to express gratitude for what they did. It is postponed for now, but maybe at some point we will still issue some NFTs to those who donated—because we have the Ethereum wallets of everyone who sent something, from one dollar to a million dollars. We’re still thinking about how to implement this, specifically from the marketing side. From a technical perspective, it’s not complicated. We are also thinking about a crypto fund where you can choose exactly where you want to donate and follow your donation. Instead of just giving to an NGO, you can choose a person or institution that you want to help and see how your donation is making an impact.

VC: Were the digital services developed before the invasion useful as technological models for developing the tools created by the Ministry during the war? It seems that what these programs have in common is visibility on the movement of people and capital—whether it is tracking the movement of invaders, a charitable donation, or an application for unemployment benefits.

AB: What we started to do after the war began, utilizing blockchain and Web3 technology, gave us completely different opportunities for accountability and transparency. The fundraising platform United24 was one project started after the war that uses this functionality, supporting more than 100 cryptocurrencies. Now we’re trying to extend this service for refugees outside of Ukraine. There is a project which will use the Stellar blockchain and Diia in order to identify people for humanitarian aid. It can use the blockchain to trace every dollar that goes to refugees, how much goes to overhead costs. It’s a level of transparency and accountability that did not exist before this war. What we have accelerated with our fundraising on the blockchain is offering new tools to the whole charity industry, if I can call this an “industry.”

VC: Absolutely. We all should.

AB: So, say you donate to a major organization—the Red Cross, UNICEF, etc. You can give 10 million dollars and you will just get a report saying “we helped a bunch of people” eight months later. And no one reads those reports. With blockchain you can observe in real time how, when, and how fast this help is being distributed. Without blockchain, you can’t reach this level of transparency. It’s technically impossible.

VC: Because they accelerate adoption, I imagine that launching these projects would yield a lot of data. That information would be valuable in developing ways to apply these technologies outside the charity industry—or even as the basis for services developed for exporting to countries or nongovernment entities outside Ukraine. Do you view these fundraising initiatives as test cases, research for other things you could do with blockchain?

AB: I think this can serve as a testing ground, yes. Remember that part of the reason crypto happened so quickly in Ukraine is because of what was going with SWIFT. Around the SWIFT ban, transfers were slow. We had to turn to crypto out of necessity. It was immediately clear how much faster, more traceable, and more accountable it is. I don’t know when and how they’re going to scale it, or to which extent, but I think that’s going to happen at some point, and I think it’s going to happen faster rather than slower.

VC: One of the touted virtues of blockchain as we have said is transparency, but when you’re at war, it does not necessarily serve you to be transparent. You need to be data gathering, not data sharing. How are you navigating the use of these fully transparent tools with respect to a national, military strategic interest in secrecy?

AB: That’s a great question. Part of the answer is about what is made public: you can see how much money is being spent, but you cannot always see on what exactly [that money is being spent]. We still report it, and what we say is that we’re going to reveal more information about this expense later. So you’re totally right: we cannot disclose some of the purchases we made. We were even concerned at first about whether or not to reveal how much basic equipment we bought—say, how many helmets or bulletproof vests. But then we thought that it was highly unlikely that the enemy would do anything with that information. Every piece of information we reveal is analyzed first. We ask, “Will this information help our enemy to harm us?” If the answer is “no,” or “highly unlikely,” then we reveal it. If we suspect that it might hurt someone, we postpone, or we say that there was an expense but withhold details. For example, we will say that we bought some optics or thermal imagers, but we don’t say exactly which ones or where we bought it from, because we don’t want to endanger the supplier. So maybe we postpone until—we don’t know. We’re trying to just keep it simple.

VC: If you had been able to give a simple solution right off the bat, you would have solved one of the main questions of the blockchain: how to reconcile the values of transparency with the possibility of anonymity. How has the more day-to-day stuff, the basic digital services, been impacted in the last months?

