Russian crypto mining firm BitRiver takes a swing at US Treasury

Russian Bitcoin (BTC) miner BitRiver is considering launching an appeal against the US treasury after it imposed sanctions on the company for helping Moscow to swerve international restrictions -- a claim it strenuously denies.
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Russian Bitcoin (BTC) mining infrastructure provider BitRiver is considering an appeal against the US Treasury after it imposed sanctions on the company for helping Moscow to swerve international restrictions — a claim it strenuously denies.

BitRiver revealed the potential lawsuit on Wednesday, saying sanctions made against it are based on ‘untrue’ and ‘unfounded’ claims. 

The Swiss-registered firm says that legally speaking, it shouldn’t be subject to the sanctions because it’s a private company, not a federal entity. It also claims that it “in no way helps the Russian Federation to circumvent sanctions.”

On top of this, BitRiver says it’s looking to turn the tables on the Treasury and bring some charges of its own. The company claims that the Treasury is lobbying for the US mining industry and promoting unfair competition, which it says breaks World Trade Organization (WTO) rules.

​​According to BitRiver CEO Igor Runets: “Market participants are well aware that these actions by the US government constitute an attempt to shift the global balance of power towards American companies and squeeze the largest Russian player, BitRiver, off the market.”

Runets also says that these potential efforts may well find support from market participants in the US, EU, China, Russia, and the CIS.

The cold climate and cheap energy in Russia create the perfect backdrop for data centers and mining firms.

BitRiver runs data centers that host third-party crypto miners, rather than its own rigs. In 2021, the company shifted its assets to a Switzerland-based holding company but despite this, it still currently runs three data centers in Russia.

The US Treasury’s Office of Foreign Assets Control (OFAC) wants to sanction BitRiver on the grounds that crypto mining firms are selling their mining capacity internationally, which is helping Russia to monetize its natural resources.

The sanctions include: 

  • Blocking listed persons and entities from accessing assets within the US or owned by someone within the US.
  • Prohibiting transactions by US persons and within the United States that involve any property or interests belonging to the sanctioned entities/persons.
  • Blocking any contribution or provision of funds, goods, or services by, to, or for the benefit of sanctioned persons and entities. 

Read more: Yellen: No ‘significant’ Russian crypto sanction evasion found

BitRiver claims that because of the sanctions, it’s struggling with its public image and says its newfound reputation is damaging the company and international business.

Founded in 2017, BitRiver has previously been linked to Russian oligarch and billionaire Oleg Deripaska.

Deripaska was previously sanctioned in April of 2018 but won an appeal after he reduced his shareholdings in his three companies En+, EuroSibEnergo, and Rusal.

As president of EN+, Deripaska not only owns the building BitRiver rents in Bratsk, but also the hydro power plant it relies on.

Later in 2020, EN+ and BitRiver formed a partnership which saw the creation of Bit+. Now its new center is to be located near another hydro power plant owned by IrkutskEnergo, a subsidiary of En+.

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