US targets Russian Bitcoin miners in latest round of sanctions
Russians have been using crypto to lessen the impact of economic sanctionsBy Rob Thubron 11 comments
In brief: The economic restrictions against Russia have led to an increase in the amount of Bitcoin trading in the country. As such, the US Department of the Treasury is now targeting Russia's crypto miners in its latest round of sanctions.
"By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources," Under Secretary for Terrorism and Financial Intelligence Brian Nelson said in a press release earlier this week, via CNBC.
Russia has been slammed with international sanctions since it invaded neighbor Ukraine at the end of February, but cryptocurrencies such as Bitcoin have helped offset the damage caused to the country and its economy.
Now, the US Treasury has added BitRiver and ten of its Russia-based subsidiaries to the sanctions list. The company, which operates Bitcoin mining farms using hydroelectric power, is headquartered in Switzerland and has 200 full-time staff in three offices across Russia. It also has a full-time presence in China, Japan, UAE, South Korea, Switzerland, Germany, and USA.
"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," reads the Treasury's statement.
According to Cambridge University, Russia is the third-largest miner of Bitcoin in the world with an 11.2% share of the global hashrate, sitting behind leader the US and second-place Kazakhstan. Its weekly crypto transactions doubled in the month following the invasion of Ukraine, while the number of Russian Bitcoin wallets has increased from 39.9 million to 40.7 million, writes Tom's Hardware.
BitRiver founder and CEO Igor Runets responded to news of the sanctions with, "These US actions should obviously be viewed as interference in the crypto mining industry, unfair competition and an attempt to change the global balance of power in favor of American companies." He added that BitRiver "has never provided services to Russian government institutions and has not worked with customers already targeted by Washington's sanctions."
In other Russia news, adult-focused content creator site OnlyFans has said it is pausing Russian accounts due to a tightening of sanctions on the payment services used by the company.