How common is Binance’s direct-to-recipient donation model?

Binance, the world’s largest cryptocurrency exchange, often bypasses traditional aid structures by sending funds directly to recipients’ digital wallet – a method at the centre of a dispute over whether to accept its $39 million donation.

The company had pledged cryptocurrency initially worth $200,000 to the Malta Community Chest Fund Foundation (MCCFF). But the foundation ultimately walked away from the offer, citing reputational and operational concerns.

Originally agreed in 2018 during the presidency of Marie-Louise Coleiro Preca, the donation was never implemented due to legal and administrative squabbles. Talks between Binance and the MCCFF broke down after the two sides failed to agree on how the funds would be disbursed.

While Binance pushed for direct crypto transfers to individual patients, who could then convert the donations into local currency, the MCCFF preferred to receive the funds itself and distribute them in line with its existing procedures.

The issue also raised privacy concerns, with MCCFF arguing in legal proceedings it initiated in 2021 that it was unwilling to hand over sensitive patient information.

Defending the deal, an aide to Coleiro Preca, Carmel Briffa, told Times of Malta that various reputable international aid organisations and charities have accepted donations from Binance over the years.

These include the United Nations Development Programme (UNDP), the United Nations High Commissioner for Refugees (UNHCR) and UNICEF, among others, he said.

Binance's charity arm lists several international bodies as recipients of its charitable donations, from reputable universities to aid organisations. around the world. However, it is unclear whether Binance adopts the same funding model with each of them.

When contacted, UNHCR told Times of Malta that the only donation it had received from Binance so far was in US dollars, not crypto.

“With regard to the Binance Charity Foundation, UNHCR received from them only a one-off fiat donation of USD2.5 million in 2022, for our response to the Ukraine emergency,” the spokesperson said.

“UNHCR does not have a partnership with the Binance Charity Foundation or Binance,” they added.

UNHCR said that, although it receives crypto donations, they are converted to US dollars “on the day they are received”.

The spokesperson added that UNHCR does not accept anonymous crypto donations. “We require donors of cryptocurrency to provide their full name, e-mail address and physical address at the point of transaction,” they said.

However, earlier this year, UNHCR said it was exploring the use of blockchain technology to deliver aid, saying “it reduces the risk of corruption and fraud, makes funds easy to trace and cuts out banking and intermediary fees”.

UNICEF and UNDP did not respond to questions about the nature of Binance’s donations.

Public statements suggest that these donations were in crypto, not cash, although it is unclear whether these funds were sent to the charity or directly to individual beneficiaries’ wallets.

In a joint statement in 2022, UNICEF and Binance announced a donation of the equivalent of $2.5 million in crypto to go towards supporting children in Ukraine.

Meanwhile, back in 2018, Binance and the United Nations Development Programme announced a partnership in which the former would donate $1 million as part of its push to use blockchain technology for social good.

Binance’s charity arm says it promotes “direct giving”, working with local NGOs to open wallets for recipients. It sends funds directly to those wallets, with beneficiaries then able to cash out their donations, a process similar to what Binance seemingly planned for its MCCFF donation.

If donating to an NGO, on the other hand, Binance says it “provides a grant in crypto to local NGOs”, which can then “use crypto to buy goods or cash-out to their local currency”.

It is unclear whether this option was ever discussed with MCCFF.

The foundation lists a host of philanthropic causes to which it has contributed, from the restoration of the Notre Dame cathedral to emergency relief in Lebanon, Haiti and Uganda, among others.

Binance has also adopted more direct approaches in some instances. After an earthquake struck Morocco in 2023, the company instantly sent $100 worth in crypto to every Binance user in the affected areas.

This form of direct aid is “often more effective than funnelling aid through third-party organisations,” Binance argues, with funds reaching beneficiaries almost instantly.

Proponents of crypto philanthropy say donating crypto is quicker, more efficient and more transparent than donating through traditional channels, enabling people in need to access funds in the blink of an eye, even when banks are out of reach.

Each donation is automatically documented and traceable on the blockchain, they say, effectively ensuring that all the money donated actually reaches beneficiaries, without any of it getting lost in questionable administrative costs on the way.

However, others have baulked at the possibility of crypto being used to launder illicit funds and fund other nefarious activities.

A recent report by blockchain investigators Elliptic detailed how Russian actors were using crypto to evade sanctions and influence Moldova’s general elections. Other reports have documented how crypto exchanges, including Binance, have been used for illicit activity.

According to The Giving Block, a leading crypto fundraising platform, over 70% of the top 100 charities listed on Forbes’ top charities list now accept crypto donations. An estimated $1 billion in crypto was donated in 2024, the platform said, with this figure expected to rise to $2.5 billion this year.

Malta first introduced its own laws to regulate cryptocurrency in 2018 but newer EU-wide rules that came into force in 2023 have since tightened measures further.

But as the debate rages on over whether Binance’s direct-to-recipient donation model should have been acceded to, there is one man keen not to let the millions leave Malta.

Prime Minister Robert Abela recently confirmed that he was in talks for the funds to remain in Malta, possibly to be used by another charity.