Russia’s invasion of Ukraine was bound to affect the global digital asset industry and caused some apparent implications, such as a dip in BTC hashrate. However, six months later, some of the outcomes are only now becoming clear, such as SBI Holdings’ previously-undisclosed working relationship with Russian miner BitRiver, which the Japanese giant has now severed.
SBI Holdings, one of Japan’s largest financial giants as wells as its largest online brokerage, revealed in an earnings report a week ago that its BTC mining subsidiary, SBI Crypto, was withdrawing from Russia.
In an interview with Bloomberg following the report, Chief Financial Officer Hideyuki Katsuchi claimed that the broad sanctions necessitated the move that the Biden administration, and many other global powers, had imposed on Russia following President Vladimir Putin’s invasion of Ukraine.
SBI further revealed that it only had operations in Siberia, a vast region in Northern Russia favored by miners for cheap electricity and very low temperatures. The company had suspended these operations as soon as Putin invaded Ukraine, it said, without offering more details.
A source with knowledge on the matter discloses that SBI Crypto was more directly impacted than it chose to reveal. Speaking to a news outlet, the source said that the firm was in direct business with BitRiver, a Russian miner directly sanctioned by the U.S. in April for “helping Russia monetize its natural resources.”
The source revealed that SBI Crypto was hosting its mining machines with BitRiver. Following the sanctions, SBI has been trying to sell off its machines in Russia, as relocating them to any other jurisdiction has proven too costly.
Neither company would confirm nor deny the working relationship between them.
“The SBI Group has already stopped all mining in Siberia. And we are not mining in the rest of Russia. As for any other information, I’m afraid I cannot disclose,” a representative of SBI Holdings stated in an email.
While SBI Crypto has previously divulged it has mining operations in the U.S. and Sweden, it has never owned up to mining in Siberia before cutting ties with BitRiver a few weeks ago. Its activities in Siberia were so secretive that multiple employees of mining firms located in the region said they had no idea the Japanese firm had a presence there.
SBI is the second company to publicly cut ties with BitRiver. Compass Mining, a Texas-based BTC miner, was the first to sever relationship with BitRiver, costing the former $40 million worth of equipment. Since then, the two companies have been trading blame on who has held up the resolution of the issue. This has led investors in Compass Mining to initiate legal proceedings as they seek to recover their equipment.
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