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 US 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.
Sanctions on Russia have been mounting as the US 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 to CoinDesk.
Carlisle called the sanctions an “unprecedented action by OFAC” and 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.”
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.
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.