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.

AccessTimeIconApr 21, 2022 at 1:40 p.m. UTC
Updated May 11, 2023 at 4:59 p.m. UTC

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.


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Eliza Gkritsi

Eliza Gkritsi was CoinDesk's AI/crypto reporter.

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