In efforts to avoid U.S. and U.N. sanctions, Compass Mining is looking to liquidate all its equipment in Russia in a massive sale that could roll northwards of $30 million.
Compass Mining Inc, a leading cryptocurrency mining company is frantically trying to sell its equipment in Russia. The total value of the hardware sits at around $30 million and forms part of the equipment that cannot be moved out of the country.
The frenetic rush for the liquidations is a result of the threats of sanctions from doing business with Russia. Whit Gibbs, CEO of Compass Mining told Bloomberg that he understands the motives of sanctions but feels that the “punishment is outsized for American miners.”
“The real loss is Bitcoin mining,” Gibbs said. While Bitcoin (BTC) hash rates are at an all-time high, there are fears that the sale could put a dent in the stellar numbers. The equipment that Compass is selling makes up nearly 15% of its capacity which is 12 megawatts.
The company had extensive plans to ship 10 megawatts of equipment to Russia but as a result of the recent threats, Compass will focus on its North American facilities.
Gibbs expressed optimism that the company will find buyers for most of the hardware and added that realized proceeds will be distributed to the owners that numbering around 2,000.
BitRiver Mining already been slammed with sanctions
The move by Compass to sell its hardware was largely motivated by the sanctions imposed on BitRiver, a mining service provider. The sanctions were imposed by the U.S. Treasury Department during the last week but elicited negative reactions.
According to BitRiver CEO Igor Runets, the imposition of sanctions was a ploy to “change the global balance of power in favor of American companies’.” Runets vehemently denied the claims that BitRiver provided services to sanctioned Russian entities or individuals.
After China’s crypto mining purge in 2021, a large number of miners flocked to Russia to set up shop. They were attracted by the prospects of cheap energy from hydropower dams and natural gas but the fairytale seems to be approaching a bitter end.
Since Russia invaded Ukraine, Western powers have retaliated by imposing stiff sanctions on the country’s institutions and oligarchs, leading to top brands severing ties with the country.
Leading cryptocurrency exchanges have declared that while a “blanket ban” is off the table, they indicated plans to collaborate with regulatory agencies to ensure that their platforms are not being used to circumvent sanctions.
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