This week, the U.S. Treasury levied sanctions on a cryptocurrency mining company for the first time in its history. The company — a Russian Bitcoin mining firm named BitRiver — was put on the Treasury Department's Office of Foreign Asset Control.
BitRiver was created in 2017 in Russia and has three offices in the country. Last year, in fear of legal risks, the company assigned its assets to a holding company in Switzerland named BitRiver AG. The U.S. also imposed sanctions on ten of its subsidiaries in Russia, which it claims were helping the country evade sanctions.
“[The] Treasury can and will target those who evade, attempt to evade, or aid the evasion of U.S. sanctions against Russia, as they are helping support [Vladimir] Putin’s brutal war of choice,” said Under Secretary for Terrorism and Financial Intelligence Brian E. Nelson. “The United States will work to ensure that the sanctions we have imposed, in close coordination with our international partners, degrade the Kremlin’s ability to project power and fund its invasion.”
Recently, the IMF said Russia might use cryptocurrency mining to circumvent economic sanctions. The country’s crypto mining industry constitutes the third-largest in the world.
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“Russia has a comparative advantage in crypto mining due to energy resources and a cold climate. However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions,” the Treasury said. “By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources.
“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,” the government said.