Compass Mining to sell mining equipment to steer clear of sanctions
The American Texas-based company is set to sell mining equipment worth $30m in Siberia, Russia. As the sanctions imposed by the US and the rest of the world against Russia pile up, cryptocurrency companies seek ways to exit the sanctioned state.
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Earlier, the US Treasury Department imposed sanctions on BitRiver, which is a major operator of mining data centers, and its affiliated crypto mining enterprises in order to diminish Moscow’s war efforts.
By operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources,
– as stated by US officials.
It was stated in a Bloomberg report that Compass Mining is hoping to sell their 12 megawatts mining servers for $30m, in order to recover the equipment’s value. The CEO of the company, Whit Gibbs, intends to pay off approximately 2,000 clients who own the Bitcoin mining equipment.
The Russian servers represent about 15% of the company’s current capacity. After selling the equipment in Siberia, Whit Gibbs anticipates increasing the firm’s capacity from 70 MW to 355 MW by the end of 2022. The remaining 10 MW that was set to be delivered to Russia will be rerouted to North America. The sanctions imply that no U.S. citizen or company may transact with the appointed entities. Gibbs, however, acknowledges the sanctions, despite U.S. miners being affected by new economic limitations.
Compass Mining provides clients with hosting services. The mining equipment in question is located in Siberia and belongs to customers that rented out the hosting space. The Russian servers represent about 15% of the company’s current capacity. Prior to Russia’s invasion of Ukraine, Russia was seen as one of the preferred spots for miners because of its low electricity costs, energy resources and cold weather, compared to other countries. The electricity in the region of Siberia and Norilsk, for instance, used to reach as low as 0.03 cents per kilowatt-hour. In comparison, the average electricity rate in the United States of America is 10.42 cents per kWh, with the lowest rate in the state of Louisiana at an average price of 7.01 cents per kWh.
It is worth noting that since the war started, one of the biggest Ethereum mining pools Flexpool pulled out from Russia and stopped providing services on its territory and to Russian IP addresses, claiming that by cutting off Russian miners, the company has the potential to weaken the country’s economy and minimize the aggressor’s war capacity.
US officials also claim that they recognize the significance of imported computer equipment and fiat payments, however,
The United States is committed to ensuring that no asset, no matter how complex, becomes a mechanism for the Putin regime to offset the impact of sanctions.
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