BitRiver, its subsidiaries and a Russian bank have been sanctioned by the US Department of Commerce.
The US has recently sanctioned the world’s first cryptocurrency mining operation, which happens to be Russian.
The International Monetary Fund (IMF) has warned that Russia may be able to circumvent sanctions by mining cryptocurrencies.
On April 20, it was announced that BitRiver, a Moscow-based cryptocurrency mining company, has been sanctioned by the US Treasury Department’s Office of Foreign Assets Control (OFAC).
Also subject to sanctions were Transkapitalbank, a Russian commercial bank, and eleven BitRiver companies, all accused of “being owned or controlled by the Russian Federation.”
The US wants Russia to refrain from imposing sanctions
The Treasury Department is trying to stop Russia and its allies from mining Bitcoin to avoid sanctioning the country. The Office of Foreign Assets Control (OFAC) says that Russia has significant “comparative advantages” in bitcoin mining.
Russian energy and cold temperatures give the country a competitive advantage in cryptocurrency mining. Since mining companies rely on imported computer equipment and financial transfers, the sanctions have an impact on their operations.
In other words, despite the lure of Russia, the vast majority of cryptocurrency mining companies rely on imported equipment to set up mining farms, making them potential targets for the US.
Under Secretary for Terrorism and Financial Intelligence, Brian E. Nelson said the Treasury Department can and will go after anyone who helps circumvent US sanctions against Russia by supporting what he called “Putin’s cruel war.” Nelson also said the Treasury Department can and will go after anyone who helps circumvent US sanctions against Russia.
Overcoming US influence could be the next step for Russia
According to a report published yesterday by CryptoPotato, the Russian government could take advantage of cryptocurrency mining to evade some economic restrictions by taking advantage of the country’s cold weather and abundant energy.
The Bloomberg news agency estimates that some 17 million Russians hold cryptocurrencies worth about $16.5 trillion ($214 billion). This figure represents about 12% of the total value of cryptocurrencies, which shows that many Russians are aware of cryptocurrencies and the different consensus processes that support them.
For this reason, the US is persecuting Russian mining companies. According to the country’s authorities, decentralized platforms allow users to exchange cryptocurrencies for rubles or dollars.
According to Russian President Vladimir Putin, the regulation of cryptocurrencies is “in the spotlight”, so mining can be seen as a means of avoiding economic sanctions.
