black is black – The war in Ukraine continues to shake the crypto industry. Cryptocurrency exchanges like Exmo had to stop their activities in Russia, to avoid sanctions from the United States and its allies. This time it’s a mining company who is paying for the Russian invasion of Ukraine.
Cryptocurrency mining and OFAC: a dark future for BitRiver?
The Office of Foreign Assets Control added to its blacklist, the cryptocurrency mining company BitRiver and its ten subsidiaries :
“The Treasury is also taking action against companies in the Russian virtual currency mining sector.”
BitRiver was founded in 2014 by Igor Runets and its headquarters are based in Zug, Switzerland. However, the company states on its website that it employs “over 200 full-time people in three offices across Russia “.
OFAC justifies its decision by stating that cryptocurrency mining companies “help Russia monetize its natural resources”.
Bitcoin mining and Russian oligarchs
This measure can also be explained by the relations between the electricity production company En+, which is one of BitRiver’s partners with the Russian oligarch: Oleg Deripaska. The United States has sanctioned the billionaire in 2018. He subsequently reduced his stake in En+. This action then motivated the United States to lift the sanctions that weighed on the company.
OFAC acknowledges that Russia “has of a comparative advantage in the field of cryptocurrency mining”, citing “its energy resources” and “its cold climate”. These companies established in Russia remain however dependent on foreign countries and would thus be vulnerable to sanctions :
” LMining companies rely on imported hardware and fiat payments”
Will foreign crypto companies in Russia all have to resolve in the coming weeks or months to leave the country, to avoid putting all of their activities at risk? The sanctions against Russia in any case offer the United States and its allies, an opportunity to mate bitcoin (BTC).
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