Russian Bitcoin Mining Firm BitRiver Becomes The First Crypto Firm To Be Sanctioned By US Treasury

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Bitcoin mining has become the latest industry to be involved in the Ukraine-Russia conflict following the U.S. Treasury move to sanction BitRiver.

Sanctions against BitRiver are not exclusive to its business, as the European Union and the United States have imposed a series of harsh sanctions on Russia since the nation invaded Ukraine in February. The sanctions, which are aimed primarily at President Vladamir Putin and Russian oligarchs, are aimed at paralyzing the country’s economy and penalizing the president and his senior officials.

The Treasury movement on Bitriver could end up creating potential for cryptocurrency mining and hosting companies such as Mawson Infrastructure Group Inc. MIGI. Bitcoin miners who had their machines hosted on Bitriver data centers can travel to neighboring countries and abroad to regions where companies like Mawson operate.

Mawson recently partnered with Celsius Mining LLC and Foundry Digital LLC to have 112 MW of hosting contracts, for a total of 116 MW for hosting customers. Hosting deals place Mawson among the largest hosting placement companies listed on the Nasdaq Stock Exchange Riot Blockchain Inc. REASONS e Core Scientific Inc. CORZ.

Sanctions imposed by the West

The United Kingdom, the United States and the European Union (EU) have imposed a ban on the export of dual-use items: items with both civilian and military applications, as well as vehicle parts. The same applies to goods and technology that help Russia’s defense and security system.

Putin’s adult children, Russian Deputy Prime Minister Shoigu, Defense Minister Grigorenko, Russian billionaire Roman Abramovich and about 350 members of the Russian parliament in support of Russia’s recognition of Lugansk / Donetsk as sovereign states have also been imposed.

The Russian banks Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, Vnesheconombank (VEB), VTB Bank have been excluded from the network of the World Interbank Financial Telecommunication Society (SWIFT):

Latest US government sanctions

While the Russian government is trying to find ways to get out of sanctions, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has launched sanctions against BitRiver, one of the largest. Bitcoin mining companies in Europe and Asia. Sanctions prevent Bitriver and its subsidiaries from accessing cryptographic mining and trading equipment from the United States

This is the first time the Treasury Department has imposed sanctions on a virtual currency mining company. According to a statement from the Treasury Department, by operating in Russia’s large server farms that sell virtual currency extraction capacity internationally, these companies are helping Russia monetize its natural resources.

The statement said that the Treasury sanctioned Bitriver AG, based in Switzerland, because it still operates from three offices based in Russia, despite the fact that in 2021 it transferred the legal ownership of its assets to a Swiss holding company. In addition, the Treasury has designated 10 subsidiaries of Bitriver AG based in Russia. .

Potential for installed Bitcoin miners?

Bitriver claims to be the world’s largest hosting provider for green cryptocurrency mining after opening a 100 megawatt (MW) data center in Bratsk, Siberia, targeting foreign Bitcoin miners in the United States, Europe and Japan. they want to take advantage of the cheap electricity of the region.

Sanctions make it illegal for U.S. citizens and U.S. stock exchanges to buy new cryptocurrencies mined by Bitriver, according to William Callahan, Blockchain Intelligence Group’s director of government and strategic affairs. Callahan advises financial institutions and cryptocurrency exchanges not to transact with the Russian cryptocurrency ecosystem to avoid violating OFAC sanctions. This move could paralyze Russia’s Bitcoin mining industry.

Russia is the third largest owner of the Bitcoin hashrate, and the latest sanctions could interfere with the country’s cryptocurrency mining industry. Nick Hughes-Jones, Mawson’s commercial director, believes Mawson could further expand its market share if Russia’s hashrate goes down. “Russia is 12% of the global hashrate. If they stayed offline, that’s huge for us,” Jones said.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investment advice.

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