Compass Mining is selling around $30 million in Bitcoin mining equipment located in Siberia in a bid to avoid sanctions imposed by the US.
With the West leading the fight with sanctions, a US-based company – Compass Mining – is planning to sell around $30 million in Bitcoin mining equipment located in Siberia.
The move to liquidate the Bitcoin mining rigs comes after the United States government imposed fresh sanctions on the mining operation BitRiver and ten subsidiaries.
According to the latest Bloomberg report, Compass Mining is looking for buyers in Russia for mining servers with 12 megawatts of capacity.
Its Chief Executive Officer Whit Gibbs believes the firm will be able to pay off proceeds to nearly 2,000 clients that own the gear after recovering the value of the equipment.
The Russian servers that Compass is willing to get rid off represent about 15% of its current capacity. Gibbs expects that the company’s operating capacity could potentially expand to 355 MW by the end of the year, from about 70 MW, after clearing out equipment in Siberia.
It also has another round of 10 MW servers that it expects to be shipped to Russia in the coming months. However, the exec maintained that these will be “rerouted to facilities in North America, notably Texas.”
The Texas-based company noted significant activity after the Chinese Bitcoin mining exodus, with many miners flocking to Russia especially due to the country’s electricity rates. For context, the cost of electricity in the Russian Federation, Siberia, and the Norilsk region can be as low as $0.03 per kWh. Things changed after the invasion of Ukraine, and the crypto mining ecosystem is under heavy scrutiny from Western regulators.
The freshly imposed sanctions are some of the biggest blows to the mining industry as miners continue to scramble in search of friendlier hubs and cost-efficient energy. Compass Mining fears a similar fate to that of the mining company – BitRiver.
The firm’s decision comes at a time after the United States Treasury Department sanctioned the Swiss data-center services provider. As reported by CryptoPotato earlier, the OFAC asserted that Russia had a “comparative advantage in crypto mining,” citing the country’s energy resources and a cold climate.
Igor Runets, the founder and chief executive of BitRiver, however, claimed that the company has “never provided services to Russian government institutions and has not worked with customers already targeted by sanctions.”