International economic sanctions have propelled many countries toward cryptocurrencies — from Venezuela to Iran. Now, U.S. sanctions imposed on one Russian company have paved the way for a cryptocurrency mining operation to take over a decidedly industrial facility.
Rusal Turns to Cryptocurrency Mining in Face of Sanctions
One such establishment is Rusal, an aluminum giant owned by Oleg Deripaska, an aide to Russian President Vladimir Putin. In April 2018, Deripaska was named by the U.S. Office of Foreign Assets Control (OFAC) as a “Designated Russian oligarch,” thanks to his close ties to the Kremlin. Rusal was immediately hit with significant economic sanctions following this designation.
According to an October 29, 2019, report from local news medium RBC, Rusal has been unable to manufacture anything since the sanctions were slapped on it. Looking to maintain cash flow under these circumstances, the company has agreed to lease a section of its Nadvoitsy Aluminum Plant, located in the northern Karelia region, to the Russian Mining Company (RMC).
RMC reportedly plans to install cryptocurrency miners in the plant and utilize its cheap power sources.
RMC is run by Russian tech entrepreneur Dmitry Marinichev. After raising $43 million in a 2017 ICO, RMC established a cryptocurrency mining farm in a plant that formerly belonged to automobile company Moskvich, according to RBC. The company also established two mining pools; BitcoinRussia, which is dedicated to bitcoin mining, and a separate pool for mining ether.
RBC quotes data from BitcoinRussia, showing the pool had processed 1,815 bitcoin in payment to its participants. But between April and May 2019, the Moskvich plant was shut down as it became unprofitable.
Other Cryptocurrency Initiatives for RMC
Now that RMC has a new location for cryptocurrency mining, Marinichev wants to relaunch the decentralized mining pool as well.
The RMC has also reached a funding agreement with British cryptocurrency exchange and wallet provider Cryptonex. The exchange will provide RMC with 42 million CNX (the native token of Cryptonex, which is valued at $2.07 at press time). The funding would be used by RMC to procure and deploy miners to be used in its mining farms.
Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.