Coping in a war zone: S.F. crypto startup navigates its close ties to Ukraine

It would be hard to find a company more evenly split between San Francisco and Ukraine than the cryptocurrency startup SKALE Labs.

One cofounder is based in San Francisco’s Ferry Building, a hub of The City’s crypto community. The other is based in Kharkiv in northeast Ukraine, the nation’s second-largest city (after the capital of Kyiv), and a tech center.

The company has evacuated its team from Kharkiv, with good reason. On Thursday, Russian shelling hit Kharkiv. Tech workers for other companies were in the streets. Katya, a computer programmer who declined to give her last name, told the blog Foreign Policy, “Today we really feel that the whole world is with us.”

SKALE is the story of one company, and also a tale of two cities. On Zoom calls, its team discusses evacuations from a war zone, and how to build the next internet. The company is at a crossroads of great instability and great potential, of a war zone and a booming industry.

SKALE’s position as a company with a foot in two worlds is important. When Ukraine’s president wanted to discuss the nation officially adopting cryptocurrency, he came to San Francisco. Now cryptocurrency’s role is being tested in the first war of web 3.0, as other cryptocurrency companies and NFT artists also connect The City to Ukraine.

That’s not always an easy role to play. Konstantin Kladko, one of the co-founders and SKALE’s chief technical officer, moved back to Ukraine several years ago after studying at Stanford University and working in Silicon Valley. Now he is in Turkey having left his home in advance of the Russian invasion. Separated from both his company’s headquarters, he clearly has affection for both.

“In many ways Kharkiv is a sister city to San Francisco,” Kladko said. “There is a deep connection between Kharkiv and San Francisco.”

Oracle, Amazon, Samsung, GitLab and many other tech companies have employees in Kharkiv, which Kladko believes has helped his nation’s economy, overall. “The country has been thriving thanks to the growing tech field and close relationship to Silicon Valley,” he says.

That has also built relationships between people. “In this age of remote working, tech teams form close bonds despite distance and time zone changes. Many San Francisco citizens have close friends that are impacted by the war.”

One of those San Franciscans worriedly watching from afar is Jack O’Holleran, the CEO and the other co-founder of SKALE. Over the past three years, he has traveled to Ukraine some 20 times, but now he must follow the war from the company’s offices in the Ferry Building. The comfortable offices don’t do much to reassure a chief executive with employees and friends in harm’s way.

“Our people have friends and family in the impact zone. It’s a scary thing,” O’Holleran said in an email. “The employees and the team made the decision that it was safer to get them abroad over the last two weeks.”

SKALE has paid to relocate its Ukrainian employees and their families to Turkey, where Kladko is, and Portugal. “Everyone was bracing for impact,” O’Holleran said. But escape from the danger has not been easy. “A few have elderly relatives, and have had to go back” to check on them.

The SKALE employees’ struggles have played out as cryptocurrency has navigated a difficult global role — with a path through San Francisco. Other companies and artists in the crypto world have connected Silicon Valley and Ukraine in important ways at a difficult time.

Today we welcomed Ukrainian President Volodymyr Zelensky to Silicon Valley and discussed SDF’s ongoing support for Ukraine’s digital economy. We commend Ukraine’s forward-looking leadership and commitment to delivering digital transformation by leveraging blockchain. Onward! pic.twitter.com/cXSEInbUxP

— Stellar (@StellarOrg) September 2, 2021

In September, Ukrainian President Volodymyr Zelenskyy came to Silicon Valley and met with San Francisco’s Stellar Development Foundation, a nonprofit that supports open-source cryptocurrency developers and projects. That junket was part of a major push by the country. In November, The New York Times declared in a headline that “Ukraine Wants to Be the Crypto Capital of the World,” citing Zelenskyy’s trip to Silicon Valley.

The war has made that push for crypto leadership much harder for Ukraine. In the past week, the Russian invasion of Ukraine has caused cryptocurrency coin prices, including SKALE’s, to see-saw mightily. Prices initially plunged, but have battled back.

O’Holleran says that turbulence is understandable. “Right now there’s a lot of fear, anxiety, and doubt. Yet it’s important to remember that one of the most powerful things about cryptocurrency is that it belongs to no country.”

Crypto is also being used to support Ukraine. Some artists, like the protest band Pussy Riot, are raising money for Ukraine via cryptocurrency. Kyiv artist Sasha Grebenyuk, who goes by the artist name graph0man, is selling nonfungible tokens of his artwork to benefit Ukraine.

But not all NFT artists can pursue their art now, including one with Bay Area ties. An NFT of artwork by Ukraine artist Roman Chizz was part of a first-of-its-kind real estate sale in May of a Kyiv apartment by Palo Alto real estate tech company Propy.

Today, Chizz, whose artwork previously was commissioned by Pepsi and Lays, is living with his girlfriend in a Kyiv subway station, sleeping on the concrete platform. “I can’t do art here,” Chizz told The Examiner on Instagram. “I don’t know what happens tomorrow.”

No one knows what will happen tomorrow in Ukraine. But Kladko, the SKALE co-founder who calls both Kharkiv and San Francisco home, is optimistic.

“We are hopeful and have confidence it will come to a positive end, and that we can return to our homes.”