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Compass is hoping to sell 12 megawatts of bitcoin mining capacity in Russia in order to pay its customers
Compass Mining is selling $30 million in mining equipment that is currently stationed in Siberia, according to CEO Whit Gibbs. In an interview with Bloomberg on Friday, Gibbs stated that the firm hopes to use the proceeds from the sale to pay off about 2,000 customers.
Customers renting hosting space owned the mining equipment in Siberia, which was provided by Compass. Russia became a favorite "hotspot" for bitcoin miners over the previous year, before to the Ukraine-Russia crisis, because power in the nation is significantly cheaper than in most other parts of the world.
In the Russian Federation, Siberia, and Norilsk, for example, power costs may be as cheap as $0.03 per kilowatt-hour (kWh). However, as the conflict between Ukraine and Russia erupted, Russian crypto mining was viewed as a mechanism for the government to dodge sanctions, and one of the major ethereum mining pools stopped serving Russians.
Sanctions have put financial strains on American miners
The Office of Foreign Assets Control (OFAC) of the US Treasury Department sanctioned Bitriver, a bitcoin mining company based in Russia, and eleven companies linked to the activity last week. Bitriver and its subsidiaries have been added to the Specially Designated Nationals (SDN) list, which implies that no U.S. person or entity can do business with them.
Following Bitriver's inclusion on OFAC's SDN list, Compass Mining decided to sell $30 million in mining equipment. Financial restraints imposed by sanctions are affecting U.S. miners, according to Gibbs. "I understand the sanctions," Gibbs told Bloomberg on Friday. "However, in this situation, the punishment is disproportionately harsh for American miners."
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