Let it be said, Russia brings together the optimal conditions for the operation of Bitcoin (BTC) mining farms. Between the cold of Siberia and the particularly attractive cost of electricity, the mining industry has developed rapidly in the country. Beyond local operators, foreign financial companies have relocated to Russia. But some have just suspended their mining activity in Russia.
SBI Holding stops Bitcoin (BTC) mining in Russia
SBI, a major Japanese financial group, decides to stop its mining operations in Russia. It is an Internet-based financial solutions provider. The company offers a range of financial and asset management services. In 2018, she embarked on crypto with, among other things, the creation of her mining companies abroad. SBI also embarks on the design/production of chips and other mining systems a year later.
The SBI Holdings group has notably set up its mining farm in Russia. It is one of the countries where cryptocurrency mining is the most developed. The sector particularly saw a rapid revival in 2021. This, after China announced its intention to ban crypto mining from its territory. However, it seems that mining operators are starting to leave Russia since the war in Ukraine. SBI Holdings is among those who have decided to pack up.
Between problem of profitability and fear of sanctions
To explain this decision, Hideyuki Katsuchi, the group’s financial director, pointed to the war between Russia and Ukraine. He says the company has already suspended operations since April. She is currently involved in equipment sales and asset retirement. In its financial statement report for April to June this year, SBI Holdings recorded a loss of 9.7 billion yen ($70.8 million) in cryptocurrency mining.
The company attributes the drop to the suspension of its operations in Siberia, but also to the consequences of the ongoing bear market. Mining would no longer be profitable. In addition, SBI fears a possible sanction like that imposed by the US Treasury on BitRiver. The Russian crypto-mining host is indeed accused of having helped Moscow to circumvent economic sanctions. Those even imposed by the United States in reaction to acts of war.
Mining farm in Russia: a series of closures?
The United States imposes financial sanctions on Russia in response to this war in Ukraine. They hope to be able to convince Vladimir Putin to withdraw his troops and stop the charges. Regardless, the crypto-mining farms installed on its territory allow it to monetize its energy resources. Why the United States is targeting these facilities. For fear of sanctions, SBI Holdings is not the first to stop its mining activities in Russia.
In April, the American company Compass Mining also announced the sale of its mining equipment with a capacity of 12 megawatts. Two months earlier, Flexpool, the fifth-largest Ethereum mining pool, stopped providing its services in Russia. The company was the first to halt operations on Russian soil.
Do these withdrawals announce the series of a long list or will they remain isolated cases? In any case, reports indicate that today Russia provides around 11% of the hash power of the network Bitcoin (BTC). The country remains a repository of the computing power of cryptocurrency. And so far, the war in Ukraine has not had a particular impact on this industry.
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