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US sanctions Russian crypto mining company BitRiver
The goal is the weakening of the Russian economy
Numerous Russian oligarchs and key companies are also the target of sanctions
Sanctions against the Russian crypto sector
The United States government has imposed sanctions on Russian crypto mining company BitRiver, CoinDesk reports. This action is part of a massive US effort to make Russia’s access to the global financial system as difficult as possible in response to the war of aggression against Ukraine. BitRiver and 10 of its subsidiaries have been included in the US Treasury Department’s list of sanctioned companies operating in the technology sector. “The Ministry of Finance is also cracking down on companies in Russia’s virtual currency mining industry. By operating large server farms that sell virtual mining capacity internationally, these companies are helping Russia monetize its natural resources. Russia has a lot because of its energy resources and its cold climate gives it a competitive advantage when it comes to crypto mining. However, they must rely on imported computing equipment and fiat payments, making them vulnerable to sanctions,” the ministry said in a statement.
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BitRiver CEO Igor Runets told CoinDesk in an interview that the company’s parent company is based in Switzerland and “has never provided services to Russian government institutions” or worked with companies that had already been subject to sanctions. While BitRiver is the first crypto mining company to be the target of sanctions, officials at the US Treasury Department had already begun cracking down on the potential use of cryptocurrencies to circumvent sanctions, according to Forbes. On April 5, the ministry put Moscow-based stock exchange Garantex on the sanctions list for “deliberately neglecting” its obligation to take anti-money laundering measures and “allowing its system to be abused by dubious actors.”
US Treasury wants to weaken the Russian economy at any cost
Not only the Russian crypto sector has become the target of US sanctions. Scores of oligarchs and key companies have been sanctioned after Russia invaded Ukraine in late February in a bid to persuade Vladimir Putin to order his troops to withdraw. Some Russian banks have also been excluded from the international banking network SWIFT. En+, one of BitRiver’s partners, is linked to Russian oligarch Oleg Deripaska, a billionaire also sanctioned by the United States in 2018. Sanctions in place against En+ at the time were lifted after Deripaska reduced its stake in the energy company. “The Treasury Department can and will target those who circumvent, attempt to circumvent, or assist in circumvention of US sanctions against Russia in support of Putin’s brutal, self-imposed war,” said Brian Nelson, Secretary of State for Terrorism and Financial Affairs Intelligence at the US Treasury Department.
According to Forbes, at the same time as BitRiver was sanctioned, the ministry also imposed sanctions on Russia’s trans-capital bank and more than 40 individuals and entities led by Russian oligarch Konstantin Malofeyev, who was arrested by the US Department of Justice in early April 2022 for alleged violations charged against his own sanctions. According to Justice Ministry officials, Malofeyev allegedly circumvented sanctions imposed on him in 2014 by complicity in conspiring to transfer US$10 million in US investment to acquire media organizations in Europe.
Thomas Weschle / Editor finanzen.net
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