US Treasury targets Russian mining company, citing sanctions evasion

The US government announced they were targeting entities that could help Russia evade American and international sanctions. BitRiver’s green crypto mining is on the list.

Bratsk hydro power plant supplying energy for BitRiver's operations

The US Department of the Treasury's Office of Foreign Assets Control (OFAC) added BitRiver and its 10 subsidiaries to the Specially Designated Nationals list, but stopped short of sanctioning BitRiver CEO Igor Runets, even as it added individuals linked to other newly sanctioned entities.

BitRiver is headquartered in Switzerland, but the mining operations are located in Siberia and use nothing but “surplus hydroelectric power,” according to the BitRiver website.

The irony is that BitRiver’s commitment to green energy is precisely what got them in trouble. In a statement justifying the new sanctions, the US Treasury explained that crypto mining allows Russia to “monetize its natural resources,” adding that sanctions can prove effective due to mining companies’ reliance on “imported computer equipment and fiat payments.”

Green mining meets geopolitics

Back in the day, Runets fashioned himself as the leader of environmentally-friendly innovation in the mining sector. In a 2020 Op-Ed for Cointelegraph, he wrote that “the future of Bitcoin mining is green” and that the way to achieve carbon neutrality was to harness the natural resources found in regions like Syberia.

He added that China would eventually prove to be an “ally” thanks to its proximity to Russia and Beijing’s close economic ties with Moscow.

In February 2022, days before the Ukraine invasion, BitRiver announced they had reached carbon neutrality. At the time, Runets called it a “watershed event for the industry,” and a representative of BSI France, the body that confirmed BitRiver’s zero-emissions status, added that they “had not yet carried out such work in Russia.”

Apart from mining, BitRiver claims to provide “data management, blockchain and AI operations” for institutional investors. Their website also mentions “full-time presence” in China, Japan, UAE, South Korea, Switzerland, Germany, and the United States.

As environmental issues get mixed up with politics, the future of green mining in Russia is all but shaky. Neither Runets, whose current whereabouts are unknown, nor any of the targeted entities offered any immediate comment.