US Treasury Sanctions Crypto Mining Firm in Russia

UTC by Ibukun Ogundare · 3 min read
US Treasury Sanctions Crypto Mining Firm in Russia
Photo: Unsplash

In addition to several economic sanctions, many companies across the globe have also cut ties with the country.

The Office of Foreign Asset Control (OFAC) of the US Treasury has sanctioned a crypto mining firm in Russia, BitRiver. On the 20th of April, the Treasury Department designated persons and companies helping Russia evade sanctions imposed by the US and its partners. While the Treasury sanctioned the crypto mining firm in Russia, the action represents the first time the department would punish a crypto mining firm. Notably, the sanctions affect the mining firm and all of its subsidiaries.

The subsidiaries include OOO BitRiver-Turma, OOO BitRiver-K, OOO BitRiver-North, OOO BitRiver-B, OOO Tuvaasbest, OOO Management Company BitRiver, OOO Siberskie Mineraly, OOO BitRiver Rus, OOO Torgovy Dom Asbest, and OOO Everest Group. Although BitRiver was founded in Russia, a Switzerland company now owns the crypto mining firm. However, RitRiver still has three offices that operate in Russia.

Data from Cambridge University reveals that Russia is the third-biggest destination for Bitcoin mining in the world.

US Treasury Places Sanctions on Crypto Mining Firm in Russia

According to the official announcement by the US Department of the Treasury, BitRiver and its subsidiaries helo Russa evade sanctions. Along with its subdivisions, the crypto mining firm was helping ‘Russia monetize its natural resources.”

“Russia has a comparative advantage in crypto mining due to energy resources and a cold climate. However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions. The United States is committed to ensuring that no asset, no matter how complex, becomes a mechanism for the Putin regime to offset the impact of sanctions.”

Since BitRiver’s inception in 2017, its mining farms have been using hydroelectric power supports. The three offices the firm has in Russia have more than 200 staff that work full-time. In February, BitRiver Rus announced its position as the first Russian company with a net-zero carbon footprint. At the time, CEO Igor Runets said:

“We’re committed to facilitating the digital green energy transition of the Russian Federation and we are meeting this challenge successfully. Our largest data center in Bratsk runs on alternative energy, complies with global best practices and does not cause any harm to the environment.”

Three months down the lane, the US and its international partners are still placing sanctions on Russia. Since February when the war started, the United States government has introduced various sanctions on a minimum of 12 occasions on Russia.

In addition to several economic sanctions, many companies across the globe have also cut ties with the country. Entertainment companies, fashion firms, and much more are some that have restricted relationships with Russia. As the tussle continues, it is safe to say that more sanctions may emerge and more entities affected.

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