• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Bitneni

  • News
  • Bitcoin
  • Ethereum
  • XRP (Ripple)

Russia’s Large Crypto Industry at Risk of Destruction Due to Heavy Sanctions

Ronald Henderson/April 23, 2022News

FacebookTwitterReddit

Russia’s successful and large crypto industry trembles and faces the threat of breaking down if the heavy sanctions persist. The third-largest center for global crypto activities may become crippled owing to the several blows the Russian economy has received. The measures taken against Russia are justified to stop the country from utilizing digital assets for its international activities, including warfare.

Effects of the Mining Sanctions on Russia’s Crypto Industry

Over the past few years, Russia holds a record as being one of the friendliest environments to carry out mining activities. As of 2011, 11% of the world’s bitcoin mining processing power was dependent on Russia. These statistics place Russia as the third-largest center for the world’s crypto activities. Verified records show that the country is the owner of digital assets worth about $124 billion.

Since the economic sanction, there was a surge in rubble-crypto trading. Findings from CryptoCompare show that in March alone, a 114 billion rubles increase was recorded. However, with the mining sanctions, the economy of the country has begun to witness the first significant cracks. Huge companies like Binance have begun to gradually withdraw and restructure Russian investments in their market. Binance was responsible for about 77 percent of the total profit that Russia made from the crypto industry in March.

According to the world’s largest crypto exchange company, they must set a good example for other crypto companies and ensure that Russia obeys the sanction. Since April, there has been a decline in the Russian crypto market with only a little over 19 billion rubles recorded in profit.

In addition to Binance’s restriction on its Russian users, accounts worth more than 10,000 digital euros can make only limited transactions. This means that there would be no deposits or trading from all accounts under this category and only withdrawal of funds will be approved.

How Russians have Evaded Economic Sanctions

The ongoing attack on Ukraine by the Russian government has turned the west against them, resulting in economic sanctions to isolate the country. A direct implication is that the country’s currency crashed. As an alternative, Russians have sought ways to amass wealth beyond their devalued money. They found the solution to economic sanctions in crypto.

As a new approach to freeze Russia’s digital assets, the US hence imposed sanctions on all bitcoin mining companies in the country. This is a result of the fact that economic sanctions did not cover cryptocurrency. Being a decentralized currency, the country could vigorously pull all of its resources toward bitcoin mining companies. This also means that they can generate funds irrespective of the blockade on oil importation.

One company largely affected by this sanction was BitRiver; one of the largest cryptocurrency companies in the country. The company is chief for generating funds, hence being the major target of the US treasury.

The strategy of using natural resources to mine bitcoin and evade economic sanctions is not new. Countries like Iran and North Korea have a history of successfully carrying out similar operations. The only way to stop Russia from taking advantage of crypto to minimize the blow of economic sanctions is by cutting off their access to the exchange market and tools needed for mining. The rationale behind the mining sanction on Russia by the US is a representation of how top organizations and personalities feel about Russia’s access to the mining industry.

Tags:cryptocurency/ Russia

FacebookTwitterReddit
Henderson

Ronald Henderson

Ronald has worked in the computer industry for 5 years when he decided to stand on his own and start his own firm, and he's never looked back. A real hard-worker and go-getter, he is a powerful leader and has made quite a name for himself in the industry. Born and raised in Pennsylvania, he still resides there with his wife and two kids, Mark and Gene. He believes that simplicity is the key to everything in life, including writing, and loves to make his content engaging and easy to understand for all audiences - even those who aren’t necessarily from a technical background.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Ethereum Price

Ethereum’s Active Supply Reaches Six-month High But the Ethereum Price Continues to Struggle

Ethereum hashrate

Ethereum Price Holds the Line Above $1,300 But the Bearish Pressure Persists

ETH

Ethereum (ETH) Price Pattern Shows Highest Uptrend Momentum Since 2021 Ahead of Merger

Footer

Every Bit of Internet!

  • About Us
  • Contact Us
  • Privacy Policy
  • Disclaimer
  • Terms and Conditions

Copyright © 2023

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie SettingsAccept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT