Compass Mining to Liquidate $30 Million in Equipment to Avoid Sanctions

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U.S. Cryptocurrency Mining Company Scrambles to Sell $30 Million Worth of Equipment in Russia
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To avoid U.S. and U.N. sanctions, Compass Mining is seeking to liquidate all of its equipment in Russia, which could advance a massive $30 million sale north.

Leading cryptocurrency mining company Compass Mining Inc is frantically trying to sell its equipment in Russia. The hardware, which has a total value of about $30 million, is part of the equipment that cannot be shipped out of the country.

The liquidation frenzy is the result of the threat of sanctions for doing business with Russia. Compass Mining CEO Whit Gibbs told Bloomberg that he understands the motivation for the sanctions, but believes that “punishing U.S. miners is disproportionate.”

“The real loss is bitcoin mining,” Gibbs said. While Bitcoin’s (BTC) hash rate is at an all-time high, there are concerns that the sale could dent its stellar numbers. Compass sells nearly 15 percent of its 12-megawatt capacity.

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The company has extensive plans to ship 10 megawatts of equipment to Russia, but due to recent threats, Compass will focus on its North American facilities.

Gibbs expressed optimism that the company will find buyers for most of the hardware, adding that realized proceeds will be distributed among about 2,000 owners.

BitRiver Mining has been sanctioned

Compass’ move to sell its hardware was largely driven by sanctions on mining service provider BitRiver. The U.S. Treasury Department imposed sanctions last week, but they sparked a negative reaction.

According to BitRiver CEO Igor Runets, imposing sanctions is a tactic to “change the global balance of power in favor of U.S. companies.” Runets vehemently denies that BitRiver provides services to sanctioned Russian entities or individuals.

Miners flock to Russia to set up shop in the wake of China’s crypto mining purge in 2021. They were attracted by the prospect of cheap energy from hydroelectric dams and natural gas, but the fairy tale seemed to be coming to an end.

Since Russia’s invasion of Ukraine, Western powers have retaliated by imposing harsh sanctions on the country’s institutions and oligarchs, causing top brands to sever ties with the country.

Leading cryptocurrency exchanges have announced that while a “total ban” is not on the table, they have said they plan to work with regulators to ensure their platforms are not used to circumvent sanctions.

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