The United States has sanctioned the first cryptocurrency mining business, which also happens to be based in Russia. This comes only a day after the International Monetary Fund (IMF) warned that mining cryptocurrency might help Russia avoid economic sanctions.
The Office of Foreign Assets Control (OFAC) of the US Treasury Department sanctioned BitRiver,, a cryptocurrency mining firm located in Moscow, on April 20, forbidding any commercial interactions with US residents.
According to the statement, the sanctions target Russian commercial bank Transkapitalbank and 10 BitRiver subsidiaries and its Swiss-based parent company for allegedly “being owned or controlled by the Russian Federation.”
The United States wants to stop Russia from evading sanctions:
The Treasury Department aims to stop Russia and its allies from using Bitcoin mining to get around economic sanctions. According to the OFAC news release, Russia has major “comparative advantages” in bitcoin mining.
“Due to its energy resources and frigid temperature, Russia has a competitive edge in crypto mining.” On the other hand, mining businesses rely on imported computer equipment and currency payments, leaving them subject to penalties.”
In other words, despite Russia’s attraction, most crypto mining firms rely on imported technological equipment to set up mining farms, and these enterprises might be the next target for the United States.
Under Secretary of State for Terrorism and Financial Intelligence, Brian E. Nelson said the Treasury may go after anybody or corporation that helps escape US sanctions against Russia, as they would be aiding “Putin’s cruel campaign.”
Russia may begin mining cryptocurrency to circumvent US influence:
The Russian government might utilize cryptocurrency mining to dodge some economic restrictions by taking advantage of the country’s chilly weather and enormous energy reserves.
More than 17 million Russians possess cryptocurrencies, according to Bloomberg, with about 16.5 trillion rubles ($214 billion) in assets. This amount represents around 12% of the overall cryptocurrency market valuation, implying that a sizable portion of the Russian population is aware of cryptocurrencies and the various consensus processes.
This is why the United States is taking direct aim at Russian mining businesses. According to the administration, the country’s energy is being harnessed and converted into cryptocurrency, which can then be swapped for rubles or dollars via decentralized networks.
Regulation of cryptocurrencies is “under the limelight,” according to Russian President Vladimir Putin. Thus mining might be considered a way for the government to avoid economic penalties.