AB: When the war started, we postponed all the development of government services for a month or two, I would say, and completely switched to different projects. You mentioned one of them, eVorog, which reports information to the armed services. We also added services to Diia for internally displaced persons, reporting major property damage, applying for unemployment benefits, and getting advice on child adoption with online consultations. After a couple months, and especially when Russian troops had withdrawn from Kyiv, we resumed some of the projects from before the war, bringing back a lot of services and developing newer ones. We’re trying to get them back on track.

VC: To say you’ve done impressively well in that respect would be an understatement. You’ve even released new services since the war, while working to maintain essential infrastructure. You famously partnered with Elon Musk’s Starlink to keep Ukraine online, and other corporations have intervened to support as well. Do you have any concerns about the relationship between the state sphere and the private sphere here, specifically the involvement of non-Ukrainian multinationals in providing public services?

AB: Well, no, not generally. Though it depends on the corporations you’re talking about. If you’re talking about US corporations, big IT giants, we were amazed and surprised by how quickly they reacted and supported Ukraine. I have to say how thankful we are to Google, to Facebook, to Microsoft, to all of those major corporations that did so many things. And not all those things have been made public. There are corporations doing things that we cannot disclose, and this really helped us to win. Of course, Starlink is one of the practical examples. I know that right now Elon Musk is going back and forth, but I don’t know what we would have done without them. But I would still call this a gray area. Some companies are hiding in the bushes. And some of them are still working with Russians. Generally, all I have heard is total support of Ukraine. Even if they work with Russia, it doesn’t mean they support Russia, and they have explained their reasons to us.

VC: I imagine that many of these decisions relate to how companies want to communicate their individual brands. Earlier, when you were talking about the blockchain projects you are working on, you said that from the technical standpoint it’s easy, and that the complicated thing is the marketing. I think this is an amazing thing to say. No one wants to talk about the marketing. But this statement alone puts creative and cultural production at the forefront of getting these technologies out there, and that goes far beyond making the visuals for NFTs or designing logos. How do you view the role of culture and the creative fields coming into the work that the Ministry of Digital Transformation is doing or hopes to do?

AB: Well, I think part of the reason that Diia, a major government service application installed on millions of devices, is so popular in Ukraine is because artists, designers, and especially content-makers did such a good job. I was among the first Ministry employees, and I remember, when we started, we did a short two-minute video on how Diia would change your life, and it was so relatable, I think, and encouraging.

VC: People “got it.”

AB: Yes, they saw it and thought, “This is what we need.” And there was no technical solution back then! It was just a video made by creators at a Ukrainian agency. Ever since, it has been exactly those people, not the technical people, who are helping us to reach the audience.

VC: I think creatives need to hear that. The Diia app design is known among creatives outside Ukraine, by the way, as one of the chicest government brands out there. That’s also interesting marketing for the country. So investing in that quality works on a level outside the intended functionality, just as a number of the Ministry of Digital Transformation’s initiatives have: inviting donations in crypto not only allowed for funds to move quickly, but it also engaged a specific, tech-savvy global community, while sending a message about Ukraine’s innovative spirit to everyone else. The technologies are practical, functional, but they are also emblems. Ahead of this conversation, I read about Estonia in the 1990s, when they were pioneering a kind of digital republic. They had a very young government, much like Ukraine does now, and they were similarly ahead of their time. A statement that stood out to me was that this new state leadership viewed the internet as a manifestation of something more than services, as a “symbol of democracy and freedom.” How do you relate to that sentiment, or how might the Ministry of Digital Transformation put it, today?

AB: I should first mention that Estonia was a role model for us for a long time, and there are so many things we have in common. I totally agree that it’s not just a service but symbolic of democracy and freedom. I think we have extended that message, too, to say, “We’re doing this because the government should not be scary. It should be convenient and it should be visible.” It’s not just about creating advanced apps. It’s about making the government serve people in a visible and convenient way. And this starts from a philosophy that really sets us apart from Russia, where it is quite the opposite. That’s why we’re so different: we believe that government must serve people, and they believe that the people must serve the government. Diia, or any other digitalization project, is just one way we implement the Ukrainian vision—one where we say, “It’s not you for government; it’s government for you.”