- The U.S Treasury is applying sanctions against bitcoin mining in Russia.
- The sanctions seek to impede the capacity for individuals to receive fiat payments, as well as computer hardware by applying pressure on the supply chain and payment processors.
- According to the University of Cambridge, Russia is the third-largest country in the world for bitcoin mining."
The United States Treasury Department released a press release today announcing new sanctions aimed at bitcoin mining in Russia for their ongoing war in Ukraine, as they are the third-largest bitcoin miner in the world according to the University of Cambridge.
The Treasury department stated that reliance on fiat payments and the importation of computer equipment makes Russia vulnerable to sanctions if the U.S focuses on hindering the companies providing those services.
Since government entities cannot stop the actual process of mining bitcoin, the U.S Treasury decided to utilize other attack vectors that weaken the supply chain.
“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 Putin’s brutal war of choice,” said Brian Nelson, Under Secretary for Terrorism and Financial Intelligence. “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.”
One particular bitcoin mining company, Bitriver, was addressed in the press release thoroughly. Founded in 2017, Bitriver has three offices scattered across Russia. Legal ownership was changed to a Switzerland-based holding company in 2021. This company has been designated as operating in the “Russian Federation economy,” thereby making it and its ten Russian-based subsidiaries sanctionable.
In January, Vladimir Putin stated that Russia has distinct advantages when it comes to bitcoin mining as it relates to the energy surplus and climate conditions provided to them. The U.S Treasury agrees with the Russian president, stating “Russia has a comparative advantage in crypto mining due to energy resources and a cold climate.”