Despite Russia’s invasion into Ukraine, its Bitcoin miners are reportedly operating as usual, according to local news.
As per estimates from the Cambridge Bitcoin Electricity Consumption Index, crypto miners in Russia had accounted for around 11.2 per cent of the global Bitcoin hash rate as recorded on August 2021. As sanctions were being placed on the Russian government from the United States and allied NATO nations, it is still to see how the local Russian Bitcoin sector and the broader market would be affected.
While some crypto mining firms like Ethereum-focused Flexpool have reported to have been halting their services in Russia as a direct response to the Ukrainian invasion, Bitcoin miner Compass Mining has confirmed its customers hosted in Russia that its mining infrastructure would remain operational in the region.
CEO of Compass Mining, Whit Gibbs, has expressed his thoughts and prayers to those affected by the conflict through a Twitter post, reassuring the users’ community that the firm’s mining facilities in Eastern Europe are safely located in Serbia, which is outside any “geopolitical unrest.”
The Biden administration, meanwhile, has outlined on February 24 that it would very soon impose “sweeping financial sanctions and stringent export controls” on Russia’s top financial institutions, its government, the country’s high-ranking officials as well as its technology sector.
Notably, however, these heavy restrictions haven’t yet extended out to the international payments network SWIFT or cryptocurrency transfers. Many crypto enthusiasts and analysts have argued that this could be a time when the Russian crypto sector might start blooming as it could potentially soon become an important tool to sidestep various sanctions.
Bitcoin bull and Morgan Creek digital co-founder Anthony Pompliano has emphasized in a newsletter that the Russian government can utilize this moment as a chance to shift away from the US dollar reserve system and instead back a decentralized currency with a global appeal.
Head of Digital Assets Research at VanEck, Matthew Sigel, has also echoed similar sentiments to Bloomberg, having noted that the Bitcoin network would enable Russia in reducing the potential harm that can be caused by being shut out of the western financial system stating that “neither dictators nor human rights activists” would encounter any censor on the Bitcoin network.