BitRiver Calls OFAC Sanctions ‘Unfair’ Anti-Competitive Move to Benefit US Miners

The firm and 10 of its subsidiaries were added to OFAC's list of designated nationals subject to sanctions.

Apr 21, 2022 at 1:40 p.m. UTC
Updated Apr 21, 2022 at 5:24 p.m. UTC

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Bitcoin mining hosting firm BitRiver called sanctions imposed on it Wednesday on it by the U.S. Office for Foreign Assets Control (OFAC) an attempt to favor American companies, according to a statement provided to CoinDesk on Thursday.

  • BitRiver's parent company is based in Switzerland and “has never provided services to Russian government institutions” or worked with entities already targeted by sanctions, Igor Runets, the company's CEO and founder, claimed to CoinDesk.
  • “These U.S. actions should obviously be viewed as interference in the crypto mining industry, unfair competition and an attempt to change the global balance of power in favor of American companies,” Runets added.
  • In its statement Wednesday, OFAC said that companies like BitRiver "help Russia monetize its natural resources" and added BitRiver and 10 subsidiaries to its list of specially designated nationals subject to sanctions.
  • Sanctions on Russia have been mounting as the U.S. and European Union bloc try to oppose its invasion of Ukraine. “As western sanctions tighten on Russia's energy sector, Russia will be increasingly incentivized to monetize its energy resources through mining,” David Carslisle, vice president of policy and regulatory affairs at blockchain analytics firm Elliptic, said in a statement said to CoinDesk.
  • Carlisle called the sanctions an “unprecedented action by OFAC” and a “a pre-emptive strike to prevent Russia from leveraging its energy resources for crypto-enabled sanctions evasion." He noted that Iran has generated as much as $1 billion by mining bitcoin in the past, and "OFAC is clearly intent on preventing Russia from following Iran's playbook."
  • In neighboring and politically aligned Belarus, the government-run Minsk High Tech Park is considering allowing firms to settle payments in crypto, likely to avoid sanctions, a local industry insider told CoinDesk.
  • BitRiver is one of the largest bitcoin (BTC) mining hosts in Europe and operates six data centers, with another three under construction, its statement said.
  • The company plans to double its headcount in Russia to over 700 employees by the end of 2022, Runets said Thursday. BitRiver is known for its bitcoin mining centers in Siberia.
  • In its press release announcing BitRiver's inclusion, OFAC noted that BitRiver was founded in Russia in 2017 and currently operates out of three offices across the country. But in 2021 it shifted legal ownership of its assets to a Switzerland-based holding company.

UPDATE (April 21, 15:25 UTC): Added comments from Elliptic and additional context and background.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

CoinDesk - Unknown

Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

Trending

1
CoinDesk - Unknown
Crypto Whales Ditched Tether for USDC After Stablecoin Panic

The UST failure prompted large investors on the Ethereum blockchain to leave USDT for the perceived safety of its biggest competitor.

The UST failure prompted large investors on the Ethereum blockchain to leave USDT for the perceived safety of its biggest competitor.

CoinDesk - Unknown
2
CoinDesk - Unknown
FTX’s Bankman-Fried Pitches CFTC on Directly Clearing Customers’ Crypto Swaps

The crypto exchange’s founder and CEO made his case at a Washington D.C. roundtable, while mainstream derivatives firms painted his ideas as dangerous.

The crypto exchange’s founder and CEO made his case at a Washington D.C. roundtable, while mainstream derivatives firms painted his ideas as dangerous.

CoinDesk - Unknown
3
CoinDesk - Unknown
Terra lanzaría su snapshot esta semana: cómo serán distribuidos los 'nuevos' LUNA

El suministro de tokens en la nueva blockchain será de poco más de $116 millones, dijeron los desarrolladores.

El suministro de tokens en la nueva blockchain será de poco más de $116 millones, dijeron los desarrolladores.

CoinDesk - Unknown
4
CoinDesk - Unknown
Binance to Advise on Crypto Strategy as Kazakhstan Looks to Boost Industry

The country known as a bitcoin mining hub is trying to attract more crypto firms and broaden the industry.

The country known as a bitcoin mining hub is trying to attract more crypto firms and broaden the industry.

CoinDesk - Unknown