US Treasury Takes Aim at Russia's Crypto Mining Industry With New Sanctions

The move comes after the IMF earlier this week warned about Russia taking to crypto mining to evade sanctions.

By Shomik Sen Bhattacharjee | Updated: 21 April 2022 17:45 IST

US Treasury Takes Aim at Russia's Crypto Mining Industry With New Sanctions

Photo Credit: Unsplash

US Treasury is applying sanctions against Bitcoin mining in Russia

Highlights

BitRiver has three offices scattered across Russia
Russia is among the top three Bitcoin mining countries globally
The sanction does not mention any specific crypto wallet addresses

The United States Treasury now has its crosshairs on Russian crypto miners for the first time as Russia's invasion of Ukraine enters its third month. The US Treasury Department's Office of Foreign Asset Control (OFAC) released a press release on April 20 announcing new sanctions against Russia-based cryptocurrency miner BitRiver as well as 10 subsidiaries to its Specially Designated Nationals list. The move is indicative of a broader push against Russia's crypto mining industry although the treasury does not mention any particular association between BitRiver and Vladimir Putin's regime.

The Treasury department stated that reliance on fiat payments and the importation of computer equipment makes Russia vulnerable to sanctions if the US focuses on hindering the companies providing those services.

Since government entities cannot stop the actual process of mining Bitcoin, the US Treasury decided to utilise other attack vectors that weaken the supply chain.

Coinbase’s NFT Marketplace Enters Beta Phase

“Treasury is also taking action against companies in Russia's virtual currency mining industry,” said a government statement. "By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources," the statement adds.

"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."

The BTC mining company mentioned in the press release, BitRiver, was founded in 2017 and has three offices scattered across Russia. Legal ownership was changed to a Switzerland-based holding company in 2021, however, this company has been designated as operating in the “Russian Federation economy,” thereby making it and its ten Russian-based subsidiaries sanctionable.

Binance Sorry Over Swastika-Featuring Emoji Launch on Hitler’s Birthday

The move also arrives a day after the International Monetary Fund (IMF) issued a report warning that Russia could try to use crypto to dodge sanctions.

Should you buy a 4G or 5G budget phone? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Affiliate links may be automatically generated - see our ethics statement for details.

Cryptocurrency Prices across Indian exchanges

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.