In an attempt to deny Russia opportunities to evade sanctions through cryptocurrencies, the U.S. Department of the Treasury has sanctioned leading Russian mining firm Bitriver. The move comes amid concerns that Moscow may use the minting of digital coins to monetize its energy 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.
Bitriver is a major operator of mining datacenters which was founded in Russia in 2017. It has three Russian offices, with 200 full-time employees, and maintains a presence in several other countries, including the U.S. Last year, Bitriver transferred legal ownership of its assets to the Zug, Switzerland-based holding company Bitriver AG.
OFAC has also blacklisted 10 Russia-based subsidiaries of Bitriver AG: OOO Management Company Bitriver, OOO Bitriver Rus, OOO Everest Grup, OOO Siberskie Mineraly, OOO Tuvaasbest, OOO Torgovy Dom Asbest, OOO Bitriver-B, OOO Bitriver-K, OOO Bitriver-North, and OOO Bitriver-Turma. American citizens, residents, and entities will not be able to legally do business with them.
According to its website, Bitriver specializes in providing hosting services and turnkey solutions for large-scale crypto mining, data management, and blockchain and AI operations to institutional investors. The company brands itself as the “world’s largest hosting provider for green cryptocurrency mining” as it utilizes hydroelectric power to run its mining facilities.
A report by Bloomberg, in late 2019, linked Bitriver’s mining center in the Siberian city of Bratsk to the energy firm En+ Group Plc and its unit United Co Rusal. Russian billionaire Oleg Deripaska used to control the two companies.
Deripaska was sanctioned by the U.S. in 2018 for reasons related to Russia’s annexation of Crimea in 2014. The entities were also under sanctions for almost a year before the oligarch reached an agreement with the U.S. Treasury to cut his control, the article unveiled.
OFAC has now also designated the Russian commercial bank Transkapitalbank and more than 40 individuals and entities led by another Russian oligarch, Konstantin Malofeyev. The agency claims these actors’ “primary mission is to facilitate sanctions evasion for Russian entities.”
Malofeyev is on U.S. and EU sanctions lists and wanted by Kyiv for his involvement in the war in the Donbas region. The businessman, who owns the Tsargrad media group and supports President Vladimir Putin, has been accused of financing the pro-Russian separatists in Eastern Ukraine.
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