For the first time, the US Treasury’s Office of Foreign Asset Control (OFAC) sanctioned a Russian crypto mining corporation and its subsidiaries.
Russia’s Crypto Mining Is Being Targeted by the Treasury
The Treasury claimed in a statement that the sanctioned crypto mining companies “help Russia commercialize its natural resources.”
It went on to say that, despite Russia’s large crypto mining industry, its enterprises “rely on imported computer equipment and currency payments” and can thus be successfully sanctioned. It stated that this is the first time it has sanctioned a cryptocurrency mining firm.
The sanctions affect BitRiver and ten of its affiliate firms. Despite the fact that BitRiver is now owned by a Swiss holding company, it was formed in Russia and maintains three operations there.
The penalties imposed on BitRiver are part of a list of around 80 restrictions imposed on organizations and persons that was published on April 20. The majority of these sanctioned entities have nothing to do with cryptocurrency or blockchain, but several have something to do with banking and finance.
Prior to today’s sanctions, Russia had an advantage in crypto mining due to its abundant electricity and chilly environment, both of which enable efficient crypto mining. According to Statista, Russia accounted for 11.23 percent of all Bitcoin mining in the globe in August 2021.
Russian Sanctions Remain in Effect
These penalties are the latest in a series of moves taken against Russia in the aftermath of its February invasion of Ukraine.
Since February 24, the United States has imposed sanctions on Russia at least 12 times. Other countries, including EU and G7 members, have followed suit.
According to the same data, over 100 corporations have also limited their engagement with Russia.
As the conflict between Russia and Ukraine enters its third month, it is unclear which entities will be impacted more.
Russia’s efforts to control and ban crypto mining within its borders may have an impact on mining firms as well.