US Department of Treasury Targets Russian Sanction Evaders Including Crypto Mining Operation Bitriver

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has moved once again to take action against Russian entities as part of the growing sanctions against the rogue nation and its unprovoked war against Ukraine. In the first action of its kind, OFAC is targeting a crypto mining operation as a firm evading sanctions. Treasury notes that crypto mining in Russia is the 3rd largest in the world.

The Department of Treasury is taking action against “vast server farms” in Russia that sell virtual currency mining capacity internationally. The agency states that these companies help Russia monetize its natural resources. Treasury says that mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions.

Founded in 2017, crypto mining company Bitriver is said to currently operate out of three offices across Russia. According to Treasury, in 2021 Bitriver shifted legal ownership of its assets to a Switzerland-based holding company. OFAC has designated this holding company, Bitriver AG, for operating or having operated in the technology sector of the Russian Federation economy.

OFAC additionally designated 10 Russia-based subsidiaries of Bitriver AG for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, Bitriver AG: OOO Management Company Bitriver, OOO Bitriver Rus, OOO Everest Grup, OOO Siberskie Mineraly, OOO Tuvaasbest, OOO Torgovy Dom Asbest, OOO Bitriver-B, OOO Bitriver-K, OOO Bitriver-North, and OOO Bitriver-Turma.

Joining the crypto mining actions today is OFAC is targeting Russian commercial bank Transkapitalbank and a global network of more than 40 individuals and entities led by U.S.-designated Russian oligarch Konstantin Malofeyev, including organizations whose primary mission is to facilitate sanctions evasion for Russian entities.

OFAC first designated Malofeyev in 2014 for being responsible for or complicit in, or for having engaged in, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; and for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the so-called Donetsk People’s Republic. Malofeyev has also been sanctioned by Australia, Canada, the European Union, Japan, New Zealand, and the United Kingdom.

“Treasury can and will target those who evade, attempt to evade, or aid the evasion of U.S. sanctions against Russia, as they are helping support Putin’s brutal war of choice,” said Under Secretary for Terrorism and Financial Intelligence Brian E. Nelson. “The United States will work to ensure that the sanctions we have imposed, in close coordination with our international partners, degrade the Kremlin’s ability to project power and fund its invasion.”

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