US sanctions crypto miner BitRiver over Russian operations

The U.S. Treasury Department imposed sanctions on crypto mining company BitRiver, targeting one of the industry’s largest data-center service providers over its operations in Russia in its first such action.

The Switzerland-based firm offers energy sources, mining facilities and large-scale management solutions to Bitcoin miners across the world, including those in Eastern European and Russia. Such regions have been among one of the most popular destinations besides North America for miners that were forced out of China due to Beijing’s crypto mining ban last May. 

Treasury’s action comes just a day after the International Monetary Fund warned in a report that cryptocurrency mining could offer a pathway for countries, like Russia and Iran, to bypass sanctions by putting natural resources they are unable to export toward energy-intensive mining operations, such as Bitcoin mining.

Treasury echoed those concerns Wednesday in a news release announcing the restrictions on BitRiver, including 10 of its Russia-based subsidiaries, as the war in Ukraine enters a third month. 

“By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources,” the department said. “However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions.”

Last year Bitcoin mining generated an average of about $1.4 billion in revenue per month, of which about 11% might have gone to Russian miners, according to the IMF.

BitRiver has not responded to a request for comment from Bloomberg.