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Sunday, March 19, 2023

US Sanctions Bitriver, Targets Russia’s Crypto Mining Potential

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US Sanctions Bitriver, Targets Russia’s Crypto Mining Potential – The US Treasury Department has taken action against Russian crypto miners for the first time, presumably to aid Moscow’s efforts to circumvent international sanctions imposed as a result of the conflict in Ukraine.

In a new round of sanctions against Russian entities and individuals, the Treasury Department’s Office of Foreign Assets Control (OFAC) named Bitriver and a number of related companies on Wednesday.

The Treasury stated that it is focusing on businesses involved in Russia’s crypto mining industry. “These enterprises help Russia monetize its natural resources by operating enormous server farms that sell virtual currency mining power globally,” it stated in a release, echoing worries raised by the International Monetary Fund (IMF).

Also Read: Russian Chamber of Commerce Suggests Using Cryptocurrencies in Settlements With Africa

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According to the department, Russia has a competitive edge in crypto mining because of its enormous energy supplies and chilly temperature. “However, mining enterprises rely on fiat payments and imported computer equipment, making them subject to penalties,” the organization said in a statement, adding:

“The US is determined to ensure that no asset, no matter how complicated, is used by the Putin administration to mitigate the impact of sanctions.”

Bitriver is a significant mining datacenter operator based in Russia that was created in 2017. It employs 200 people in three Russian offices and has a presence in numerous other countries, such as the United States. Bitriver transferred legal ownership of its assets to Bitriver AG, a holding company established in Zug, Switzerland, last year.

OOO Bitriver Rus, OOO Management Company Bitriver, OOO Tuvaasbest, OOO Bitriver-K, OOO Everest Grup, OOO Siberskie Mineraly, OOO Torgovy Dom Asbest, OOO Bitriver-B, OOO Bitriver-North, and OOO Bitriver-Turma have all been blacklisted by OFAC. They would not be able to legitimately do business with American citizens, residents, or entities.

Bitriver, according to its website, specializes in offering institutional investors with hosting services and turnkey solutions for large-scale data management, crypto mining, AI operations and blockchain. The company bills itself as the “world’s largest hosting provider for green cryptocurrency mining,” owing to the fact that its mining operations are powered by hydroelectric electricity.

Bitriver’s mining center in the Siberian city of Bratsk was related to the energy business En+ Group Plc and its unit United Co Rusal, according to a Bloomberg report published in late 2019. The two enterprises were previously controlled by Russian billionaire Oleg Deripaska.

Also Read: IMF Warns Russia Sanctions Threaten to Undermine US Dollar Dominance

The US sanctioned Deripaska in 2018 for reasons relating to Russia’s 2014 annexation of Crimea. The entities were also sanctioned for nearly a year before the oligarch secured a deal with the US Treasury to relinquish control, according to the article.

OFAC has now identified the Russian commercial bank Transkapitalbank, as well as more than 40 persons and businesses overseen by Konstantin Malofeyev, another Russian tycoon. According to the FBI, these players’ “main purpose is to assist Russian firms in evading sanctions.”

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