U.S. Treasury Sanctions Russian Crypto Miners
The action marks the first time that the Treasury has sanctioned a crypto mining company.
- The U.S. Treasury and OFAC have introduced sanctions against BitRiver, a Russia- and Switzerland-based crypto mining company.
- BitRiver is named along with ten of its subsidiaries in a list of approximately 80 sanctioned individuals today.
- This marks the Treasury's first sanction against a crypto mining firm.
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The U.S. Treasury’s Office of Foreign Asset Control (OFAC) has placed sanctions on a Russian crypto mining firm and its subsidiaries for the first time.
Treasury Targets Russia Crypto Mining
In a statement, the Treasury said that the sanctioned crypto mining companies “help Russia monetize its natural resources.”
It added that despite Russia’s strong crypto mining industry, its companies “rely on imported computer equipment and fiat payments” and thus can be sanctioned effectively. It noted that this is the first first time that it has sanctioned a crypto mining firm.
BitRiver and 10 of its subsidiary companies are affected by the sanctions. Though BitRiver is now owned by a Switzerland-based holding company, it was originally founded in Russia and still has three offices operating out of Russia.
The sanctions against BitRiver are part of a list of approximately 80 sanctions against companies and individuals published on Apr. 20. Most of these sanctioned entities are not related to crypto and blockchain, but many are related to banking and finance.
Prior to today’s sanctions, Russia had an advantage in crypto mining due to its plentiful energy and cold climate, which together allow for efficient crypto mining. According to Statista, Russia performed 11.23% of all Bitcoin mining worldwide in August 2021.
Russian Sanctions Continue
These sanctions are the latest in a series of actions against Russia in the wake of its invasion of Ukraine, which began in February.
According to Reuters, the U.S. has introduced sanctions against Russia on at least 12 different occasions since Feb. 24. Other countries including members of the EU and G7 have done so as well.
Furthermore, over 100 companies have also restricted their relationship with Russia according to that same data.
As the war between Russia and Ukraine enters its third month, it remains to be seen which entities will be affected further.
Russia’s attempts to regulate and restrict crypto mining within its own borders could affect companies in the mining industry as well.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.