Media report on the weak impact of sanctions on Russian miners

Most of the pools are located in Chinese jurisdiction, and the mined coins are sold on platforms that have not imposed restrictions

17.10.2022 - 07:30

1898

2 min

What’s new? The eighth package of EU sanctions, adopted in early October, completely banned crypto platforms from providing services to customers from the Russian Federation, regardless of the amount of assets. In particular, Russians cannot open accounts and crypto wallets in companies licensed in EU countries. However, as Kommersant journalists found out, the new restrictions have little effect on Russian miners.

News on the Kommersant website

How have the sanctions affected miners? According to the experts interviewed, only 10% of Russian traders use Western infrastructure to sell mined coins. At the moment, miners have many opportunities to continue working legally, but if sanctions are expanded, it is necessary to accelerate the introduction of regulation on the territory of Russia.

According to Artem Yeremin, a spokesperson for CHILKOOT, a mining company, up to 95% of the pools where Russian miners work are located in Chinese jurisdiction. This makes them inaccessible to sanctions, besides, after mining, miners have the opportunity to sell coins on exchanges that do not comply with EU sanctions, as well as by conducting over-the-counter (OTC) transactions.

In July, the United States urged Japan to increase pressure on local crypto exchanges and mining companies to stop financial transactions with Russia. At the end of August, Japan’s largest online broker SBI Holdings Inc. ceased its mining activities in Russia and severed ties with BitRiver, a data center operator hit by US sanctions.

In August, the capacity of Russian bitcoin mining farms operating on associated petroleum gas reached 85 MW. The total power capacity of mining farms in oil fields amounted to 23% of the entire cryptocurrency mining market in the country.

At the end of September, the Bank of Russia and the Ministry of Finance agreed on the position on the regulation of cryptocurrency mining. Deputy Anatoly Aksakov noted that the draft law would be submitted for consideration in the near future.

Author: