Compass Mining Aims to Sell Equipment in Russia to Avoid Sanctions
Compass Mining, a US-based Bitcoin (BTC) & crypto mining company aims to sell its $30 million worth of mining equipment located in Siberia. Compass mining has to sell the equipment to buyers based in Russia in a bid to avoid possible sanctions by the United States and the European Union.
Whit Gibbs, CEO of Compass Mining, told Bloomberg in an interview that the crypto mining servers have a capacity of 12MW and it was impossible to move the equipment out of the country. Gibbs also added that the proceeds from the sale will be used to pay off the roughly 2,000 customers who own the mining equipment.
“I understand the sanctions; in this case the punishment is outsized for American miners,” Gibbs reportedly said, noting that while recovering funds is crucial, his clients will have to give up on BTC mining.
Compass Mining, which is based in Colorado, has been hit hard by recent U.S. sanctions against Russian oligarch Oleg Deripaska and his companies. The sanctions have made it difficult for Compass Mining to find funding and sell its products in Russia.
To circumvent the sanctions, Compass Mining is looking to sell its equipment in Russia through a third party. The company is also considering setting up a data center in Russia that would be owned by Russian customers.
The move to sell off the equipment follows a recent decision by the US Treasury to sanction Russian crypto mining firm BitRiver. In a statement, the Treasury justified its decision by saying that it is targeting Russia’s virtual currency mining industry to ensure “that no asset, no matter how complex, becomes a mechanism for the [Vladimir] Putin regime to offset the impact of sanctions.”
While Compass Mining is not BitRiver, the move to sell its equipment in Russia highlights the challenges that US companies face when doing business in Russia. Despite the sanctions, there is still a significant demand for US products and services in Russia. However, US companies must be careful to comply with the sanctions and avoid any dealings with Russian entities that are considered close to the state.
BitRiver founder Igor Runets said that the sanctions from the Treasury are interference by the US government in the crypto mining industry in a bid to “change the global balance of power in favor of American companies.”
Runets further added that BitRiver “has never provided services to Russian government institutions and has not worked with customers already targeted by Washington’s sanctions.” BitRiver is the largest hosting provider for Bitcoin mining in Russia. The company has data centers in Siberia that provide services to clients from over 30 countries.
Compass Mining was founded in 2020. The company manages several data centers that host servers owned by their customers. Compass Mining was given a significant boost by China’s Bitcoin miner exodus in 2021. The company’s data centers are located in the United States, Canada, Iceland, and Russia.
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