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The US Treasury Department has taken action against Russian crypto miners for the first time, presumably to aid Moscow's efforts to bypass international sanctions imposed as a result of the conflict in Ukraine. In a fresh wave of sanctions on Russian firms and people, the Treasury Department's Office of Foreign Assets Control (OFAC) named Bitriver and a number of related companies on Wednesday.
The Treasury stated that it is focusing on companies involved in Russia's crypto mining business. "These enterprises help Russia monetize its natural resources by operating enormous server farms that offer virtual currency mining power globally," it stated in a release, echoing worries raised by the International Monetary Fund (IMF).
According to the department, Russia has a competitive edge in crypto mining because to its enormous energy supplies and chilly temperature. "However, mining enterprises rely on imported computer equipment and fiat payments, making them subject to penalties," the organization said in a statement, adding:
The United States is committed to ensuring that no asset, no matter how complex, becomes a mechanism for the Putin regime to offset the impact of sanctions.
Bitriver is a significant mining datacenter operator based in Russia that was created in 2017. It employs 200 people in three Russian locations and has a presence in numerous other countries, including the United States. Bitriver transferred legal ownership of its assets to Bitriver AG, a holding company established in Zug, Switzerland, last year.
OOO Management Company Bitriver, OOO Bitriver Rus, OOO Everest Grup, OOO Siberskie Mineraly, OOO Tuvaasbest, OOO Torgovy Dom Asbest, OOO Bitriver-B, OOO Bitriver-K, OOO Bitriver-North, and OOO Bitriver-Turma have all been blacklisted by OFAC. They will not be allowed to lawfully do business with American persons, residents, or companies.
Bitriver, according to its website, specializes in offering institutional investors with hosting services and turnkey solutions for large-scale crypto mining, data management, blockchain, and AI operations. The firm bills itself as the "world's largest hosting provider for green cryptocurrency mining," owing to the fact that its mining operations are powered by hydroelectric electricity.
Pro-Kremlin Oligarchs Hit by U.S. Sanctions
Bitriver's mining facility in the Siberian city of Bratsk was related to the energy business En+ Group Plc and its affiliate United Co Rusal, according to a Bloomberg story published in late 2019. The two enterprises were formerly controlled by Russian billionaire Oleg Deripaska.
The US sanctioned Deripaska in 2018 for grounds relating to Russia's 2014 annexation of Crimea. The entities were also sanctioned for over a year until the oligarch secured a deal with the US Treasury to relinquish ownership, according to the story.
OFAC has now identified the Russian commercial bank Transkapitalbank, as well as more than 40 persons and businesses overseen by Konstantin Malofeyev, another Russian tycoon. According to the FBI, these players' "main purpose is to assist Russian firms in evading sanctions."
Malofeyev is on the US and EU sanctions lists, and Kyiv is looking for him for his role in the Donbas conflict. The industrialist, who controls the Tsargrad media organization and is a supporter of President Vladimir Putin, is accused of funding pro-Russian rebels in Eastern Ukraine.
