For the first time ever, the U.S. Department of the Treasury is taking aim at bitcoin miners operating in Russia as the country’s war on Ukraine approaches its third month.
In its latest round of sanctions, the U.S. Treasury Department says that it is taking action against companies in Russia’s virtual currency mining industry.
According to data from Cambridge University, Russia is the world’s third biggest destination for bitcoin mining.
“By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources,” Under Secretary for Terrorism and Financial Intelligence Brian Nelson said in a press release released early Wednesday afternoon.
“Russia has a comparative advantage in crypto mining due to energy resources and a cold climate. However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions,” continued the statement.
The United States views income from the crypto mining industry as a potential threat to the efficacy of its sanctions regime, with the Treasury saying that it is committed to ensuring that no asset becomes a mechanism for the Putin regime to offset the impact of sanctions.
Among the companies targeted by U.S. sanctions is Bitriver, which was founded in 2017, and as the name implies, operates its mining farms with hydroelectric power.
The Office of Foreign Assets Control has singled out 10 Russia-based subsidiaries of Bitriver in its most recent raft of sanctions on businesses and individuals helping Russia soften the blow of economic penalties.
CNBC reached out to CEO Igor Runets for comment and did not immediately hear back.
