War in Ukraine: 3 Knock-On Effects Felt in the Tech Sector

Russian President Vladimir Putin.

Russian President Vladimir Putin has announced a “military operation” in the neighbouring country of Ukraine. Putin further called for Ukrainian soldiers to lay down their arms and surrender peacefully.

The move has been met with outrage in the West, with appeals from across the globe urging the Kremlin to cease hostilities. The apparent invasion has been long speculated, with Russian troops steadily being amassed along the Ukrainian border for months.

While the crisis in the region only escalates, the tech world began to feel early signs of larger impacts caused by the conflict and the incredibly complex political situation surrounding Russia, Ukraine, the Eastern Bloc, NATO and the West.

Here are three immediate knock-on effects felt by the tech industry following the apparent Russian invasion of Ukraine:

  • Bitcoin Plummets

Bloomberg reported this morning that cryptocurrencies across the board have dropped as Putin began military operations in Ukraine, with Bitcoin plummeting to a one-month low.

Analysts have seen this as more evidence that Bitcoin and other cryptocurrencies are unable to provide a hedge (a safe haven for investors)  – while more traditional hedges such as gold have surged to the highest level since early 2021.

“Risk assets continue to be weighed down by the Russia-Ukraine conflict and tensions. This includes Bitcoin and cryptocurrencies which are currently still very much viewed as a high-risk asset class,” said Vijay Ayyar, VP of corporate development at Luno, a crypto platform.

According to Ayyar, if Bitcoin drops to lower than $29,000, “we could be looking at much lower levels in the low $20,000s and below.”

  • Cyber Attacks

Several websites belonging to Ukraine’s defence, foreign and interior ministries were either entirely unreachable or took a very long time to load on Thursday after Russia launched a massive wave of distributed denial of service (DDoS) attacks against Ukraine.

According to APNews, cybersecurity experts have even seen destructive Russian malware affecting computers as far as neighbouring Latvia and Lithuania. A cyber assault of this scale has long been expected by officials to precede and accompany any Russian military incursion.

ESET Research Labs reported on Wednesday that a previously unseen piece of data-destroying malware was already inside “hundreds of machines in the country.” As of now, it is not clear how many networks have been affected.

Some social media users have also reported that there are places in Ukraine where the internet is down. Whether this is being caused by cyber warfare or not is yet unknown.

  • Social Media in Mayhem

On Wednesday, The Verge reported that several social media users sharing images, videos and other crucial information from the eastern Donbas and Luhansk regions of Ukraine had unexpectedly found themselves suspended from Twitter.

Twitter has since acknowledged the error in suspending some accounts relaying what is known as open-source intelligence (OSINT) from Ukraine surrounding the ongoing conflict in the region. The social media powerhouse has since been restoring access to many of the accounts.

“We took enforcement action on a number of accounts in error,” said Twitter spokesperson and head of site integrity Yoel Roth. “We’re expeditiously reviewing these actions and have already proactively reinstated access to a number of affected accounts,” he added.

Like Facebook and YouTube, the platform is regularly accused of not doing enough to fight misinformation and has over the years dedicated funding and efforts towards doing just that.

Many users on social media from both Russia and Ukraine are calling for the conflict to end, some saying that Putin is nothing more than a tyrant. Overall the messages are mostly wishes for safety and peace.

By Luis Monzon
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