The U.S.-based company Compass Mining plans to sell $30 million worth of bitcoin mining equipment that’s currently located in Siberia. The decision to sell the mining rigs follows the U.S. government sanctioning the bitcoin mining operation Bitriver and ten subsidiaries. Compass is hoping to offload 12 megawatts of capacity, according to a company executive.
Compass hopes to sell 12MW of Bitcoin mining capacity in Russia to pay customers
According to Compass Mining CEO Whit Gibbs, the company sells $30 million worth of mining equipment currently located in Siberia. Speaking to Bloomberg on Friday, Gibbs explained that the company hopes to be able to raise funds from the sale to pay around 2,000 customers.
Compass offers hosting services and the mining equipment in Siberia was owned by customers renting hosting space. During the last year before the Ukraine-Russia conflict, Russia became a preferred “hotspot” for bitcoin miners as electricity in the country is much cheaper than most regions worldwide.
For example, electricity rates in the Russian Federation, Siberia and Norilsk, electricity costs can be as low as $0.03 per kilowatt hour (kWh). However, after the start of the war between Ukraine and Russia, Russian crypto mining began to be valued as a way for the country to avoid sanctions and one of the largest mining pools in the world. ‘Ethereum has stopped serving Russian nationals.
American Miners Feel Financial Constraints Caused by Sanctions
Last week, the U.S. Treasury department’s Office of Foreign Assets Control (OFAC), sanctioned the bitcoin mining firm located in Russia, Bitriver and ten subsidiaries connected to the operation. Bitriver and subsidiaries were placed on the Specially Designated Nationals (SDN) list, which means no U.S. person or company may transact with the designated entities.
Compass Mining’s decision to sell $30 million worth of mining equipment follows Bitriver’s addition to OFAC’s SDN list. Gibbs detailed that American miners are affected by financial constraints caused by the sanctions. “I understand the penalties; in this case, the penalty is disproportionate for American minors,” Gibbs told Bloomberg on Friday.
