BitRiver – Russia’s largest data center services provider – is pondering over filing a lawsuit against the US Treasury Department for adding the company to the sanction list last month. The firm also accused the US of violating WTO rules by promoting unfair competition, lobbying for the US mine industry.
BitRiver Called US Accusations “Unfounded and Untrue”
BitRiver stated in a press release that BitRiver is a 100% privately owned company and has no affiliation with the Russian government. This means BitRiver denies any involvement in helping to bypass sanctions. It also stated that the wrongfully imposed sanction has caused “direct reputational damage” to its operations.
The Treasury Department placed sanctions on BitRiver in place of business relations with Americans. The authority said Russia has significant “comparative advantages” in cryptocurrency mining, expressing concern that individuals or companies may use crypto to evade sanctions.
BitRiver rebutted this claim in the release. It stated that it has always adhered corporate governance and complied with laws in all its operating jurisdictions. In particular, the firm took pride in its strict AML/KYC compliance, touting that its history of operating in Russia and other jurisdictions had not caused any raised eyebrows from watchdogs.
BitRiver attributed the Treasury Department’s sanction to the intention of “protecting local companies.” The Russian mining giant called the action by US authorities “irresponsible,” claiming that neither the legal framework nor proper reasoning could back up such an act.
BitRiver stated that it would continue to operate normaly and communicate with its overseas clients, in spite of the sanction.
“At present, all enterprises, production sites and offices of BitRiver in Russia are operating as usual. The company continues to provide services to international clients who have confirmed their further cooperation and these are the majority.”
IMF Warning: Cryptocurrency is a Way to Avoid Sanctions
Just a day after BitRiver was subject to US sanctions, the IMF warned Russia about the possibility of using cryptocurrencies and boosting their mining industry to avoid economic consequences. The global authority also noted, “mining for energy-intensive blockchains like Bitcoin can allow countries to monetize energy resources, some of which cannot be exported due to sanctions.”
But the crypto industry was more inclined to believe that the use digital assets such as Bitcoin to evade the sanctions was a myth. Binance CEO CZ said in an interview last month that “nobody smart” would choose crypto to do that because it is “too traceable,” and governments are getting better at tracking such transactions.