US Sanctions Bitriver, Targets Russia’s Crypto Mining Potential – Mining Bitcoin News

To deny Russia the opportunity to avoid sanctions via cryptocurrencies, the U.S. Department of the Treasury has imposed sanctions on leading Russian mining business Bitriver. This sanction comes amid fears that Moscow might use digital coin minting to monetize its energy resources.

United States Blacklists Zug-Based Bitriver, Its Russian Subsidiaries

The U.S. Treasury Department has for the first time taken action against Russian crypto miners that could ostensibly facilitate Moscow’s efforts to circumvent international restrictions imposed over the war in Ukraine. On Wednesday, the department’s Office of Foreign Assets Control (OFAC) designated Bitriver and a number of affiliated companies in a new round of sanctions against Russian entities and individuals.

The Treasury noted it’s specifically targeting enterprises in Russia’s crypto mining industry. “By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources,” it said in an announcement echoing concerns expressed by the International Monetary Fund (IMF) as well.

According to the department, Russia is a relative leader in crypto mining thanks to its rich energy resources and warm climate. “However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions,” it pointed out in a statement, further emphasizing:

The United States has committed itself to making sure that no asset of any complexity becomes an instrument for Putin to counter the effect of sanctions.

Bitriver is an important operator in mining datacenters. It was created in Russia in 2017. Bitriver has three Russian offices and 200 employees. It also maintains presence in many other countries including the U.S.

OOO Management Company Bitriver Rus and OOO Everest Grup are the other Russia-based subsidiaries. American residents, citizens and businesses will no longer be allowed to do business with these entities.

Bitriver, according to their website, specializes in offering turnkey services and hosting solutions to large-scale crypto mining and data management. The company brands itself as the “world’s largest hosting provider for green cryptocurrency mining” as it utilizes hydroelectric power to run its mining facilities.

U.S. Sanctions Target Pro-Kremlin Oligarchs

A report by Bloomberg, in late 2019, linked Bitriver’s mining center in the Siberian city of Bratsk to the energy firm En+ Group Plc and its unit United Co Rusal. The two companies were owned by Oleg Deripaska, a Russian billionaire.

Deripaska was sanctioned by the U.S. in 2018 for reasons related to Russia’s annexation of Crimea in 2014. These entities had been under US sanctions almost one year prior to the agreement reached by the Treasury with Deripaska. This was in response to Russia’s annexation of Crimea in 2014.

OFAC also has designated Transkapitalbank Russian Commercial Bank and 40 other individuals and entities that are headed by Konstantin Malofeyev, another Russian Oligarch. The agency claims these actors’ “primary mission is to facilitate sanctions evasion for Russian entities.”

Malofeyev, who is listed on the U.S.-EU sanctions list and sought by Kyiv because of his participation in the conflict in the Donbass region. He is the owner of the Tsargrad media company and has been charged with financing pro-Russian separatists from Eastern Ukraine.

Are you expecting the United States to place sanctions on more Russian cryptocurrency businesses? Comment below.

Lubomir Tassav

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.