28 Jul 2021 10:51 AM +00:00

Vitalik Buterin's $1bn Donation Faced Regulation Hurdles, Says COVID Relief Fund Founder, With $20m Paid Out So Far

Ethereum co-founder Vitalik Buterin's large donation to the India COVID Crypto Relief Fund is gradually being disbursed, with just $20 million having been paid out.

While this amount may seem low, the Relief Fund's founder Sandeep Nailwal cited government regulations, cashing out, and guaranteeing the money reaches the grassroots level as reasons for this careful rollout.

Buterin donated a total of $1.5bn to various non-profit organisations in May 2021. This included $1.14bn worth of Shiba Inu and Ethereum to the India COVID Crypto Relief Fund, although as Buterin's donation contributed towards a large drop in the price of SHIB, Nailwal estimates this is currently worth around $400m.

Advertisement

Careful and Regulated Disbursement

Speaking to Bloomberg, Nailwal explained that the fund has had to gradually convert its cryptocurrency into USD, before converting into INR. This was to comply with the Foreign Contribution Act of 2020 which, while leaves cryptocurrency in a grey area, regulated foreign aid to NGOs. 80% of the fund has now been liquidated.

Asheeta Regidi, the Head of Fintech Policy at Cashfree, previously noted the tricky process in which NGOs can accept cryptocurrency. "Given the lack of clarity, crypto donations are following a system of being converted to fiat currencies in crypto exchanges abroad and being donated thereafter in INR to Foreign Contribution Regulation Act-approved NGOs," he said.

Nailwal also wants to remain cautious with distributing the donations, in order to verify it reaches the local populations. According to Bloomberg, the Relief Fund founder plans to hire a high-profile auditing company for further transparency.

The relief fund website keeps a public record of donations, transfers and grants to ensure full transparency. The most recent grants have been to the Rapid Rural Community Response (RCRC) Network that supports rural Indian communities suffering from COVID-19.

$20m more of the fund is nearing disbursement, according to Nailwal. The fund will prioritise preparing for a third wave of COVID-19 in India, which yesterday had 29,689 cases, following its peak of over 400,000 new cases per day in early May (via World Health Organisation).

Read More: 81 Countries Are Investigating Establishing State-Backed Digital Currencies

[Featured Photo by elifxlite via Pixabay]